EUROPEAN UNION AND A MEMBER STATE - CERTAIN MEASURES CONCERNING THE IMPORTATION OF BIODIESELS
Document: Request for the Establishment of a Panel by Argentina
Date: 7 December 2012
Document codes: WT/DS443/5
Complainant: Argentina
Respondent: EU, Spain
Dispute stage: Panel
Agreements cited: Art. III:1, III:4, III:5  GATT 1994Art. 2.1, 2.2  Trade-Related Investment Measures (TRIMs)Art. XVI:4  Agreement Establishing the World Trade Organization

EUROPEAN UNION AND A MEMBER STATE - CERTAIN MEASURES
CONCERNING THE IMPORTATION OF BIODIESELS

Request for the Establishment of a Panel by Argentina

 The following communication, dated 6 Decemb er 2012, from the delegation of Argentina to
the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 I have been instructed by my authorities to request the establishment of a panel pursuant to
Article 6 of the WTO Understanding on Rules and Procedures Governing the Settlement of the
Disputes, regarding (DS443).

 To that end, I would ask that this item be pl aced on the agenda of the next regular meeting of
the Dispute Settlement Body (DSB), based on the following request:

 On 17 August 2012, the Government of the Ar gentine Republic requested consultations with
the European Union (EU) and the Kingdom of Spain in accordance with Articles 1 and 4 of the WTO
Understanding on Rules and Proce dures Governing the Settlement of Disputes, Article XXII of the
General Agreement on Tariffs and Trade 1994 (GATT 1994) and Article 8 of the Agreement on
Trade-Related Investment Measures (TRIMs Agreement), with regard to the provisions affecting the
importation of biodiesels for the purpose of computing compliance with mandatory biofuel targets
(Document WT/DS/443/1).

 The consultations took place on 4 and 5 October 201 2. While they enabled the parties to gain
a better understanding of their respective positions, unfortunately the consultations failed to produce a
mutually agreeable solution.

 Ministerial Order (OM) IET/822/2012 gove rning the allocation of biodiesel production
volumes for computing compliance with mandatory biofuel targets was published in the
Official Journal of the Kingdom of Spain
1 on 21 April 2012. The operative part of the Order provides
that computing for mandatory biofuel products may only be conducted in relation to biodiesel
produced entirely in plants located in the territory of Spain or of another EU member State, and in line
with previously allocated volumes, in accordance with the procedure established in the same
Ministerial Order. It is Argentina's understanding that this provision leads to discrimination against
the product from outside the Community and that it would imply a restriction on trade in biodiesels
that is inconsistent with WTO rules on trade-related investment.

1 Official Journal (BOE), No. 96, Section I, page 30992.

 The Spanish legislation appears to have been promulgated under the powers granted
to EU member States by Directive 2009/28/EC of the European Parliament and of the Council "on the
promotion of the use of energy from renewable sources"; Directive 2003/30/EC of the European
Parliament and of the Council, a nd the amendments thereto, establis hing "annual targets for biofuels
and other renewable fuels for transport purposes"; Royal Decree No. 459/2011 of the Kingdom
of Spain, which establishes "mandatory targets for biofuels for the years 2011, 2012 and 2013";
and Ministerial Order ITC/2877/2008 "establishing a m echanism to promote the use of biofuels and
other renewable fuels for transport purposes".

 On 9 October 2012, the Ministry of Industry, Energy and Tourism of the Kingdom of Spain
promulgated Ministerial Order IET/2199/2012
2, which entered into force on 17 October and partially
amended Ministerial Order IET/822/2012.

 Ministerial Order 2199 cancelled the indivi dual call for economic operators to submit
requests for the allocation of quotas for computing bi ofuel targets within a specific time-frame as laid
down in the second additional provision of Ministerial Order IET/822/2012.

 It is Argentina's understanding that in vi ew of the limited scope of the amendment
introduced by Ministerial Order IET/2199/2012, the de jure discrimination established by Ministerial
Order IET/822/2012 continues to be fully operational, as do its restrictive effects.

 Argentina considers Ministerial Order IET/ 822/2012 and its modifications and amendments
as well as the related legislation a nd implementing regulations to be in consistent with the obligations
of the EU and of the Kingdom of Spain under the WTO.

 In particular, Argentina considers that:

 By providing that only the owners of plants located in Spain and in the territory of
the EU may request the allocation of annual biodiesel production volumes for
computing biofuel obligations, the Spanish legislation violates the provisions
concerning National Treatment on Internal Taxation and Regulation, specifically
because it imposes a requirement which:

o Affects the conditions governing the marketing of biodiesels that are not
produced in the territory of the EU, in a manner inconsistent with Article III:1
of the GATT 1994;

o establishes less favourable treatment as regards the conditions for the
marketing and use of products that we re not produced in the territory of
the EU, in a manner inconsistent with Article III:4 of the GATT 1994;

o establishes a local content requirement for the use of a product, in a manner
inconsistent with Article III:5 of the GATT 1994.

 Moreover, since it is a regulation that lays down compliance obligations in order to
obtain a benefit, and makes that benefit c ontingent upon the purchase of products of
domestic or Community origin or source to the detriment of the same product of
imported origin, it constitutes a trade-rela ted investment measure (TRIM) that is
inconsistent with national treatment obliga tions and with Articles 2.1 and 2.2 of the
Agreement on Trade-Related Investment Measures.

2 BOE, No. 249, Section I, page 73592.

 As a regulation which establishes mandatory compliance provisions that are
inconsistent with the obligations of th e EU and a member State under the covered
agreements, it is inconsistent with Article XVI:4 of the Marrakesh Agreement.

 The inconsistency of Ministerial Order I ET/822/2012 with the above-mentioned provisions
would nullify or impair the benefits accruing to Argentina under the covered agreements.

 For the above reasons, Argentina respectfully requests the Dispute Settlement Body (DSB) to
establish a panel pursuant to Article 6 of the DSU, with the standard terms of reference set out in
Article 7.1 of the DSU, to examine the Spanis h measure identified herein and find that it is
inconsistent with the above-mentioned obligations of the EU and the Kingdom of Spain.

 This request for the establishment of a panel covers the measure contested by Argentina as
well as any modifications and amendments, related measures and implementation measures.

 Argentina would be grateful if you would place this item on the agenda of the next
DSB meeting, to be held on 17 December 2012, and circulate this request to Members.