Legal Trade Blockade Against Qatar under WTO MFN Regime

This article examines the legality of the trade blockade against Qatar under the security exception within the WTO MFN regime. It analyzes the Most Favoured Nation Treatment and Security Exceptions under the WTO rules. The article also reviews and analyzes cases and justifications for the illegality of the blockade based on WTO case laws.

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LEGALITY OF THE TRADE BLOCKADE AGAINST QATAR UNDER THE SECURITY
EXCEPTION WITHIN THE WTO MFN REGIME

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Table of Contents
LEGALITY OF THE TRADE BLOCKADE AGAINST QATAR UNDER THE
SECURITY EXCEPTION WITHIN THE WTO MFN REGIME.....................................1
1 Introduction........................................................................................................4
1.1 Background................................................................................................4
1.2 Literature Review......................................................................................7
i) Article I General Most Favoured Nation Treatment....................................8
ii) Article XXI Security Exception....................................................................8
2 Chapter One: Most Favoured Nation Treatment.........................................8
2.1 Most Favoured Nation Treatment (MFN)..............................................8
2.2 Security Exceptions (XXI, GATT 1994)...............................................12
3 Chapter Two: Qatar and the Blockade......................................................16
3.1 Background..............................................................................................16
3.2 Analysis of the Three Consultation Requests by Qatar to the
Dispute Settlements Body under the Dispute Settlement Understanding (DSU)
20
4 Chapter Three: Illegality of the Blockade Based on WTO Case Laws. 27
4.1 Review and analysis of cases...............................................................27
4.2 Justification..............................................................................................32

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4. Summary......................................................................................................35
5 Conclusion.......................................................................................................36
6 Bibliography

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1 Introduction
1.1 Background
The world’s international trade has changed in the past ten years1. Through diverse
trade and improvement, the first quarter of 2018 has shown an increase in international
merchandise trade by 5.3%in exports and 5.8% in imports, considered the fastest growth
in comparison to the past two years2. This is because of the role that the World Trade
Organization (WTO)3 has played in ensuring the expansion of trade, the WTO Director-
General Roberto Azevêdo, stated: “Robust data and statistics provide an essential basis
for all of our work at the WTO, helping us to pursue our mission of making the
opportunities that trade offers available to all4”. Since its creation in 1994, the prominence
of regulating International trade has increased exponentially5. An important principle in
the WTO is the ‘Most-Favoured-Nation (MFN)’, which is incorporated in the three major
agreements of the WTO; The General Agreement on Tariffs and Trade (GATT)6, the
General Agreement on Trade in Services (GATS)7, the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS)8. They cover the trade aspects handled
by the WTO9. As Article 1 of the GATT states in paragraph 1:
‘With respect to customs duties and charges of any kind, and of which are
imposed on or in connection with importation, exportation, or imposed on the
1 WTO,
World Trade Statistical Review [2017]
2 International trade statistics: trends in first quarter 2018
Organisation for Economic Co-operation and
Development (2018)
3 See Marrakesh Agreement Establishing the World Trade Organization, pmbl., cl. 3, Apr. 15, 1994, 1867 U.N.T.S. 154, 33
I.L.M. 1144 (1994) [hereinafter WTO Agreement].
4 Ibid (n1)
5 Peter Lindsay, ‘The Ambiguity of GATT Article XXI: Subtle Success or Rampant Failure?’ (2003) 52 Duke Law
Journal 1277
6. General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194 (GATT 1947), which has been
incorporated into General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, WTO Agreement, supra note 1, Annex IA,
1867 U.N.T.S. 187, 33 I.L.M. 1153 (1994) [hereinafter GATT]
7 General Agreement on Trade in Services, Apr. 15, 1994, WTO Agreement, supra note 1, Annex IB, 1869 U.N.T.S. 183, 33
I.L.M. 1167 (1994) [hereinafter GATS]
8. Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, WTO Agreement, supra note 1,
Annex IC, 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994) [hereinafter TRIPS]
9 Rahma Abd Alla Bakhiet AbuAagla ‘
New Developments in the Most-Favoured-Nation Clause with
Particular Reference to Trade’ (2004) p.17

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international transfer of payments for imports or exports, and with respect to the
method of levying such duties and charges, and with respect to all rules and
formalities in connection with importation and exportation, and with respect to all
matters referred to in paragraphs 2 and 4 of Article III,* any advantage, favour,
privilege or immunity granted by any contracting party to any product originating in
or destined for any other country shall be accorded immediately and
unconditionally to the like product originating in or destined for the territories of all
other contracting parties10’
The Article implements ‘immediately and unconditionally’ any type of trade facilitation for
all contracting parties without discrimination to any party regardless of how they act or
behave in terms of fulfilling the obligations under the agreement11. The MFN principle,
therefore, promotes treating members equally and eliminates discrimination between
trading partners. It is also covered in the major agreements of WTO that slight changes
have been made to make the principle applicable and ensure that the liberations of WTO
are smoothly operational12.
However, there is a critical exception in the GATT, which is all about the Security
Exceptions demonstrated in Article XXI. The Article allows the contracting parties to
evade their general obligations under the GATT agreement for national security
reasons13. The Article excludes preventing contracting parties of the GATT:
(b) from taking any action which it considers necessary for the protection of its
essential security interests: (i) relating to fissionable materials or the materials
from which they are derived; (ii) relating to the traffic in arms, ammunition and
10 GATT. Art I
11 The Rise and Fall of the Most-Favored-Nation Clause, Pinar Cebi Georgetown University, Rodney
Ludema, U.S. International Trade Commission and Georgetown University, No. 2002-06-B, 2002, p 1
12 Ibid (N11)
13 Ibid (n5)

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implements of war and to such traffic in other goods and materials as is carried on
directly or indirectly for the purpose of supplying a military establishment;
(iii) taken in time of war or other emergency in international relations14.
Significantly, as this Article is subject to various interpretations, it could create confusion
especially when countries abuse the Article and implement sanctions on other members
of the WTO through invoking of Article XXI as a justification for such actions15.
In June 2017, a Saudi-led quartet, involving the United Arab Emirates (UAE), Bahrain,
and Egypt, imposed a diplomatic and economic blockade on the state of Qatar. The crisis
started by the publication of fake political statements attributed to the Emir of Qatar on
the Qatar National TV Chanel16, which, according to the investigations associated with the
Federal Bureau of Investigation (FBI), was hacked. Qatar's Ministry of Interior stated
that the cyber-crime used innovative technology. The revealed results confirmed that
‘
The investigation team was able to identify the sources through which the crime of piracy
was committed17
’. Since then, Qatar was economically and diplomatically cut by the
Saudi-led quartet where they adopted a full economic blockade on goods, services and
different aspects of intellectual property rights. Based on that Qatar decided to contest
the blockade’s legality at the WTO Dispute Settlement Body (DSB) as the economic
restrictions may constitute a violation of the WTO obligations18. Qatar requested the WTO
14 GATT, Art.XXI,
15 Raj Bhala, ‘National Security and International Trade Law: What the GATT Says, and what the United
States Does’ (1998) 19 citing University of Pennsylvania Journal of International Law 263, 265
16 Thembisa Fakude, Qatar and its blockading nations articulate a different foreign policy at the 72nd UN
General Assembly, Al Jazeera Centre for Studies, 2017, p. 2
17 Ministry of the Interior Statement on Piracy Crime on Qatar News Agency Website (2017)
18 Johannes Fahner, ‘Qatar under Siege: Chances for an Article XXI Case?' (EJIL: Talk! 2018)1

