June 29, 2017 / 6:12 PM / 5 months ago

Qatar considering WTO dispute in Gulf crisis

GENEVA (Reuters) - Qatar is considering launching a complaint at the World Trade Organization against a “blockade” by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt, its representative at the global trade body said on Thursday.

Buildings are seen on a coast line in Doha, Qatar June 5, 2017. REUTERS/Stringer

“We are exploring all possible legal avenues, including, but not limited to, the (WTO) Dispute Settlement Body,” Ali Alwaleed al-Thani, director of Qatar’s WTO office, told Reuters.

The feud erupted this month when the four countries severed diplomatic and travel links, accusing Qatar of supporting terrorism and regional foe Iran. Qatar denies the accusations.

Al-Thani said the measures went against the fundamental principles of WTO laws, including agreements on trade in goods, services and intellectual property rights, as well as the WTO trade facilitation agreement, supposed to cut red tape at customs and speed cross-border trade.

“They were among the first countries to ratify this agreement and now the first to violate it,” he said. “There are also issues regarding international maritime law and air transport rights.”

The WTO dispute system can end with costly trade sanctions imposed on wrongdoers, but it normally takes at least two or three years and sometimes much longer.

“We work under the premise that these measures are going to be in place for a while. It’s not necessarily so, but we have to work under this premise,” al-Thani said.

NATIONAL SECURITY

He expected the four countries to cite national security as a reason for the trade restrictions, an exemption permitted by the WTO but one that has never been used in its 22-year history. Trade experts refer to it as the “nuclear option” because of the potential systemic damage it might do to the WTO.

Such a defense could be challenged on the grounds of proportionality and necessity, al-Thani said. “What’s the national security value of limiting exports of milk to Qatar?”

On Wednesday, Britain’s The Guardian newspaper published an interview with the UAE’s ambassador to Russia, in which he said more economic sanctions could follow, including forcing other countries to choose between trading with Qatar or its accusers.

Al-Thani said that would violate WTO rules. “It would be unfathomable for a member to ask other members to choose their trading partners,” he said.

The UAE, Saudi Arabia and Bahrain are members with Qatar of the Gulf Cooperation Council, a trading club with a common customs border.

”The customs union is going through a tough time. Will it survive?“ al-Thani said. ”With regards to the actual trade effect, it would be relatively easy for us to readjust.

“We’re mostly a net importer from within the GCC, so it’s the countries that are imposing the blockade that stand to lose most,” he said, adding Qatar was continuing to sell gas to the UAE via the Dolphin pipeline and directly by ship.

“It’s solving a headache by shooting yourself in the head, which is not necessarily the way political issues should be resolved,” he said.

Qatar’s main concern was imports of food and dairy products.

“We are finding alternatives, diversifying our supply and also expanding domestic production,” he said.

Instead of using the UAE’s Jebel Ali port, Qatar will expand shipping links with Oman, India and elsewhere beyond the GCC, he said.

Editing by Janet Lawrence

Our Standards:The Thomson Reuters Trust Principles.
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