Chinese Goods Met Protectionism in Argentina

Since the second half of 2008, the impact of the international financial crisis on Argentina has been more and more apparent. The government therefore worked out a bunch of measures to stabilize the economic growth and the employment rate, including a series of measures to restrict the imported goods. Some are so obvious protectionist measures that have aroused strong resentment from its major trade partners, and meanwhile goods imported from China to Argentina are also greatly affected.

The main import and export protectionist measures since October last year include:

1. Set "reference price" on a large quantity of goods from overseas. If the import prices are lower than the "reference price", Argentine customs will launch a probe into the imports on the pretext of being suspected of customs tax evasion and dumping.

2. Expand goods lists of non-automatic import licensing. The government will greatly raise the tariff if it thinks too many imports will threaten the survival of the state-owned enterprises. Worse still, the Argentine customs even prolongs the sending out of the automatic import license on purpose. Previously, the Argentine customs usually sent out the automatic import license within 48 hours, but now it extends to 10 working days, resulting in a flood of imports arriving at the Argentine port finding no ways to enter the customs, only to pile up in the warehouse of the wharf.

These protectionist measures have incurred the wrath of its major trade partners, and the trade dispute between Argentina and Brazil also has a great impact on their relationship. Members of the Mercosur such as Uruguay, Paraguay and the like also strongly criticized Argentina for its protectionist measures at the Southern Common Market—MERCOSUR summit.

China is Argentina's second biggest trade partner. The adverse effect of the global financial crisis has inflicted an obvious downturn on Sino-Argentine bilateral trade. The imposition of the anti-dumping investigation and restriction on goods imported from China to Argentina since last year have made things worse. During the first five months of this year, trade between China and Argentina was down 44.8% year-on-year, with a drop of 47.3% in exports to Argentina.