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start consultations with Saudi Arabia, the (UAE) and Bahrain concerning measures
adopted by these three countries, which allegedly restrict trade in goods, services, and
trade-related intellectual property rights. In contrast, the three countries invoked the
National Security Article by alleging that Qatar funds terrorist organizations and the action
taken against Qatar was based on essential national security19.
In relation to the subject matter, this dissertation aims to examine the legality of Qatar
Blockade under the WTO Rules by looking into Article 1 General Most Favoured Nation
Treatment and Article XXI Security Exceptions.
Research Hypothesis: the hypothesis is that Qatar blockade is illegal under the WTO
rules because the sanctioned countries used the exception to justify their position rather
than fulfilling the general obligation under the WTO agreements.
1.2 Literature Review
In the Gulf region (GCC), this blockade has set a precedent as it has not occurred
before due to the historical solid relations between the Gulf countries. Moreover, this is
also the first incidence where a Gulf country has sought justice under the WTO settlement
system. This dissertation sheds the light on:
i) Article I General Most Favoured Nation Treatment
Qatar is a member of the World Trade Organisation and all the countries that are
under the World Trade Organisation give each other most favored Nation of MFN and
National Treatment status. This status ensures that countries that are under this status
should have a trade advantage, which involves the reduced rate of tariff and increasing
import Quotas. There are some exceptions to the clause regarding situations where
19 Ibid (n18)

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higher levels of preference are allowed. Therefore, as part, this regulation Qatar can
claim that the ban imposed has been unfair in nature. On the other hand, there are other
sections of the GATT regulations that have to be taken into consideration in this case.
ii) Article XXI Security Exception
Article XXI that is security exception was invoked by The Saudi-led quartet to
justify the Blockade. The security exception claims that it is important to make sure that
each country has the freedom to make the judgment regarding the activities that are
harming their security. This article allows each country to make a decision regarding their
security under certain circumstances.
2 Chapter One: Most Favoured Nation Treatment
2.1 Most Favoured Nation Treatment (MFN)
The provisions of Article I of the GATT on the ‘Most-Favoured-Nation (MFN)
Treatment’ are considered among the most important principles in trade20. The WTO
Appellate Body (AB) ruled in an earlier case that ‘for more than fifty years, the obligation
to provide most-favored-nation treatment I of GATT 1994 has been both central and
essential to assuring the success of the global rules-based system for trade in goods’21. It
also stated that:
‘With respect to customs duties and charges of any kind imposed on or in
connection with importation or exportation or imposed on the international transfer
of payments for imports or exports, and with respect to the method of levying such
duties and charges, and with respect to all rules and formalities in connection with
importation and exportation, and with respect to all matters referred to in
paragraphs 2 and 4 of Article III,* any advantage, favour, privilege or immunity
granted by any contracting party to any product originating in or destined for any
20 Rodney D. Ludema, Georgetown University, Anna Maria Mayda, Georgetown University and CEPR, Do
Countries Free Ride on MFN?, 2008
21 Appellate Body Report, US-Section 211 Appropriations Act, Para 297,

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other country shall be accorded immediately and unconditionally to the like
product originating in or destined for the territories of all other contracting
parties22’.
The principle means that parties normally cannot discriminate in trade between each
other. In other words, it means ‘favor one, favor all’, so, if a Member grants a benefit to a
country (such as lower tariffs for a product), it is obliged to extend this benefit immediately
and unconditionally to all members of the WTO23. It is also considered as a foundation of
the Non-Discrimination principle that holds up the trading system; without it, the system
could not exist24. In terms of Canada’s autos25, the AB held that ‘the duty exemption was
inconsistent with the most-favored-nation treatment obligation under Art. I:1 on the
ground that Art. I:1 covers not only de jure but also de facto discrimination and that the
duty exemption at issue, in reality, was given only to the imports from a small number of
countries26’. Such a conclusion confirms the understanding of the purpose of the MFN
under the GATT whereby it prohibits any kind of discrimination between ‘like’ products
originating in, or destined for, different countries27.
Nevertheless, it has been argued that the MFN benefits riches developed countries rather
than poorer countries in terms of low average tariffs28. This was recognized in the First
World Conference on Trade and Development29, wherein the Secretary General’s Report
22 GATT art I, Analytical Index of the GATT, Page 36
23 MOST –FAVOURED –NATION CLAUSE IN THE LIGHT OF EC CASE C-335/05 RIZENI LETOVEHO PROVOZU
CR, S.P.V. BUNDESAM NT FUR FINANZEN (2017)
24 Ibid (n 15)
25 DS142: Canada — Certain Measures Affecting the Automotive Industry
26 The Measure at issue: Canada's import duty exemption for imports by certain manufacturers, in
conjunction with the Canadian Value Added (“CVA”) requirements and the production to sales ratio
requirements. Motor vehicle imports and imported motor vehicle parts and materials. More at
CANADA – AUTOS1 (DS139, 142)
27 Ibid (n22), p 36
28 H. Horn, P.C. Mavroidis, ‘Economic and Legal Aspects of the Most-Favored-Nation Clause’ (2001)17(2001)
European Journal of Political Economy 235
29 The United Nations Conference on Trade holds the conference and Development (UNCTAD), a permanent
organ of the United Nations (UN) General Assembly, established in 1964 to promote trade, investment, and

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noted that ‘However valid the MFN principle may be in regulating trade relations among
equals, it is not a suitable concept for a trade involving countries of vastly unequal
economic strength30’. However, this argument was challenged by less-developed
countries like Brazil and India by playing a core role in shaping the GATT’s Quantitative
Restrictions for Balance of Payments purposes. It started when the Indian representative
stated, ‘Equality of treatment is equitable only among equals. A weakling cannot carry the
burden of a giant31’.
Thus, despite the clarity of the principles (MFN and Non-Discrimination), it could be
sometimes challenging in practice in terms of interpretation of words such as;
‘advantage’, ‘like’ and ‘immediately and unconditionally’; for instance, when Spain
applied different tariff rates for ‘unroasted coffee32’, applying the ‘like product’ measure
created a debate on the interpretation of "like product" when by looking into it, it was
actually an issue of “end product”, which is not defined under Article 1 of GATT. The
panel concluded by stating ‘that the tariff regime as presently applied by Spain was
discriminatory vis-à-vis unroasted coffee originating in Brazil’33 and requested Spain to
take measures to be in line with Article 1:1 of GATT34. A complex issue has also been
recognized with the Non-Discrimination as an intricate principle, it was referred to it by a
WTO panel in that ‘” Discrimination” is a term to be avoided whenever more precise
standards are available, and when employed, it is a term to be interpreted with caution,
development in developing countries. Headquartered in Geneva, Switzerland, UNCTAD has approximately
190 members.
30 Rahma Abd Alla Bakhiet AbuAagla ‘New Developments in the Most-Favoured-Nation Clause with
Particular Reference to Trade’ (2004) 23 (1)
31 Amrita Narlikar, Fairness in International Trade Negotiations: Developing Countries in the GATT & WTO
(University of Cambridge nd) 14
32 SPAIN - Tariff Treatment of Unroasted Coffee, Report of the Panel adopted on 11 June 1981, GATT Doc
(L/5135 - 28S/102 1981) 8
33 Ibid 410
34 Ibid 12

