UAE Withdraws its WTO Complaint Against Qatar

Tit-for-Tat Legal Strategy

As noted below, Qatar brought a complaint before the World Trade Organization alleging that the UAE had violated various international trade treaties by imposing a land, sea, and air blockade on Qatar along with neighboring countries Saudi Arabia, Bahrain, and Egypt beginning in June 2017.

UAE then brought its own complaint.  It alleged Qatar had banned the sale of products imported from the UAE and struck UAE companies from a list of approved participants in infrastructure projects. 

This past week saw developments in the second proceeding.  For the complete story from The Peninsula Qatar, see here.  The following excerpt provides a summary of the developments. 

The Ministry of Foreign Affairs’ statement underlined that the UAE’s decision to withdraw its complaint so soon after initiating this dispute confirms that Qatar has, and continues to, uphold and comply with its obligations under the WTO, adding “Evidently, the UAE had no arguments or evidence to show otherwise, as such, the UAE has formally withdrawn their complaint prior to the initiation of any adjudication by a WTO Panel”. 

The statement further said that the State of Qatar has previously asserted that the inability of UAE goods to enter the Qatari market is due solely to the trade restrictive measures imposed by the UAE, which has in turn - led to the suffering of the UAE companies. The continued export of gas to the UAE is a clear example of how Qatar upholds and respects its international obligations, the Ministry has stressed. 

The statement asserted that the State of Qatar continues to pursue its own complaint against the UAE’s unlawful measures imposed on 5 June 2017, stressing that UAE must withdraw its illegal trade-restrictive measures. 

It also pointed that a WTO panel is currently reviewing the claims brought by Qatar and will issue a binding report in due course.

UAE's version of events differs.  The WTO published this notice announcing the withdrawal.  It included the UAE's reasons for withdrawing its complaint.

The following communication, dated 8 August 2019, from the delegation of the United Arab Emirates to the Chairperson of the Dispute Settlement Body and the Director of Legal Affairs Division, is circulated at the request of the delegation of the United Arab Emirates.
_______________

I write to inform you that the United Arab Emirates (UAE) no longer considers it necessary to pursue its complaint in DS576. This is due to Qatar's public withdrawal of the measures in question. Accordingly, there is no need to compose the Panel, and I kindly request that the matter now be concluded.

The UAE initiated this dispute against directives imposed by Qatar barring all UAE goods and pharmaceuticals from sale in Qatar. While Qatar maintained that it instituted these directives for purposes of public health and consumer safety, the application of the ban to all UAE goods clearly indicated that these reasons were pretexts. Qatar did not offer an adequate or lawful explanation under the WTO rules for why it took this action, and did not engage the WTO's security exceptions.

In the present dispute, Qatar has now publicly declared, including to the Dispute Settlement Body (DSB), that it has withdrawn the measures challenged by the UAE. Accordingly, the UAE is willing to consider that this dispute has been sufficiently resolved, and the matter should be concluded.

In concluding this matter, the UAE notes that it will not hesitate to bring a new complaint if Qatar adopts or maintains any measures that are non-compliant with the WTO rules. The UAE will continue in DS526 to defend its action to terminate relations with Qatar to protect its essential security interests. The UAE is confident that it has acted, and continues to act, in full conformity with WTO rules and security exceptions.

The UAE thanks you and the Secretariat for the assistance provided in this matter. The UAE kindly requests that this communication be circulated to the Dispute Settlement Body.

Despite these allegations of a public declaration by Qatar, my search of two local English-language papers did not show any stories supporting this aspect of the statement.  Proof will come if products from the UAE begin showing up on Qatari shelves.

Qatar's WTO Complaint

In Chapter 4 of Qatar: Political, Economic, and Social Issues, I outlined the various lawsuits and other legal actions Qatar has taken to attempt to end the siege and compensate its victims.

 

I began that discussion saying:

While states resolve most inter-state disputes through negotiation and diplomacy, the blockading countries have consistently refused to negotiate with Qatar, either directly or through third-party intermediaries. Accordingly, Qatar has pursued a number of rights-based processes to balance power; resolve some of the consequences of the siege; assert its rights under international law, treaties, and agreements; gain legitimacy in the international community; protect its citizens; bolster its Qatar-based businesses; and perhaps establish guidelines before international adjudicative forums that may influence later decisions of these forums in similar cases.  

Qatar has pursued legal claims based on airspace, marine, human, and trade rights. Rights-based processes require time to prepare pleadings or complaints, assemble and present relevant information, schedule and give arguments to the adjudicative neutral, and otherwise provide materials supporting a decision on the matter. Thus, many of the pending complaints filed by Qatar are still in various stages of the right-based processes, but they eventually could set important guidelines that adjudicative bodies may consider in resolving future disputes involving similar facts.

