The European Union is planning to lodge a complaint at the World Trade Organization over Argentina's import restrictions and is seeking other trading partners to back its suit, a source familiar with the situation said on Tuesday.
"This is a process that is advancing but it will take some time before it becomes official. We will naturally look at others that could accompany us," the source said.
It is likely to be "a matter of weeks" before the EU launches the case, the source said.
The issue has already prompted a war of words between Argentina and at least fourteen of its trading partners at the WTO, and relations with the EU have been inflamed further by Argentina's decision to seize control of YPF, an oil company majority owned by Spain's Repsol.
The United States, Japan, South Korea, Australia and other countries have all said they are unhappy about restrictions imposed by Argentina.
U.S. Ambassador to the WTO Michael Punke led the criticism at a March 30 meeting of the WTO's Goods Council, where he said Argentina had put a blanket restriction on trade by requiring import licenses on all imported goods from Feb 1 this year.
The Latin American country was further limiting imports with a "trade balancing" policy that required importers to export goods of the same value, he said, adding that the practices were "unbefitting" of a member of the WTO and the G20 group of nations.
But Argentina's Secretary for International Economic Relations Cecilia Nahón said Punke's allegations had "no basis in objective facts" and were meant to stigmatise Argentina, according to a transcript of her statement at the March 30 meeting.
"We see this as a political action because it does not involve precise questions concerning certain specific measures or sectoral policies, but rather an overall questioning of Argentina's trade policies and practices, of a kind unprecedented in the WTO," she said.
Argentina was being made into an example to discourage developing countries from using legitimate economic policies, she said, adding it was developed countries that were distorting world trade.
"An honest assessment of the multilateral trading system shows that it is not the licences imposed by Argentina and by so many other countries, but the traditional distorting measures applied mainly in the developed countries which are the root cause of the real problems in international trade," she said.
"On top of the enormous sums devoted to domestic support for agricultural producers, millions have gone into fiscal and monetary stimulus packages in recent years to meet the global crisis, and it has not yet been possible to measure the true extent of the global distortionary impact of that crisis."
Last week EU Trade Commissioner Karel de Gucht wrote to Argentine Foreign Minister Hector Timerman saying bilateral contacts had failed to resolve the problem.
"Regrettably, Argentina has not presented any valid justification for these measures nor taken any real steps to remedy the situation," he wrote in the letter dated April 19.
He urged Argentina to "revise or remove... all formal and informal measures which unduly hinder imports" and said the EU was keeping open all possibly options to address the matter.
EU trade spokesman John Clancy declined to comment on the likelihood of an EU-backed suit against Argentina on Tuesday. (Reporting by Tom Miles; additional reporting by Sebastian Moffett in Brussels;