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and with care to add no more precision than the concept contains35’. There is also an
interpretation issue, as the AB has recently interpreted the generic term ‘non-
discriminatory’ in case treating contracting parties differently or in preferentially way
accurse36.
The non-Discrimination principle could be also found in the National Treatment Clause
(NT), which could be found also under the GATT, GATS, and TRIPS. The essence of the
NT is that no Member State may opt for an exception to the opposition procedure to
prevent discrimination between imports and 'domestic products' or services.37
As presented, the MFN and the NT both share the same notion and objective of
‘prohibiting discrimination’ on the grounds of nationality, national origin or destination for
goods and services38, and they both play important role in liberating world trade.
However, the application of these principles may sometimes become a burden when they
intersect with the exceptions provided under the WTO agreements39. to the WTO
agreement under the GATT (1994) are (a) are the General Exception Article XX under
GATT that deals with parties adopting measures to protect public morals, human, animal
or planet in the sense of wellbeing or health40. (b) The Security Exception (Article XXI),
discussed in the next part.
2.2 Security Exceptions (XXI, GATT 1994)
Article XXI states that: ‘Nothing in this Agreement shall be construed
35 Panel Report, Canada-Patent Protection of Pharmaceutical Products, P 7.94, WT/DS114/R (March 17,
2000) (adopted Apr. 7, 2000) (referring to the term "discrimination" contained in Article 27.1 of the TRIPS).
36 Appellate Body Report, European Communities-Conditions for the Granting of Tariff Preferences to
Developing Countries, PP 143-147, WT/DS246/AB/R (Apr. 7, 2004) (adopted Apr. 20, 2004)
37 The Legitimate Regulatory Distinction In The TBT Agreement: Evolution, Criticism And Perspectives,
Juanita Fonseca Duffo, Sebastián Solarte, Alejandro Isaza de Zubiría, Michelle Visbal*, 189
38 Ibid 190
39 Ibid 47
40 Yenkong Hodu, ‘Relationship of GATT Article XX exceptions to other WTO agreements’ (2011) 80 (2)
Nordic Journal of International Law 219-234, page 221

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(a) to require any contracting party to furnish any information the disclosure of which it
considers contrary to its essential security interests; or
(b) To prevent any contracting party from taking any action which it considers
necessary for the protection of its essential security interests
(i) Relating to fissionable materials or the materials from which they are
derived;
(ii) Relating to the traffic in arms, ammunition, and implements of war and to
such traffic in other goods and materials as is carried on directly or indirectly
for the purpose of supplying a military establishment;
(iii) Taken in time of war or other emergencies in international relations; or
(c) to prevent any contracting party from taking any action in
pursuance of its obligations under the United Nations Charter for the
maintenance of international peace and security’41.
The security exception is the right to take necessary measures to protect the
essential interests of national security that may restrict trade in goods (GATT 1994). A
major confusion is associated with this Article regarding its definition and limits. Similar
exceptions are provided for in the GATS and the TRIPS Agreement42. Article XXI of
GATT allows the WTO members to breach their obligations for security reasons43. With
the recent political and economic changes, different dimensions have been related to
national security, such as cybersecurity and terrorism44. The predicament comes from
misusing or sometimes abusing the XXI when invoked; this was recognized in the early
stages of the GATT, described as creating a ‘very big loophole in the whole GATT
41 GATT. art 21
42 Exceptions to WTO Rules: General Exceptions, Security Exceptions, Regional Trade Agreements (RTAs),
Balance-of-Payments (BOPs) & Waivers, 20
43 Ibid 1277
44 Ibid 237

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Charter45’. Thus, Article XXI remains without any amendments since GATT 1974;
however, some modifications added in the GATS and TRIPS46. In 1987, Nicaragua
requested reviewing Article XXI in the Uruguay Round for further discussion of the
interpretation of the Article. In Nicaragua’s case, the United States invoked Article XXI
and argued that GATT counsel is not entitled to discuss the Security Exception. In
response, Nicaragua stated, ‘the position taken by the United States on the embargo
reveals a dual inconsistency as to the sphere of competence of the GATT and of the
United Nations, and inconsistency with respect to the unity and homogeneity of
international law’47. Several cases were presented under the GATT and the WTO to
challenge Article XXI. However, never ended up with a binding decision48.
The article main issue is associated with its definitions, which gives a wide range
of interpretations and misuses. Terms like ‘considers necessary’, ‘essential security
interests’, ‘time of war’ and ‘emergency in international relations’ are subject to different
narratives49. After September 11, 2001, a shift in defining ‘war’ was noted. The United
States50 undertook a broad expansion in using words like ‘terrorism’ and ‘war on
terrorism’. The legal vagueness of ‘war on terrorism’ would not merely have an impact on
the approach of the United States to armed battles via non- traditional policies51, but the
economic measures might be used to counter terrorist financing. This political
understanding was reflected in international laws and international relations as a gateway
to impose sanctions or economic restrictions by taking advantage of the ambiguity of
45 Roger P. Alford, ‘The Self-Judging WTO Security Exception’ (2011) Journal Articles 330, 698
46 Ji Yeong Yoo and Dukgeun Ahn, ‘Security Exceptions in the WTO System: Bridge or Bottle-Neck for Trade
and Security?’ (2016) 19 (2) Journal of International Economic Law 417-444, 417
47 Multilateral Trade Negotiations, The Uruguay Round, Group Of Negotiations On Goods (GATT) Negotiating
Group On GATT Articles, Communication From Nicaragua, MTN.GNG/NG7/W/39, 27 November 1987, 1,
48 Ibid (n46)
49 Ibid (n5)1278
50 Counterterrorism, including a ‘war’ against terrorists, has taken a primary place in U.S. foreign
policy; see the White House, Executive Office of the President, The National Security Strategy
of the United States of America (2002)
51 Thomas M. Franck, What Happens Now? The United Nations after Iraq, 97 AM. J. INT'L L. 607, 610-14
(2003)

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Article XXI in the GATT as a pretext52. An important element associated with Article XXI is
that the article is considered ‘Self-Judging’, which is subject to the member’s sole
discretion53. Sweden’s import restrictions54 on footwear qualified for invoking Article XXI.
Professor John H. Jackson noted that ‘This language is so broad, self-judging, and
ambiguous that it obviously can be abused. It has even been claimed that maintenance of
shoe production facilities qualifies for the exception because an army must have shoes!’55
Several debates have taken place between scholars regarding the ability of the
DSB to review the measures considered by the members invoking Article XXI56. The first
group of scholars supports member sovereignty in determining what is essential national
security, while the WTO panel exercises self-restraint and recommends alternative
dispute resolution methods57. The second group of scholars supports reviewing Article
XXI and creating certain criteria to evaluate the measures taken by the members58. From
both views, the formulation of general criteria is deemed useful to reduce the pressure in
dealing with the Article and members’ practices59. WTO jurisdiction over Article XXI is also
debatable, and scholars are divided into two groups. Arguments carried by that favouring
jurisdiction group suggest that the Article is structured to limit the reach of self-judging
language. That disfavouring jurisdiction group notes the discretionary ‘it considers’
language of the article and the self-defining element within60.
52 Eric J. Lobsinger, ‘Diminishing Borders in Trade and Terrorism: An Examination of Regional Applicability of
GATT Article XXI National Security Trade Sanctions’ (2006) 13(99) Ilsa Journal of International &
Comparative Law 1
53 Ibid (n45)
54 Sweden-Import Restrictions on Certain Footwear, GATT Doc. L4250 (1975)1
55 John H. Jackson,
The World Trading System: Law and Policy of International Economic Relations 230
(2ded., Mass. Inst. Tech. 1997)
56 Ibid (n5) 1278
57 Rostam J. Neuwirth and Alexandr Svetlicinii, ‘The Economic Sanctions over the Ukraine Conflict and
the WTO: ‘Catch-XXI’ and the Revival of the Debate on Security Exceptions’ (2015) 49 (5) Journal of
World Trade, 905
58 Ibid (n57) 772
59 Ibid (n57) 895
60 Ibid (n5) 1311

