Gulf blockade: Why Qatar goes to WTO

Dhaka,  Tue,  26 September 2017
Published : 23 Aug 2017, 19:49:17

Gulf blockade: Why Qatar goes to WTO

Gulf blockade: Why Qatar goes to WTO
Asjadul Kibria
Doha, the capital city of Qatar, has a historic link with the World Trade Organisation (WTO). The oil-rich Gulf state hosted the fourth ministerial conference of the organisation in 2001.  Doha Development Agenda (DDA) was adopted to formulate a new set of multilateral trade rules. Delicate Doha Round negotiations are yet to be concluded.

Sixteen years have since elapsed and Qatar has now formally lodged a complaint with WTO against the economic and trade blockade, imposed on it by its neighbouring Arab countries. Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Yemen and Egypt severed diplomatic relationship with Qatar during the first week of June this year. Maldives, Mauritania, Senegal and Comoros joined the rally immediately thereafter.

Saud Arabia, which has land boundary with Qatar, blocked any entry and exit thorough the land port. As a result, Qatari imports of foods and essentials have been seriously disrupted. Saudi Arabia, along with UAE and Bahrain also blocked their sea and air spaces for Qatari naval and air carriers. It forces Qatari national flag carrier, Qatar Airways, to redirect its routes through Iranian air space making the journeys time consuming and costly. For example, flight from Doha to Khartoum, capital of Sudan, now takes almost six hours as it flies over Iranian and Omani air spaces before entering enters into African air spaces. Before the blockade, the flight took around three hours and 40 minutes by using Saudi Arabian air space.

The blockade has been imposed on the allegation that Qatar supports terrorism in the Arab region. The blockading countries have placed a 13-point condition and asked Qatar to comply these to restore diplomatic ties. The conditions include: curbing diplomatic ties with Iran, severing all ties with 'terrorist organisations' like Muslim Brotherhood, Islamic State, al-Qaida and Lebanon's Hezbollah, and shutting down Al Jazeera news channel. 

So far, Qatar has rejected to comply with any of the conditions but offers dialogue to discuss the concerns of its neighbouring countries. 

Within a month of the diplomatic crisis, Doha decided to move, simultaneous with usual diplomatic efforts, different international forums to legally challenge the blockade. At that time, Doha hinted that it would drag the blockading countries to the platform of the WTO dispute settlement.  

The UAE is the fifth largest export destination of Qatar while Saudi Arabia is the 14th largest one. Again, UAE is the fifth largest source of import of Qatar. Thus, its trade relations with two blockade-imposing countries are significant. 

Later on July 31, Qatar formally filed a protest at the WTO by 'requesting consultations' with three countries - Saudi Arabia, UAE and Bahrain. Air, sea and land blockades by these countries hit Qatar very hard. It excludes Egypt though the country restricted its air space for Qatari air carriers. 

As per WTO rule, there is a 60-day deadline for the plaintiff and accused parties to settle the complaint through the consultative process. If the parties failed to settle the dispute through consultation, the legal procedure will start by formation of panel for hearing the complaints. 

Qatar has submitted three sets of a six-page official request for consultations with the three countries. It has accused the countries of adopting coercive moves to economically isolating it. It has alleged that they have violated several legal rights it is entitled to under three agreements of the WTO. These are General Agreement on Tariffs and Trade (GATT), General Agreement on Services (GATS) and Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Qatar alleges that certain measures taken by the UAE "appears to violate Article I:1 of the GATT 1994 because, through the: maritime border and airspace closure by the UAE; prohibition on entry into UAE ports of (i) all ships owned by Qatar, Qatari individuals or Qatari companies; and (ii) all ships bearing the Qatari flag; prohibition on the landing of Qatari aircraft at airports in the UAE; prohibition on the discharge in UAE ports and airports of any goods transported from Qatar; and, prohibition on the loading in UAE ports and airports of any goods destined for Qatar; the UAE appears to fail to accord immediately and unconditionally to like products originating in, or destined for, Qatar relevant advantages, favours, privileges or immunities that are granted by the UAE to products originating in, or destined for, other countries."    

 Qatar has listed a series of violation or breach of the WTO agreements. In an immediate reaction, the UAE, however, claimed that the sanctions imposed by the UAE, Saudi Arabia and Bahrain did not contradict the agreements of the WTO rather were in line with Article XXI of GATT and Article XIV of GATS. These articles allow such moves in the case of national security exceptions.

Thus, one thing is clear that the sanction-imposing countries will strongly defend their stands in WTO. In that case, it will be a long legal battle and likely to continue for two years or more. 

There is, however, little scope in WTO system to deal with economic sanction.  In fact, economic sanction or blockade is a political tool while the dispute settlement mechanism of WTO is basically designed to deal with technical issues of economy and trade.

Under the dispute settlement procedure of WTO, even if the ruling goes in favour of Qatar, it has to wait for a few more months to get any remedy. Moreover, win in WTO doesn't bring any direct award. The essence of the multilateral trade body's dispute settlement is to correct the wrong course of action, not to penalise any party for any wrongdoing. 

Thus, recourse to the WTO system may not bring any direct or immediate benefit to Qatar. Nevertheless, the move demonstrates confidence of the Doha Round-fame country on multilateral rule-based trade regime.  

It may be mentioned here that Qatar had earlier lodged a complaint with the International Civil Aviation Organisation (ICAO) regarding air space blockade by its neighbours. The UN aviation body held that Bahrain, UAE and Egypt should reopen their airspace to Qatari aircraft as all of them are signatories of the International Air Services Transit Agreement. The ICAO's legal opinion has created some breathing space for Qatar as Bahrain and UAE has reopened the restricted air space partially and temporarily. This gives a moral boost to Qatar. Saudi Arabia is not a signatory of the agreement and so not required to comply with any legal opinion of the ICAO. 

The three accused Arab countries are yet to respond to Qatar's request for consultation. Being the members of the WTO, the countries, however, have no option to skip the dispute settlement procedure. Whether the disputes will be resolved promptly through mutual consultation or drag for years now mostly depend on the blockade-imposing countries.

Editor : A.H.M Moazzem Hossain
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