Qatar turning to WTO may result in Gulf states dispute dragging on for years

Qatar resorting to the World Trade Organization (WTO) to settle a trade dispute with Arabian Gulf countries may drag on for years because of the complex process, lawyers said yesterday.

Qatar has raised a complaint against Saudi Arabia, the UAE and Bahrain with the WTO in response to the boycott the three countries have imposed on it.

Qatar’s economy and commerce ministry said the complaint accuses the boycotting countries of violating the WTO’s core laws and conventions on trade of goods and services, and trade-related aspects of intellectual property.

“The arbitrary measures taken... are a clear violation of the provisions and conventions of international trade law,” Sheikh Ahmed bin Jassem Al Thani, Qatar’s economy and commerce minister said.

The boycott “is unprecedented in the framework of economic blocs,” he said.

The UAE, Saudi Arabia, Bahrain and Egypt on June 5 broke diplomatic ties with Qatar and cut off air, sea and land access to the country over Doha’s support for “terrorist groups aiming to destabilise the region”. The dispute is the most serious between GCC members since the organisation’s creation in 1981. Egypt was not included in the complaint with the WTO.

The first step Qatar has taken is to request consultations under WTO with its Gulf neighbours, a process that can last 60 days, after which Qatar can request a WTO panel to adjudicate the conflict.

“They [Qatar] tried to cover as many different agreements as possible [in the consultation request],” said Philippe De Baere, a Brussels-based trade lawyer with the law firm Van Bael & Bellis. “It is going to make legal proceedings much more complicated.” The complication also arises from the dispute settlement procedure under the WTO, which can last years.

“The [dispute] proceeding might take about two years and could result in the Gulf countries being told to stop the boycott,” said Edwin Vermulst, a partner with the law firm VVGB Advocaten and a Brussels-based trade lawyer.

“If the Gulf countries would not do so, Qatar might then retaliate.”

There has been precedent to such disputes within the WTO, he added. Russia for example, has recently asked for consultations with Ukraine over its sanctions on Russian goods and services.

“This [dispute settlement process] is very much a diplomatic process as opposed to being a pure legal process. There are no damages awarded to the winning party,” said Mr De Baere. “For a country like Qatar which is quite small, it will be very difficult to find ways to retaliate.”

Gulf countries have argued that the measures they have taken are in compliance with article 21 of the General Agreement on Trade in Services, which allows WTO member states to take action against another state that threatens their security and stability.

The political and economic dispute is already taking a mounting toll on Qatar’s economy, which is expected to slow this year as the stand-off enters into its second month.

The benchmark Doha Securities Market index dropped as much as 10 per cent after the move to isolate Qatar.

Qatar has requested consultations under WTO with its Gulf neighbours, a process that can last 60 days