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Notwithstanding the ambiguity of Article XXI, scholars admit that the Article was
drafted in ambiguity to enable the WTO members to respond and take legal action
against any national security threats without breaching their obligations under the WTO
agreements61. However, the text relies (a) on the behaviour of the invoking party who
should act in good faith62 and (b) real security interest63 where the member should
present
a prima facie case of real threats based on real national security concerns64.
The worries regarding the maintenance of the elasticity of the term ‘National
Security’ assist in explaining the reason that the GATT drafters intentionally kept the
GATT Article XXI as an unclear tool. It also clarifies the reason why members of the WTO
held autonomous authority. Though the nations have submitted representatives to work
with WTO and benefit from its welfares, it is still important to make decisions regarding
whether the GATT Article XXI is justifiable. In addition, any sovereignty waiver must be
clear, specifically providing its history. Essentially, countries are likely to offer their
significant national security queries whenever requested by the WTO panel. this is
because the panel has its individual correspondences that the member countries ought to
submit when requested.
3 Chapter Two: Qatar and the Blockade
3.1 Background
Qatar, Regional and International Trade System
Qatar is one of the most dynamic Arab countries. With its gas reserves and great
investments around the globe, Qatar is considered one of the richest countries in the
61 Ibid 235
62 Sophocles Kitharidis,
The Unknown Territories of the National Security Exception: The Importance and
Interpretation of Art XXI of the GATT, 93
63 One of the participants in the drafting of the original GATT Charter recognized this tension: “[W]e
thought it well to draft provisions which would take care of real security interests and, at the same
time, so far as we could, to limit the exception so as to prevent the adoption of protection for
maintaining industries under every conceivable circumstance”. Lindsay (n5) 1311, 1
64 Ibid (n62) 87

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region with the highest GDP per capita in the world65. In the Gulf Region, Qatar ‘
is a
member of The Cooperation Council for the Arab States of the Gulf’ (GCC) since the
establishment of the council in 198166. One aspect of such cooperation is economic
cooperation, where all GCC members signed an Economic Agreement between all GCC
States on 31 December 2001 in Muscat, Oman. The aim of this agreement is to ease
trade between the GCC countries67. On a global scale, Qatar joined the GATT on the 7th
of April 1994 and the WTO on the 13th of January 199668. On November 2010, Qatar held
the ‘
Doha Round which is the latest trade negotiations among the WTO membership’. As
a result, parties announced the Doha Ministerial Declaration, reframing the importance of
continued liberation of the services sector in developing countries thereby, encouraging
developed countries to open their markets for the free labour movement and increase the
flow of technology transitions69. Since then, Qatar has been heavily involved in the WTO
activities and multiple negations on various subjects, as in July 2018, when, for a
consultation on trade in goods, members of the WTO raised concerns over United States
Section 232 investigation on automobiles and automotive parts70.
Qatar Blockade
On the 25th of May 2017, the Qatar News Agency (QNA), and Qatari official news
website and its social media accounts were hacked and used to published fake
statements attributed to the ‘
Emir of Qatar, Sheikh Tamim bin Hamad Al Thani; this led to
65 Prepared by ACW Research Team, QATAR’S MILITARY RESPONSE TO A NATIONAL EMERGENCY, The GCC
Crisis at One Year,2018, page 74
66 The Gulf Cooperation Council The Cooperation Council for the Arab States of the Gulf – GC, 2017. Gcc-
Sg.Org. Accessed September 11, 2018. http://www.gcc-sg.org/en-us/Pages/default.aspx.
67 "Regional Economic Integration Treaties: Economic Agreement Between The GCC States". 2018. Wipo.Int.
Accessed September 11, 2018. http://www.wipo.int/wipolex/en/other_treaties/text.jsp?file_id=227910.
68 The GCC Countries and the World Trade Organization (WTO), Sabah Naaoush, 2009, Page
15,<http://www.ecssr.com/ECSSR/print/pb.jsp?lang=en&publicationId=/Publications/Books/Arabic/
Publications_0018.xml>
69 "WTO | Doha 4Th Ministerial - Ministerial Declaration" (Wto.Org 2018)
70 "WTO | 2018 News Items - Members Raise Concerns Over US Section 232 Investigation On
Automobiles And Automotive Parts" (WTO.Org 2018)

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investigations to which the FBI contributed. According to Qatar's Ministry of Interior, the
cyber-attack used innovative technology71; however, the results confirm that ‘
The
investigation team was able to identify the sources through which the cyber-attack was
carried out and legal action shall take place’. Days later, on the 5th of June 2017, Saudi
Arabia, UAE, Bahrain, and Egypt decided to cut diplomatic ties with Qatar and block their
naval, aerial and only land borders, with Saudi Arabia72. This has led to ceasing all
imports and exports to and from Qatar through original channels. All types of goods and
services, including food and medicine, were suspended by the Saudi-led quartet, as well
as ‘
trade-related aspects of intellectual property rights’, such as illegally rebroadcasting
the World Cup 2018 from BeIN Sports TV channel which belongs to Qatar and has
exclusive rights to broadcast the World Cup in the Middle East73. Moreover, human rights
were violated by the blockade whereby Qatari citizens were asked to leave Saudi Arabia,
UAE, Bahrain, and Egypt within fourteen days, and, vice versa, these countries asked
their civilians to leave Qatar within the same period and prohibited them from traveling to
Qatar74. On the 23rd of June 2017, the four countries raised a list of 13 demands that
Qatar had to comply with within ten days to lift the blockade. The 13 demands revolve
around Qatar’s allegedly funding terrorism and supporting ‘terrorist organizations’ and
‘
that Qatar should “align itself with the other Gulf and Arab countries militarily, politically,
socially and economically75”.Other demands like; cutting the diplomatic ties with Iran,
shutting down Al Jazeera TV Chanel, terminating all collaborations with the Turkish
Military in Qatar and that Qatar’s compliance with the demands would be audited on a
quarterly basis by the Saudi-led quartet upon consent to the demands. This was
71 US FBI helps Qatar solve Cyber Attack incident of Qatar News Agency!
72 Imad K. Harb, MEASURES OF STALEMATE IN THE GCC CRISIS (The GCC Crisis at One Year, Arab Center
Washington DC nd) 13
73 "The World Cup Is Being 'Illegally' Broadcast By A Major TV Station, Says FIFA" (The Independent 2018)
74 Alexandra Hofer and Luca Ferro, ‘Sanctioning Qatar: Coercive Interference in the State’s Domaine
Réservé?’ (EJIL: Talk! 2017)
75 Patrick Wintour ‘Qatar Given 10 Days To Meet 13 Sweeping Demands By Saudi Arabia' (The Guardian
2017)

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considered by Qatar as a blatant intervention in Qatar’s sovereignty as well as its internal
and foreign affairs as stated by Qatar’s Foreign Affairs Minister: ‘
the illegal blockade has
nothing to do with combating terrorism, it is about limiting Qatar’s sovereignty, and
outsourcing our foreign policy’. Therefore, Qatar was open to fair negations to solve the
situation, but without prejudice to the sovereignty of the State. As reported in the
Minister’s speech, ‘
Anything not related to [the affairs of the Gulf Cooperation Council] is
not subject to negotiation. Al Jazeera is Qatar’s affairs, Qatari foreign policy on regional
issues is Qatar’s affairs. And we are not going to negotiate on our own affairs’76. Kuwait,
as a neutral party, took the lead to bring Qatar, Saudi Arabia, UAE, and Bahrain to sit at
the negotiation table to solve the issue, but the GCC blockading countries refused to
negotiate or to lift the blockade. Moreover, they reduced their representation of the 38th
round of the Supreme Council of Gulf Cooperation Council held at Kuwait in the last
minute. Accordingly, Qatar blockade was not discussed in the round and the agenda was
shortened by half77. Despite multiple diplomatic attempts from different parties globally,
the blockade is still in force78.
As a result of the blockade, Qatar had to find alternatives to maintain the same
level of living and same lifestyle for its citizens and residents, finding alternative suppliers
and service providers79. Several legal actions were taken to protect the rights and
obligations that were affected by the blockade. On the 31st of July 2017, Qatar requested
a consultation from the WTO against the imposed economic restrictions imposed by the
GCC blockading countries on trade goods, services, and aspects of intellectual property
rights. By this Qatar would be the first GCC country to recourse the Dispute Settlement
76 Ibid (n74)
77 "Emir Participates In Opening Session Of 38Th GCC Supreme Council Summit" (Gulf-Times 2017)
78 Marwan Kabalan, KUWAIT'S GCC MEDIATION: INCENTIVES AND REASONS FOR FAILURE (The GCC Crisis at
One Year, Arab Center Washington DC nd) 25
79 Prepared by ACW Research Team, QATAR’S MILITARY RESPONSE TO A NATIONAL EMERGENCY, The GCC
Crisis at One Year,2018, page 74

