The United States announced on Monday that it was suspending trade benefits for Argentina under the Generalized System of Preferences, which waives import duties for select goods from developing countries. In 2011, the U.S. imported approximately $500 million worth of goods under the GSP program from Argentina. This sanction will mostly affect the wine, beef, sugar, and olive oil industries.

The decision came after years of wrangling over a 2005 ruling when the World Bank’s International Centre for Settlement of Investment Disputes ruled against Argentina in a $300 million case involving two American companies, Azurix and Blueridge—a case that dates back to the Argentine debt default in 2002. Although the settlement was widely accepted by the international community, Argentina has refused to pay damages stemming from the case. 

A working paper published by Buenos Aires-based Red Latinoamericana de Comercio Exterior in anticipation of the expect U.S. decision notes that “this sanction is effectively null in the context of the overall trade with the US. It only represents 14 percent of total sales to the U.S. and even a smaller .0007 percent when compared with worldwide Argentine exports.” Although this does not represent a big economic hit for the South American country, experts say that it still has important political consequences.

Argentina is the first country ever to be suspended from this program.