In discussing the WTO proceeding filed by Qatar, I explained:

On August 4, 2017, Qatar filed with the World Trade Organization (WTO) requests for consultations with Bahrain, Saudi Arabia, and the UAE under Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes. They alleged that acts taken to start and maintain the siege constituted a coercive attempt at economic isolation that violated three WTO trade agreements. By requesting the consultations, Qatar triggered the first required step in the dispute resolution process. If the negotiations failed to settle the dispute in 60 days, the WTO could set up a Dispute Settlement Body (DSB) panel.

On November 22, 2017, the WTO agreed to form a DSB panel to hear Qatar’s complaints. This process can take months or years to complete. Moreover, the respondent can veto the adoption of the panel report and any authorization of counter-measures. Accordingly, the process encourages a diplomatic solution.

People watching this proceeding are concerned that the complaints will require the WTO to rule on the scope and meaning of the national security exceptions to the three WTO agreements. The UAE argues that Article XXI of the General Agreement on Tariffs and Trade (GATT), Article XIVbis the General Agreement on Trade in Services (GATS), and Article 73 the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) allow members to trigger the national security defense. The UAE argues that its blockade-related actions protect it against Qatar's funding of terrorist organizations. The UAE also argues that the issues raised in Qatar’s complaints are not trade issues subject to the three WTO agreements. Moreover, the WTO is not equipped to handle these claims.

Bahrain and Saudi Arabia also asserted that their actions fell under the national security exceptions found in the WTO agreements. Saudi Arabia further asserted that the WTO agreements do not compel a member to provide the WTO with information supporting the assertion of the national security exceptions.

Qatar agrees that a country has the right to take bona fide security measures, but a country cannot self-regulate the defense because it would “alter the balance of members' rights under the WTO agreements.” Any WTO ruling must now deal with this defense, and the ruling could set precedent that would undermine global trade and the goals of the WTO dispute resolution process.

Countries have invoked the national security exception sparingly and, typically, in good faith. As one scholar noted: “In over sixty years of international trade, invocations of the security exception have only been challenged a handful of times, and those challenges have never resulted in a binding GATT/WTO decision.” A Chatham House researcher, considering the issue in the context of U.S. tariffs imposed against China, explained:

"The [U.S.] tariffs were ostensibly levied on national security grounds, and the WTO allows for trade policy to protect industries relevant for national security. But this [exception] has been invoked so rarely and narrowly that there is little precedent as to what constitutes a legitimate national security concern.

Indeed, the WTO will be wary of finding against a state that invokes national security concerns – it is not a politically sustainable position for an unelected international body to claim it understands a state’s national security needs better than the state’s own government, no matter how implausible the justification might be on its face."

Given these concerns, Qatar may expect more outside efforts to force a diplomatic solution to the trade-related impacts of the siege.

Over a year after the siege started, the WTO has not yet “composed” the DSB panel it established in November 2017 for the Qatari disputes. Thus, this proceeding again shows that rights-based proceedings cannot offer a quick resolution of disputes, even if they offer other advantages over power-based interventions.

(Citations and references omitted).

I summarized my discussion by saying:

When the blockading countries consistently refused to negotiate a resolution of the dispute, Qatari officials quickly used a number of rights-based approaches to ameliorate the adverse consequences suffered by its citizens, expats, and businesses because the blockading countries arguably breached laws, treaties, contracts, and other sources of legal rights. Qatar has relied primarily on international treaties for the standards they seek to apply to the different problems created by the blockade. Several of the processes reveal how the disputants can have widely varying interpretations of their obligations under these laws, treaties, and agreements. They also have widely varying interpretations of the facts of the dispute.


While the right-based processes can help parties avoid escalation of the dispute, the Qatari experience illustrates several limitations of the rights-based approach. First, these processes take time. Many of the claims Qatar began to assert just after the start of the siege are finally reaching international tribunals, including the ICJ, a year later. Some of those tribunals may issue rulings on the merits of the claims in 2018 or 2019. Second, the blockading countries are challenging the jurisdiction of the adjudicative bodies on three grounds. They argue that the tribunals fail to have jurisdiction over the claims because the countries have not signed the applicable treaty or agreement, because they must agree to the jurisdiction of the court under a treaty reservation, or because the court does not have subject matter jurisdiction. Third, these tribunals may have pre-conditions that the parties must meet to access the courts. These pre-conditions can slow the process or provide an independent basis for challenging the court’s jurisdiction. Fourth, these rights-based processes rely on the skill of legal representatives and the ability to muster sufficient evidence of any violation of the applicable standard. Fifth, these rights-based processes cannot always deliver the outcomes Qatar needs and wants. 

Most of these rights-based interventions have not yielded desired rulings at this time, but could provide important guidelines for later cases once the parties complete the processes. At the same time, many observers fear that the rights-based proceedings could establish negative rulings supporting the blockading countries’ broad assertion of a “national security” rational for its imposition of the siege. Finally, even if Qatar prevails in these tribunals, it will face potential problems with enforcing any order or judgment issued by a court or administrative body.