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Body (DSB) of the WTO
. The records show that since the establishment of the WTO until
2008, DSB reviewed 378 complaints and none was from or against an Arab/GCC
country80. In June 2018, Qatar took the UAE to the UN for major human rights
infringements and discrimination against Qatar .
3.2 Analysis of the Three Consultation Requests by Qatar to the Dispute Settlements
Body under the Dispute Settlement Understanding (DSU)
On 31 July 2017 the delegation of Qatar communicated with the delegation of UAE and
the Chairperson of the Dispute Settlement requesting for Consultation with UAE
regarding the economic isolations imposed on Qatar by UAE in respect of goods,
services and trade-related aspects of intellectual property rights81.
The request was made pursuant to ’
Articles I:1, V:2, X:1, X:2, XI:1, and XIII:1 of the
GATT 1994; Articles II:1, III:1, III:2, III:3, and XVI of the GATS; and Articles 3 and 4 of the
TRIPS Agreement’ with an exclusion to the ‘
first sentence of article 4.11 of DSU’82.
According to the request, the measures revolved around three aspects;
1. Measures Related to Goods:
Where the ban forbids and/or restricts ‘the import, export, sale, purchase,
license, transfer, receipt and shipment of goods originating in, transiting through,
towards or from, or with the destination of Qatar’,83. the actions taken by UAE
including but not limited to: (a); closing the Maritime border and airspace closure
by the UAE. (b); 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, (c); Prohibition on the landing of Qatari aircraft at airports in the
UAE;(d); Prohibition on the discharge in UAE ports and airports of any goods
80 The GCC Countries and the World Trade Organization (WTO) (Sabah Naaoush 2009)
81 G/L/1180 ; IP/D/35 ; S/L/415 ; WT/DS526/1, United Arab Emirates - Measures Relating to Trade in Goods
and Services, and Trade-Related Aspects of Intellectual Property Rights - Request for consultations by Qatar
82 Ibid 532
83 "Ibid 1140

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transported from Qatar; (e); Prohibition on the loading at UAE ports and airports
of any goods destined for Qatar84.
(A) The actions considered by Qatar as a major violation to Article I, GATT 1994
and involves blatant violation to the Non-discrimination principle, where UAE
failed to accord “immediately and unconditionally to like product originating in or
destined for or to or from Qatar85. In this regard, a similar concern was noted in
the United States-Brazil dispute, the panel noted that: ‘this provision clearly
prohibits a contracting party from according an advantage to a product
originating in another country while denying the same advantage to a like
product originating in the territories of other contracting parties’86.
(B) Article V: 2 in terms of freedom of transit where it states: ‘There shall be
freedom of transit through the territory of each contracting party, via the routes most
convenient for international transit, for traffic in transit to or from the territory of other
contracting parties. No distinction shall be made which is based on the flag of vessels,
the place of origin, departure, entry, exit o destination, or on any circumstances relating to
the ownership of goods, of vessels or of other means of transport87'. By the blockade UAE
imposed on Qatar, the most convenient trade routes were blocked on Qatar. The transfer
of transit between the UAE is the most convenient route for Qatar (c) ‘
X:1 and X:2
regarding Publication and Administration of Trade Regulations’, the measures were taken
by UAE affect the trade of goods directly by enforcing them directly without prior
publication. Article X:1 specifically states that laws, regulations, judgments and general
administrative decisions applicable to a Party concerning the application of customs
84 Ibid 2209
85 Ibid 435
86 United States - Denial Of Most-Favoured-Nation Treatment As To Non-Rubber Footwear From Brazil,
DS18, adopted on 19 June 1992, 39S/128,151,para.6.11
87 GATT Art. V, para2

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duties, interest, taxes or payments or other claims, restrictions or exclusions for the
purpose of import or export or servicing of debt, or of the dissemination or pricing of
effects. Sales, distribution, removal, insurance, warehousing, inspection, display,
processing, merger or other purposes will be promptly disclosed to authorities and
traders.88 UAE did not publish any written or unwritten statements prior to the actions
taken. The same applies to Article X:2: ‘Prepayments for customs or other payments for
goods imported in accordance with established and concerted practices or new
requirements, imports, restrictions, exclusions or relocations are not published or
disclosed89’.
The measures carry on identifying breaches under the regarding General
Elimination of Quantitative Restrictions and measures related to Nullification or
impairment90.
2. Measures Related to Services
The encroachment of obligations of UAE under the GATS agreement was listed as
follows:
• Banning Qatari persons or vessels and vehicles from crossing maritime
borders with the UAE, or entering the UAE via airspace, to supply services, as
well as persons from the UAE crossing maritime borders with Qatar, or entering
Qatar via airspace, to consume services;
• Banning (i) all ships owned by Qatar, Qatari individuals or Qatari companies;
and (ii) all ships bearing the Qatari flag, from entering UAE ports;
88 GATT. Art XI.
89 Ibid 701
90 Ibid 1525

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• Banning aircraft registered in Qatar from operating flights to and from the UAE,
including prohibiting the landing of Qatari aircraft at airports in the UAE; and,
• Banning Qatari service suppliers, such as Qatar Postal Services Company,
from providing services in relation to mail items that are originating from or
designated to Qatar,’
With reference to the article (a) Article II:1 about Most-Favoured-Nation Treatment
UAE.
The UAE service suppliers have failed to provide immediate and unconditional
supply to Qatar in different sectors of supply, affecting service supply systems
which depend on Qatar and other countries91.
(b) In accordance with Article XVI, Market Access, UAE restricted market access
for Qatari service suppliers and service providers. (c) The request highlighted
Article XXIII on Dispute Settlement and Enforcement paragraph 1 and 3 for non-
compliance and violation of obligations.
3. Measures related to Trade-Related Aspects of Intellection Property Right
As mentioned in the request, violations of obligations under TRIPS agreements
were carried out by UAE by:
‘• Making it impossible for those forms who hold trademarks and copyright
licenses. For those people who hold Qatari nationals and also have property in
Qatar to honour their obligations under licensing agreements; and,
• The copyright process is impossible for Qatar trademarks and for those forms
which have intellectual licensees and also for those who have property rights in
the premises of UAE.
91 Ibid 326

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Under TRIPS, Article 3: National Treatment and Article 4: Most-Favoured-Nation
Treatment, UAE failed to allow holders of copyright, trademark and other forms of
Intellection Property (IP) Qatar nationals to honor their obligations in the UAE or to use
and practice their right in the UAE. The UAE failed to treat Qatar citizens as nationals
with respect to the protection of IP rights.92
More violations through the blockade were found, and, to prevent dismissal of any
additional violations, the request mentioned that ‘Qatar maintains the right to raise other
issues during the consultation process and in all future issues’93.
On the 10 of August 2017, the Chairman of the DSB sent the UAE communications
stating that it would not engage in consultations with Qatar. Therefore, Qatar took the
next step: ‘
pursuant to Article 4.7 and Article 6 of the DSU, Article XXIII of the GATT
1994, Article XXIII of the GATS and Article 64.1 of the TRIPS Agreement, with the
standard terms of reference provided by Article 7.1 of the DSU’ 94.
 Review the minutes of the DSU meetings
According to Article 4.7 from the Understanding on Rules and Procedures
Governing the Settlement of Disputes (DSU) 95 if the consultation fails to settle the dispute
within 60 days, ‘the requested party may ask to establish a panel, that created from a
group of professionals. the complainant may request a period of 60 days If the consulates
agree that the dispute was not resolved96 With this understanding of the article, Qatar
92 Ibid 81
93 Ibid
94 United Arab Emirates - Measures Relating to Trade in Goods and Services, and Trade-Related Aspects of
Intellectual Property Rights - Request for the establishment of a panel by Qatar, WT/DS526/2
95 Understanding the Rules and Procedures Governing the Settlement of Disputes (1869) 401 (33) I.L.M.
1226
96 World Trade Organization, The WTO Agreements, the Marrakesh Agreement Establishing the World
Trade Organization and its Annexes (Cambridge University Press 2017) 438 Article states: “7. If the
consultations fail to settle a dispute within 60 days after the date of receipt of the request for consultations,
the complaining party may request the establishment of a panel. The complaining party may request a
panel during the 60-day period if the consulting parties jointly consider that consultations have failed to
settle the dispute.”

