Saudi Arabia bans all trade with Qatar in June 2017

Context

On June 5, 2017, Saudi Arabia cut all trade and diplomatic ties with Qatar, and heavily restricted travel, including through closing its land border with Qatar. Saudi Arabia was part of a coalition of states taking similar actions against Qatar, including Bahrain, the UAE, and Egypt; this core coalition was supported to an extent the Maldives, Yemen, and (one of the authorities in) Libya. Qatar’s alleged support for terrorism/political opponents of Saudi Arabia and others, its relations with Iran, and its use of the Al Jazeera broadcaster to promote its own interests in the region were cited as reasons behind these sweeping measures. 

Each of the anti-Qatar coalition states imposed varying measures against Qatar reflecting their unique circumstances. For Saudi Arabia, which informally led this coalition, these unique measures included:

• A block on Qatari-owned TV sports broadcaster beIN from being viewed in Saudi Arabi, and (alleged) informal tolerance of property rights violations of beIN in Saudi Arabia (Qatar launched WTO proceedings against this in 2018) 
• A blockade on the land border shared between Saudi Arabia and Qatar
• Special allowances for religious pilgrims from Qatar, who were still allowed access to Saudi Arabia’s religious sites and associated services.

Impact

Prior to these measures, 40% of Qatar’s food was imported through its land border with Saudi Arabia, and consequently this measure reportedly led to short-term issues of panic buying and depleted shelves at many of Qatar’s supermarkets. However, this short-term impact was alleviated by alternative suppliers from Turkey and Iran. Airspace restrictions also led Qatar’s national carrier, Qatar Airways, to have to re-route flights. And new sources of building materials were required for Qatar to continue building infrastructure to host the 2022 FIFA World Cup.

However, claims from a Qatar-based analyst suggested that, despite short-term pain, “[i]n key ways, the blockade bolstered Qatar’s economy” because it  “helped it become more self-sufficient and kick-started the country’s economic diversification efforts.” Notably, despite these measure’s Qatar’s economy reportedly grew by 2.4% in 2018 and around 3.1% in 2019.

Responses  

i) Qatar government and industry responses.

Responding to the imposition of these measures on July 5, 2017, Qatar’s foreign minister, Sheikh Mohammed bin Abdul Rahman Al Thani accused the anti-Qatar coalition of “demanding that we (Qatar) have to surrender our sovereignty”, adding that Qatar would “never do” that. Sheikh Mohammed also stated that “Qatar continues to call for dialogue, despite the violation of international laws and regulations, despite the separation of 12,000 families, despite the siege that is a clear aggression and an insult to all international treaties, bodies and jurisdictions”. Additionally, in August 2017 requested WTO consultations with Saudi Arabia (and Bahrain and the UAE) over what it called “coercive attempts at economic isolation”. 

Qatar responded economically to these measures by ramping up its trade links with Turkey and Iran. It also expanded investment links with Southeast Asia.  

At the same time, Qatar sought to respond to food security vulnerabilities exposed through these measures (90% of Qatar’s pre-blockade food was imported), Qatar invested in domestic food production, which reportedly grew by around 400% from 2017-19. Notably, Qatar became self-sufficient in dairy by 2019 by growing a domestic dairy industry, having previously imported around 72% of its consumption. Qatar’s leading dairy firm, Baladna, sourced around 18,000 Holstein dairy cows from Europe to boost its production.

(ii) Saudi Arabian government and industry responses

On June 23, 2017, AP News published a list of demands from Saudi Arabia, the UAE, Bahrain, and Egypt, that mediator Kuwait had presented to Qatar the previous day, June 22, on their behalf. If Qatar agreed to comply then it was offered an end to the trade and diplomatic measures. These demands were that Qatar should (summarised):

1. Downgrade economic, diplomatic and military ties with Iran
2. End relations with ‘terrorist groups’ such as the Muslim Brotherhood and Hezbollah
3. Close the TV station Al-Jazeera and its affiliates
4. Close other news outlets funded by Qatar
5. End military cooperation with Turkey
6. End all funding for entities designated “terrorists” by the anti-Qatar coalition
7. Extradite terrorists and other wanted criminals from the anti-Qatar coalition to their countries of origin
8. End practice of granting citizenship to nationals wanted in anti-Qatar coalition states, and revoke the citizenships already granted for those wanted in anti-Qatar coalition states
9. End contacts with (and share intelligence on) political opposition figures in anti-Qatar coalition states
10. Pay reparations and compensation to anti-Qatar coalition states
11. Align Qatar with the anti-Qatar coalition in all matters militarily, politically, socially, and economically
12. Agree to these demands within 10 days of notification
13. Agree to regular audits to monitor compliance with these demands for up to 12 years

On July 5, 2017, the anti-Qatar coalition told press that Qatar had sent them a “negative response” to the demands. Subsequently, on July 18, 2017, the New York Times reported that “senior diplomats” from the anti-Qatar coalition had “indicated… that they were no longer insisting on 13 precise demands that the Qataris must satisfy, or on a specific deadline for them to comply.” At a press conference, Saudi Arabia’s UN Ambassador Abdullah bin Yahya Almouallimi said that “[o]ur aim is to reach a diplomatic solution” and that he was hoping that Qatar would “come around” to the anti-Qatar coalition’s point of view. Replacing the hardline list of 13 explicit demands was a smaller and less specific demands for agreement on six key principles, summarised by the New York Times as “combating terrorism and extremism, denying financing and safe havens to terrorist groups, stopping incitement to hatred and violence and refraining from interfering in the internal affairs of other countries.”

