Wednesday, April 25, 2012

Argentina: The Consequences of Nationalizing Foreign Companies

According to EFE, Spain proposed a series of consequences through its membership in EU on Monday (April 23) in an effort to force Argentina into negotiation over its recent nationalization of YPF, a unit of Spanish oil major Repsol. Specifically, Repsol wants fair compensation for the nationalization of its majority stake in YPF.

Among the measures proposed by Spain and which its partners have promised to study is the possibility of filing a claim with the World Trade Organization (WTO) and excluding Argentina from the Generalized System of Preferences before the scheduled date in January 2014.

COMMENT: At the same time, Spain wants further negotiations on the agreement with MERCOSUR (the trade bloc comprised of Argentina, Brazil, Uruguay and Paraguay) without Argentina. 

According to EU sources, several foreign ministers expressed their complete support for Madrid during the recent ministerial meeting, among them Britain’s William Hague, while some also did so in remarks to reporters.