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requested establishing a panel97. The panel was established on 22 November 2017 and
composed on 3 September 2018 led by the Chairman, Mr. Virachai Plasai98,. On 23
October 2017 panel, the Chairman agreed to revert to Qatar disputes measures. Qatar's
representative stated by stating that the efforts to find reconciliation to resolve the
disputes have failed and the economic restrictions are still in place. He focused on the
WTO cornerstone principles, the MFN and Non-discrimination treatments affirming that
the actions taken by Qatar nearest trading partners99 in respect to good and services and
trade aspects of intellectual property violate the WTO rules. He highlighted that the
measures were targeting Qatar only denying all it’s right under the WTO membership100.
The UAE’s representative responded that this dispute is not under the WTO jurisdictions,
hence ‘the establishment of the panel to adjudicate a matter fell outside the purview of
the WTO and its dispute settlement system101’. Continuing that UAE took the measures
that were necessary to protect its essential national security interests, thus, for this
invoking Article XXI cannot be considered as a violation of the WTO obligations.
Furthermore, he stated that the measures were taken in response to Qatar's actions in
refusing to cease it supporting and funding terrorism and that Qatar failed to show
compliance with its international counter-terrorism obligations. He concluded his
statement by restating that the WTO had no authority to second-guess UAE action to
protect its national security102.
In the Panel, Saudi Arabia and Bahrain agreed with the UAE statement and
reconfirmed their objection to the panel establishment103. The Canadian representative
noted that the political solution remains possible if there was a goodwill between the
97 Ibid (n84)
98 WTO, MINUTES OF MEETING, WT/DSB/M/404, page 6, para 3
99 See WT/DS528/1, G/L/1182, S/L/417, IP/D/37, AND WT/DS527/1, GL/1181, S/L/416, IP/D/36
100 WTO, MINUTES OF MEETING, WT/DSB/M/404, page 6, para 3.2
101 Ibid, para 3.3
102 Ibid
103 Ibid, para 3.4, 3.5

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parties and that Canada supports the suggestion to seek the assistance of the Director-
General before proceeding to the next phase of this dispute104. The Korean representative
supported finding a political resolution to solve this matter and encouraged the parties to
make efforts in good faith, highlighting that this matter has a significant impact on trade
and it’s the obligation of the WTO members to ensure the flow of the world trade and
minimize any negative influence on the trade system105. In the same context, the United
States representative agreed to the UAE’s statement regarding the sovereignty of the
countries to decide its essential national security by Stating ’If Article XXI was invoked,
there were no findings by the panel that could assist the DSB in making the
recommendations provided for in DSU Article 19.1.2 This was because the DSB could
make no finding of WTO-inconsistency or recommendation to a Member to bring its
measure into conformity with WTO obligations106' in the end, the United State
representative agreed to the Canadian suggestion in seeking assistance from the
Director-General through his good offices and add or from other person or WTO member.
Adding in case of the establishment of the Panel “it should consult with the parties “to
develop a mutually satisfactory solution”107’
by the end of the panel, Qatar’s representative denied the allegation raised by the
UAE’s representative and confirmed that Qatar did not dispute the country right to takebona fade measures on the grounds of national security concerns, however ‘this defense
could not be self-regulating as that would threaten the integrity of the entire rules-based
system108. The UAE representative repeated his statements109. Therefore, the DSB took a
104 Ibid, para 3.7
105 Ibid, para 3.8
106 Ibid, para 3.10
107 Ibid
108 Ibid, para 3.12
109 Ibid, para 3.12, 3.13

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note and agreed to establish a panel in accordance with Article 6110 of the DSU111. The
representatives of Afghanistan, Australia, Kingdom of Bahrain, Canada, China, Egypt, the
European Union, Guatemala, Honduras, Japan, Kazakhstan, Korea, Norway, the
Philippines, the Russian Federation, the Kingdom of Saudi Arabia, Singapore, Chinese
Taipei, Ukraine, the United States and Yemen reserved their third-party rights to
participate in the Panel's proceedings112.
4 Chapter Three: Illegality of the Blockade Based on WTO Case Laws
4.1 Review and analysis of cases
While the economic sanction is mostly an induvial call by the WTO members, the
number of sanctions has raised over the years and sanctions became a tool of
coercion to the target country113. A number of WTO members have quoted GATT
1947 and GATT 1994 Article XXI, either specifically or unstated, both beforehand and
after the formation of the WTO. The first case that was settled under GATT 1974 was
in 1949 the case of United States–Czechoslovakia114, this dispute was a precedent
the results from the discussions concluded: (a); “every contracting party should be
cautious not to take any step which might have the effect of undermining the General
Agreement"115, (b); "contracting parties should be informed to the fullest extent
possible of trade measures taken under Article XXI116”. The second case was United
States–Nicaragua (1985)117, when the United States imposed a full trade embargo
110 DSU Article 6: “If the complaining party so requests, a panel shall be established at the latest at the DSB
meeting following that at which the request first appears as an item on the DSB's agenda, unless at that
meeting the DSB decides by consensus not to establish a panel”
111 Ibid,
112 Ibid, para 3.15
113 Maarten Smeets, ‘Can economic sanctions be effective?’ (World Trade Organization 2018) 3
114 Aerial Incident of March 10th, 1953, U.S. v. Czechoslovakia, Order, 1956 I.C.J. 6 (Mar. 14). United States–
Czechoslovakia (1949): Czechoslovakia sought GATT action on a U.S. export control licensing scheme, which
prevented the export of certain goods to Czechoslovakia. The Czech government brought its complaint
under GATT Articles I and XXI, but its claim was ultimately rejected by the GATT panel.
115 GATT/CP.3/SR.22, Corr. 1
116 GATT ANALYTICAL INDEX, GATT/CP.3/38, p. 9
117 Ibid C/M/188,pp.2-16: C/M/191, pp41-46

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against Nicaragua. United Stated invoked Article XXI and stated ‘the panel cannot
examine or judge the validity or motivation for invocation of Article XXI’118. No
judgment was made on the case119 and the panel noted that; “it could find the United
States neither to be complying with its obligations under the General Agreement nor
to be failing to carry out its obligations under that Agreement120”. The last case is the
dispute of the European Communities–Yugoslavia (1992)121, the European
Community and its members (EC) adopted full economic sanction against Yugoslavia
and deprived them of the benefits granted by the GATT agreement. Thus, EC invoked
Article XXI by stating:” In our view, these measures, taken for purely political reasons,
are not consistent with the General Agreement122”. The panel was established to
examine the measures taken by the EC according to Yugoslavia request but was
ceased due to the political situation in Yugoslavia123. It could be noted from the cases
that the GATT Council did not reject the disputes based on invoking Article XXI. the
other two cases under GATT 1947 is Ghana -Portugal 1961124 where Ghana imposed
a boycott of goods on Portugal on the basis of essential security interest125. Ghana
justified its action and described Portugal action as “might be threatened by potential
as well as an actual danger’ 126. However, In the case, Ghana did not invoke Article
XXI in the end but relied on Article XXXV127. The second case is the European
118 Ibid, C/M196 at p.7
119 United States lift the embargo against Nicaragua several years after the populist Sandinista National
Liberation Front (Frente Sandinista de Liberación or FSLN) took control of the government.
120 Ibid (n106) L/6053, dated 13 October 1986, paras 5.1-5-3
121 EEC - TRADE MEASURES TAKEN FOR NON-ECONOMIC REASONS, GATT, DS27/2, 10 February 1992
122 Ibid
123 Marjorie Florestal, Terror on the High Seas: The Trade and Development Implications of U.S. National
Security Measures (Brook. L. Rev. 2007) 72
124 MTN.GNG/NG7/W/16 Ghana imposed a total ban on trade with Portugal at the latter’s accession to the
GATT claiming Portugal’s support of the war in Angola constituted a potential threat to the peace of the
African continent. Any action which might pressure the Portuguese Government into lessening this danger
was justified in the essential security interest of Ghana.
125 SR.19/12, p. 196
126 Ibid
127 Shahrzad Fazeli, Restrictions on Trade for Security Reasons, A Legal Analysis of the Scope of Article XXI of
the GATT in light of the Ukraine Crisis and the EU Sanctions on the Export of Dual-Use Goods To Russia