(ii) Other states’ government and industry responses

Kuwait’s early attempts to act as a mediator failed, as did those of US Secretary of State, Rex Tillerson. Notably, US President Donald Trump commented on the initial blockade by appearing to side with the anti-Qatar coalition, saying that “[t]he nation of Qatar, unfortunately, has historically been a funder of terrorism at a very high level.” However, the US ultimately was viewed as playing a role in resolving the crisis.

WTO Dispute

Following its request for WTO consultations on 1 October 2018, in November 2018 Qatar requested that the WTO establish a panel to deal with some aspects of its grievance with Saudi Arabia – specifically Saudi Arabia’s refusal to recognise the intellectual property of Qatari rights holders. – See DS567 – Measures Concerning the Protection of Intellectual Property Rights. A panel report was circulated in June 2020, with Saudi Arabia initially indicating a wish to appeal. However by the end of 2021, the partites agreed to suspend the appeal, noting the terms of the Al-Ula Declaration signed by them on 5 January 2021.

Status

In January 2021, an agreement was reached ending these measures and restoring relations between the anti-Qatar coalition and Qatar, at a summit in the Saudi Arabian city of al-Ula, during which Qatar’s emir and Saudi Arabia’s crown prince embraced in front of reporters. It is thought that Saudi Arabia was supportive of a resolution to the crisis due to its desire to show the US’ Biden administration that it was in favour of dialogue and peace. The Al-Ula Declaration restored diplomatic relations between the parties.

Reference list

Almohamadi, S.F. 2017. “Qatar dispute exposes regional food-security failures.” IISS. August 21. Available at: https://www.iiss.org/online-analysis/online-analysis/2017/08/qatar-food-insecurity/

AP News. 2017. “List of demands on Qatar by Saudi Arabia, other Arab nations.” June 23. Available at: https://apnews.com/general-news-3a58461737c44ad58047562e48f46e06

BBC News. 2017. “Qatar crisis: What you need to know.” July 20. Available at: https://www.bbc.com/news/world-middle-east-40173757

BBC News. 2021. “Qatar crisis: Saudi Arabia and allies restore diplomatic ties with emirate.” January 6. Available at: https://www.bbc.com/news/world-middle-east-55538792

Cornwell, A. 2018. “Qatar launches WTO proceedings against Saudi Arabia over alleged IP violation.” Reuters. October 2. Available at: https://www.reuters.com/article/business/qatar-launches-wto-proceedings-against-saudi-arabia-over-alleged-ip-violation-idUSKCN1MB31L/

Gladstone, R. 2017. “Countries That Broke Ties With Qatar Indicate Some Flexibility on Demands.” New York Times. July 18. Available at: https://www.nytimes.com/2017/07/ 18/world/middleeast/qatar-crisis-demands-saudi-arabia-tillerson.html?rref=collection%2Fsectioncollection%2Fmiddleeast&_r=0

Harris, Gardiner. 2017. “Tillerson Comes Up Short in Effort to Resolve Qatar Dispute.” New York Times. July 13. Available at: https://www.nytimes.com/2017/07/13/world/ middleeast/qatar-saudi-arabia-rex-tillerson.html

Holland, S., and El Yaakoubi, Aziz. 2021. “Breakthrough reached in Gulf dispute with Qatar -senior Trump official.” Reuters. January 5. Available at: https://www.reuters.com/ article/world/breakthrough-reached-in-gulf-dispute-with-qatar-senior-trump-official-idUSKBN29924Q/#:~:text=Saudi%20Arabia%2C%20the%20United%20Arab,aims%20to%20undermine%20its%20sovereignty.

Kabbani, N. 2021. “The blockade on Qatar helped strengthen its economy, paving the way to stronger regional integration.” Brookings. January 19. Available at: https://www.brookings.edu/articles/the-blockade-on-qatar-helped-strengthen-its-economy-paving-the-way-to-stronger-regional-integration/

Mills, A. 2022. “Qatar, Saudi Arabia halt WTO efforts to resolve piracy broadcast dispute.” Reuters. January 11. Available at: https://www.reuters.com/world/middle-east/qatar-saudi-arabia-halt-wto-efforts-resolve-piracy-broadcast-dispute-2022-01-10/

Reuters. 2017. “Qatar makes legal complaint to WTO over Gulf trade boycott.” The Guardian. August 1. Available at: https://www.theguardian.com/world/2017/ jul/31/qatar-makes-legal-complaint-to-wto-over-gulf-trade-boycott

Smith, B. 2019. “The Qatar crisis and regional ramifications.” House of Commons Library. October 15. Available at: https://commonslibrary.parliament.uk/research-briefings/cbp-8690/

Smith, D., Siddiqui, S., and Beaumont, P. 2017. “Gulf crisis: Trump escalates row by accusing Qatar of sponsoring terror.” The Guardian. June 10. Available at: https://www.theguardian.com/us-news/2017/jun/09/trump-qatar-sponsor-terrorism-middle-east

The Peninsula. 2019. “Food production in Qatar grows by 400% since 2017.” March 13. Available at: https://thepeninsulaqatar.com/article/13/03/2019/Food-production-in-Qatar-grows-by-400-since-2017

Wellesley, L. 2019. “How Qatar’s Food System Has Adapted to the Blockade.” Chatham House. November 14. