ARGENTINA – MEASURES AFFECTING THE EXPORT OF BOVINE HIDES AND THE IMPORT OF FINISHED LEATHER
Document: Request for Consultations by the European Communities
Date: 4 January 1999
Document codes: WT/DS155/1; G/L/287
Complainant: EU
Respondent: Argentina
Third parties: U.S.
Dispute stage: Consultation
Agreements cited: Art. XI:1, X:3(a), III:2  GATT 1994

ARGENTINA – MEASURES AFFECTING THE EXPORT OF BOVINE HIDES
 AND THE IMPORT OF FINISHED LEATHER
Request for Consultations by the European Communities
The following communication, dated 23 December 1998, from the Permanent Delegation of
the European Commission to the Permanent Mission of Argentina and to the Chairman of the Dispute
Settlement Body, is circulated in accordance with Article 4.4 of the DSU.
On behalf of the European Communities, I hereby request consultations with the Republic of
Argentina pursuant to Article 4 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes, and Article XXII of the General Agreement on Tariffs and Trade 1994
(GATT 1994) regarding the following Argentinean practices:
(1) the de facto export prohibition maintained by Argentina on raw and semi-tanned
bovine hides, which is implemented in part though the authorization granted by the
Argentinean authorities to the Argentinean tanning industry to participate in customs
control procedures of hides before export (Resolution of the National Customs
Administration No. 2235/96 of 27 June 1996 or any law or administrative regulation
subsequently replacing it);
(2) the “additional VAT” of nine per cent raised by Argentina on the import of products
into its territory (Articles 1 and following of General Resolution DGI 3431/91, and
Article 1 of General Resolution DGI 3975/95 of 3 April 1995 or any law or
administrative regulation subsequently replacing them); and
(3) the “advance turnover tax” based on the price of the imported goods imposed on
operators when importing goods into Argentina (Presidential Decree 1076/92 of
30 June 1992 and Resolution DGI 3955/95 or any law or administrative regulation
subsequently replacing them).
The European Communities consider that the practices enumerated here-above are not in
conformity with the Republic of Argentina’s ob ligations under GATT 1994. Infringements relate,
notably, to the following provisions :
- Article XI.1 of GATT 1994, which, inter alia , prohibits Members to institute or maintain
prohibition to the export of products destined for the territory of any other Member : factual
evidence indicates that the Argentinean export regime for raw and semi-tanned bovine hides
operates as a de facto export prohibition. The European Communities consider that this
export prohibition constitutes a breach of Article XI.1 of GATT 1994.
- Article X.3(a) of GATT 1994 which, inter alia , imposes the obligation on Members to
administer laws and regulations pertaining to requirements on exports in a uniform and

impartial manner: Personnel appointed by the Argentinean Chamber for the tanning industry,
which has an obvious interest in preventing exports, are authorised to assist the Argentinean
customs authorities in carrying out customs controls of raw and semi-tanned bovine hides
before exports. Apart from being part of the export regime designed to make exports of hides
impossible, it is considered that this practice constitutes in itself an infringement of
Article X.3(a) of GATT 1994.
- Article III.2 of GATT 1994 which provides that products of the territory of any Member
which are imported into the territory of any other member shall not be subject to internal
taxes in excess to those applied to like domestic products:
(a) Argentina applies an “additional VAT” of nine per cent on imported products. In
practice this means that the VAT rate for imported goods is 30 per cent instead of 21
per cent for goods purchased on the domestic market. The VAT rate for imported
goods is thus discriminatory when compared to the rate applied on domestic sales.
Therefore, the additional VAT appears to be in breach of the national treatment
principle enshrined in Article III.2 of GATT 1994;
(b) Operators who import foreign goods into Argentina must pay an “advance turnover
tax” of three per cent of the price of the goods, which implies a discrimination in
favour of Argentinean input material for the manufacture and finished consumer
goods. Therefore, this “advance turnover tax” also appears to constitute an
infringement of Article III.2 of GATT 1994.
The European Communities consider that reference to the above legal bases does not rule out
recourse to any other pertinent provision of the WTO Agreement and of the Agreements annexed to it.
The European Communities look forward to receivin g your reply to this request and to fixing a
mutually acceptable date for consultations.