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Community–Argentina (1982)128 Argentina reached the GATT council for import
suspension imposed by the EEC, Australia, and Canada. Argentina claimed that the
measures taken against it were considered to be a violation of the obligations under
the GATT129. This suspension was posted on Argentina's military intervention in the
Falkland/Malvinas Islands. Parties invoked Article XXI to justify the actions taken
against Argentina and denied the jurisprudence of the GATT Council130. At the end of
the discussions, Argentina noted: ‘that in order to justify restrictive measures a
contracting party invoking XXI would especially be required to state reasons for
national security...there were no trade restrictions which could be applied without
being notified, discussed and justified131". Eventually, the GATT Contracting Parties
agreed to issue an interpretation of Article XXI, which provided in part that “the
contracting parties undertake, individually and jointly. to abstain from taking restrictive
trade measures, for reasons of a non-economic character, not consistent with the
General Agreement.132”. Those cases were brought under the GATT 1947, and they
demonstrate the ambiguity and how the nature of Article XXI is controversial where
only one case was adopted in the GATT which is US-imports of sugar from
Nicaragua133. Cases like the Arab League Boycott against Israel 1970, the Boycott
‘not contravene GATT obligations because it "was considered a political decision and
not trade-related”134' also a case like Sweden – Import quota system for footwear have
no formal complaint in the DSU thus article XXI was invoked as a defence135. Parties
(Uppsala Universitet 2015)
128 TRADE RESTRICTIONS AFFECTING ARGENTINA APPLIED FOR NON-ECONOMIC REASONS (L/5317 1982)
129 Ibid
130 Ibid (n117) page 28
131 C/M/157, p, 12;C/m/159, pp 14-15
132 Ibid (n113)
133 Ji Yeong Yoo and Dukgeun Ahn, ‘Security Exceptions in the WTO System: Bridge or Bottle-Neck for Trade
and Security?’ (2016) 19 (2) Journal of International Economic Law 417-444, page 430
134 Kontorovich, Eugene (2003) "The Arab League Boycott and WTO Accession: Can Foreign Policy Excuse
Discriminatory Sanctions?," Chicago Journal of International Law: Vol. 4: No. 2, Article 5., page 295
135 Ibid (n123)

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in the GATT Council rapidly challenged the legality of the Swedish measure and its
validation based on national security136. Recognizing international non-approval,
Sweden rapidly provided an offer to keep the discussion, and voluntary withdrawing
the measure in two years137. In the case Taiwan against China, an agreement
reached by parties not to invoke Article XXI.A provisional contract between Nicaragua
and Colombia to solve the problems prior to the International Court of Justice (ICJ).
Lastly; the dispute resolution between the EU and the United States on the “Helms-
Burton Act”. These circumstances demonstrate the way that the members of WTO
might utilize the present elasticity of the GATT Article XXI, together with diplomatic
resolutions, to settle the disputes of the GATT Article XXI138. all of these previous
examples of Sweden, Nicaragua and Colombia, Taiwan and China and EU and the
United States demonstrates the significance of political pressure under the “GATT
1947” regulations of resolving the dispute. Under these regulations, any member is
able to obstruct the taking up of the panel report. The WTO tightened the system of
resolving the dispute by applying a regulation of "reverse consensus" while adopting
the Appellate Body and panel reports139.
Under the WTO only three disputes related to Article XXI invocation as a defense and
all were settled in the consultation stage140. The first case is the United States and
EC, where the United States applied Sanction over Cuba141. The irony was not that
136 Bechky, Perry S. "Sanctions and the Blurred Boundaries of International Economic Law."
Mo. L. Rev. 83
(2018): 1.
137 Alford, Roger P. "The self-judging WTO security exception."
Utah L. Rev. (2011) 697.
138 Ibid (n10), page 1303
139 Lanye, Zhu. "The Effects to the WTO Dispute Settlement Panel and Appellate Body Reports: Is the
Dispute Settlement Body Resolving Specific Disputes Only or Making Precedent at the Same Time (2003) 17
"
Temp. Int'l & Comp. LJ 221.
140 Ibid (n123). page 434
141 The European Union did raise a claim against the United States' Cuban Liberty and Democratic Solidarity
Act of 1996, 22 U.S.C 6021-6091 (better known as the Helms-Burton Act), which penalized foreign
companies "trafficking" in property formerly owned by U.S. citizens that had been expropriated by the
Cuban government during the revolution. Given the sensitive nature of U.S.-Cuban relations in the WTO,
the United States has refused all dealings with the communist government. Should the matter have
proceeded to dispute settlement, the United States undoubtedly would have invoked Article XXI. The

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the dispute was not resolved under the DSU, but that the panel under WTO could not
explain the ambiguity of Article XXI142. The resolution of this dispute presents the
importance of the diplomatic pressure and the possibilities of reaching a solution that
satisfies all parties143. The second case is United States restrictions against China.
There are no official records of accusations by China yet, however, if China raised the
claim in front of the DSB, the United States will not be able to invoke Article XXI due
to the lack of justification and the good faith aspect of the dispute144.
The last one is the economic sanctions over Ukraine imposed by the Russia
Federation (RF) since 2013, where the disputes involve The European Union, RF and
the United States, the WTO members and Permanent Representatives of the United
Nations Security Council, however, A major issue in the adoption of the GATT system
to the WTO, that the WTO is still outside the UN system145. The countries applied
‘unilateral restrictive measures (including economic and trade restrictions) by the EU
and United States against RF, followed by the latter’s response in the form of import
restrictions on the United States and EU products146’. Hence, no further actions
initiated before the WTO147.
Meanwhile, Qatar dispute would be added to the three cases demonstrated above but
with the actual invocation of Article XXI by Saudi Arabia, UAE and Bahrain. Due to the
infringements to the three major WTO agreement (GATT, GATS, and TRIPS) and the
actual invocation of Article XXI, it is time to address this issue and request to
reviewing Article XXI under the WTO related bodies.
parties ultimately reached a negotiated solution without resort to the WTO's formal dispute mechanism.
Resolution on the Negotiations Between the Commission and the U.S. Administration on the Helms-Burton
Act, June 10, 1997, 1997 OJ (C 304) 116.
142 Ibid (n130)
143, Peter Lindsay, ‘The ambiguity of GATT Article XXI: subtle success or rampant failure?’ (2003) 52 Duke
Law Journal 1307
144 Ibid (n133)
145 Ibid
146 Ibid 894
147 Ibid 895

