Chapter 9 – International Law

Argentina vs. US at WTO over beef importsBy Clinton Maxwell

International Business major

Interests include European and Latin American affairs

Free trade advocate Passionate about

seeing matters from a global perspective

Proficient in French, Spanish and Italian

About Clinton Maxwell

Background – World Trade Organization (WTO)

• Established in 1995 by General Agreement on Tariffs and Trades (GATT)

• Over 150 member nations• Mission is to encourage international trade and to assist in

resolving trade disputes among nations.• If a member nation A believes that member nation B is unfairly

restricting trade:• Nation A can request a consultation via the WTO with nation

B’s trade representative.• If the consultation does not resolve the problem, Nation A can

request that the WTO's Dispute Settlement Body (DSB) form a panel, which consists of three nations uninvolved in the dispute.

• If the DSB’s final report is unsatisfactory to Nation A, further appeals are also available.

• Majority of cases do lead to a satisfactory settlement.

(Courtesy Wikipedia and Business Law and Legal Environment)

Argentina is currently our 43rd largest goods trading partner Exports to Argentina total $9.3 billion Imports from Argentina total $5.3 billion Trade surplus of $4 billion Top US export industries to Argentina:

◦ Machinery ($1.6 billion)◦ Electrical Machinery ($903 million)◦ Petroleum ($731 million)◦ Organic Chemicals ($724 million)◦ Plastic ($494 million).

U.S. imports of agricultural products from Argentina total $1.2 billion

(Courtesy Office of the United States Trade Representative)

Trade facts and figures – US & Argentina

Argentina is world's second highest per capita consumer of beef, at 120 lbs. per year.

Third largest beef exporter in the world after Brazil and Australia.

Beef export revenue is estimated to be $500-700 million per year.

Beef and its production play a significant role in the cuisine and culture of Argentina.

Argentine beef is prized among gourmet and health-conscious consumers for being grass-fed and not grain fed.◦ Improved flavor ◦ Lower in saturated fat◦ Higher in Omega 3 fatty acids

(Courtesy Wikipedia)

Facts about Argentine Beef

Asado Argentino, a traditional Argentine dish

What’s the “beef” between Argentina and the US over beef?

Argentina United States

Dispute started when licensing requirements were implemented on certain US exports. (Freedman)

Complained at WTO, Arguing that these policies are protectionist and in violation of GATT. (Freedman, ICTSD)

Round 1

What’s the “beef” between Argentina and the US over beef?

Argentina United States Dispute started when

licensing requirements were implemented on certain US exports. (Freedman)

Complained at WTO, citing cattle certified free of disease since 2003. (Palmer)

Merely a fabricated excuse by the US for not wanting to import its agricultural goods. (Freedman)

Complained at WTO, Arguing that these policies are protectionist. (Freedman, ICTSD)

Retaliated by restricting imports of Argentine beef due to past outbreak of foot-and-mouth disease among cattle. (ICTSD)

Round 2

Process of resolution of this particular trade dispute through the WTO:

◦ Argentina had filed a request on 8/31/12 with the WTO for consultations with the U.S. on this matter (Freedman).

◦ If the matter isn’t resolved in 60 days, Argentina reserves the right to seek a dispute settlement panel (Freedman).

◦ Has not been resolved as of yet.

(Courtesy Jennifer M. Freedman – Bloomberg Businessweek)

Connection to course material about International Law

Could severely impact availability of a popular food that is consumed by gourmet consumers in the United States.

Is Argentine beef safe for consumption despite Argentina’s protests to the contrary?

Potential for millions of dollars of lost revenue for Argentine ranchers

Potential for lost revenue for key aforementioned US industries (Machinery, Electrical Machinery, Petroleum, Organic Chemicals, and Plastic)

Broader diplomatic implications:◦ Trade is closely linked with goodwill among nations◦ Protectionism is sometimes abused in the name of patriotism (ICTSD)◦ Will this lead to a breakdown in other areas of US-Argentina

cooperation?

Ramifications

Is the WTO being used by the US and Argentina in a manner consistent with its mission?

Are the US and Argentina abusing their WTO obligations by pettily retaliating with consumer complaints instead of fixing the broader underlying problems in their respective markets?

If history and odds are on their side, this dispute will be resolved in a mutually beneficial manner for both countries, but one cannot be absolutely certain.

To be continued

At issue

Argentine Beef. Wikipedia. http://en.wikipedia.org/wiki/Argentine_beef Argentina Trade Tensions Escalate with Six New WTO Cases. International

Center for Trade and Sustainable Development. Volume 16, Number 30 http://ictsd.org/i/news/bridgesweekly/144563/ (September 12, 2012)

Beatty, Jeffrey F., and Susan S. Samuelson. Business Law and the Legal Environment. Mason, OH: Thomson/South-Western/West, 2004.

Freedman, Jennifer. Argentina Complains at WTO Over U.S. Curbs on Meat Imports. Bloomberg Businessweek http://www.businessweek.com/news/2012-08-31/argentina-complains-at-wto-over-u-dot-s-dot-curbs-on-meat-imports (August 31, 2012)

Palmer, Doug. U.S. defends restrictions on Argentine lemons, beef. Reuters. http://www.reuters.com/article/2012/08/22/us-argentina-trade-usa-idUSBRE87L0MP20120822 (August 22, 2012)

Profile – Argentina. Office of the United States Trade Representative. http://www.ustr.gov/countries-regions/americas/argentina

World Trade Organization. Wikipedia. http://en.wikipedia.org/wiki/World_Trade_Organization

Bibliography