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4.2 Justification
United Arab Emirates, Saudi Arabia, and Bahrain have relied on Article XXI to
legitimize the economic restrictions on Qatar in respect of goods, services and trade
aspects of intellectual property in Qatar. Nevertheless, according to WTO
agreements, it can be extrapolated that the blockade is illegal in many aspects. First,
the countries used the exception to divert from the original obligations under the WTO
agreements. Second, the three countries did not notify Qatar before taking the
actions, where the blockade was imposed on every and each level of trade including
goods, services, and Intellectual property aspects. No justification was given by the
GCC blockading countries to the list of thirteen demands and no evidence was
submitted to support the allegations of the terrorism funding. The GCC blockading
countries showed nothing related directly to ‘National Security’ aspect. Many
contradictions can be highlighted in the list of demands. For example, UAE is Iran's
second-biggest export destination after China148. Therefore, Under the principle of
Non-discrimination, ‘it is unclear why the UAE's concerns about the support of
terrorism, ties with Iran and military cooperation with Turkey would apply exclusively
to Qatar'149. Moreover, Saudi Arabia is disturbed by Qatar ties to Hizbullah, Hamas,
and the Muslim Brotherhood given that Saudi Arabia classifies them as terrorist
groups, but at the same fails to justify its own ties with some ‘armed Syrian militant
groups closely linked to al-Qa‛ida and ISIS’150.
148 Upward Trend in Iran-UAE Trade Transactions, Economy Business And Markets, May 2017,
149 Ibid (n18)
150 Miroslav Zafirov (2017) The Qatar Crisis—Why the Blockade Failed, Israel Journal of Foreign Affairs, 11:2,
191-201, DOI: 10.1080/23739770.2017.1382072 To link to this article:
https://doi.org/10.1080/23739770.2017.1382072

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With regard to the good faith principle, the practice entails that ‘’every State has to
exercise the obligation incurred by treaty
bona fide and is urged thereto by the
ordinary sanctions of international law'151. It could be almost assured that this full-
scale blockade is based on hidden political agenda and purpose, rather than just
economic reasons. This can be sensed from the list of the 13 demands and from
Sheikh Sabah Al Ahmad Al Sabah, the Emir of Kuwait where he said at his joint press
conference with the US President Donald Trump statement: "What is important is that
we have stopped any military action"152. Nevertheless, the UAE ambassador stated
that: ‘further sanctions would be considered if Qatar would refuse to comply’153.
Clearly, the Saudi led quarter have adhered to this principle and the ‘allocation of the
burden of proof would be controversial'154, especially with the wide range of
statements been made by them since the blockade started in 2017.
Although there is no guarantee to the level of satisfaction which will result from the
procedures, yet, one of the possible scenarios suggests that with the involvement of
diplomacy the GCC crises will come to an end, by taking the Swedish case as an
example, where Sweden quickly offered to hold consultations and eventually withdraw
the measure within two years after the involvement of diplomacy and ‘[with] sensing
international disproval 155. Chances of remedies in the event of moving forward with
the cases may be considered in the case that the respondent did not comply at the
end of the PRT. Negotiations should take place between the complainant and the
non-compliance party even by mutually satisfactory compensation. The case of USA’s
151 ANDREW D MITCHELL, GOOD FAITH IN WTO DISPUTE SETTLEMENT, Melbourne Journal of International
Law, Vol 7, 2006
152 War 'stopped' between Qatar, blockading Arab nations, 2017,
<https://www.aljazeera.com/news/2017/09/war-stopped-qatar-blockading-arab-nations-
170908012658804.html>
153 Ibid (n56))
154 Ibid (n18)
155 Ibid (n5) 1303

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violation of TRIPS agreement demonstrates an agreement Lump-sum payment156.
Generally, ‘the WTO provides remedies, including compensation and suspension of
concessions, equal to the injury caused by the Member State's failure to comply with
the adverse decision’157.
The extent to which such exceptions are self- judging is an open query. As stated in one
of the interpretations in an article, a Member State has the right to make the decision for
itself whether an action is essential to its interests in security and is associated with one
of the numbered situations. One more interpretation would identify the right of a Member
State to decide for itself whether a "security exception" can be implemented but would
levy a standard of good faith that is dependent on judicial evaluation. The third
interpretation states that a Member State is able to make the decision for itself whether
“it
considers" and action to be compulsory to protect its vital interest to security, however,
the counted circumstances are dependent on judicial evaluation. Certain methods move
beyond still and oppose that the security exception has both subjective and objective
components. Upon this statement, whether an action is compulsory for protecting vital
interests of security is a query of self-judging, but other Article XXI provisions are
dependent on an aim review standard158.
4. Summary
As mentioned herein, the provisions of Article I of the GATT on the ‘Most-Favoured-
Nation (MFN) Treatment’ are considered among the most important principles in trade.
On the other hand, Appellate Body (AB) (within the structure of WTO) ruled in an earlier
case that ‘for more than fifty years, the obligation to provide most-favored-nation
treatment I of GATT 1994 has been both central and essential to assuring the success of
156 World Trade Organization, A Handbook on the WTO Dispute Settlement System (Cambridge University
Press, second edition, 2017) 139
157 Ibid (n45) 698
158 Bourbeau, Philippe, ed.
Security: dialogue across disciplines (Cambridge University Press 2015)

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the global rules-based system for trade in goods. The MNF as regarded by WTO is a
principle that ensures that parties are not discriminated in trade when working with one
another. Such a case also means that all members are favoured. Otherwise, if a Member
grants benefit to a country, it is obliged to extend this benefit immediately and
unconditionally to all members of the WTO.It is also considered as a foundation of the
Non-Discrimination principle that holds up the trading system; without it, the system could
not exist.
5 Conclusion
In summary, this article has clearly mentioned that the world’s international trade has
changed over the past ten years159. However, since there are diverse trade activities all
of which have brought cohesion and improvements. For instance, an increase in
international merchandise trade by 5.3%in exports and 5.8% in imports have been
witnessed in this year alone. Such improvements are considered the fastest growth in
comparison to the past two years. This is because of the role that the World Trade
Organization (WTO) has played in ensuring the expansion of trade. As mentioned herein,
the WTO Director accepts such facts by providing a statement that robust data and
statistics provide an essential basis for all activities performed at WTO. Such data then
help the organization to pursue its mission of making the opportunities that trade offers
available to all organizations and nations.
In Conclusion, therefore, security exceptions are considered one of the key components
of "international trade law" as the GATT origin but with not much-required alteration
stating altered political and economic conditions. The "GATT Article XXI's" history of
drafting demonstrates there is a deprivation of appropriate regulating systems in the
159 WTO,
World Trade Statistical Review [2017]

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provision of the article, specifically openings to direct the application. It is as well
observed that also the novel exceptions of security specified in the “TRIPS Agreement
and GATS” involve evidently varying and confusing components. The latest economic
sanction in contradiction to North Korea after the atomic experiment is an illustration on
hand. Even though the recent sanctions are embraced under the Chapter 7 of UN
Charter, secondary economic authorizations, in the case used in the upcoming contrary
to additional unlawful actions, might result in hypothetically impossible lawful disputes
amongst the members of WTO. In addition, the trading system of the world is required to
handle the completely diverse aspects of national security at the present time for instance
"terrorism, energy security and cyber-security". These circumstances rise an impending
query on the way to form those mysterious provisions of the security exception effectually
applicable lawful regulation. The members of WTO are required to state this problem as
initially as probable to evade enforcing a pointless and unsuitable pressure to the "dispute
settlement system" of WTO.
Whereas the utilization of economic sanctions can be a diplomatically appealing tool of
policy, their efficiency is debatable. Governments are eager to "walk the talk", regardless
of how much costs they incur. Certainly, a priori an influential tool and create financial
costs, but it was debated that such costs function in both ways. Furthermore, there are in
general "third parties" who are keen to acquire benefit from the circumstances and break
down the sanctions. It might direct towards an alteration in trade partners and the
formation of novel associations and hence totalling to the costs to a minimum of one
party. Provided the methods through which trade has developed in the course of time,
involving the production globalization and the rising interdependence of trade

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relationships among countries, the efficacy of “economic sanctions” is lessened even
more160.
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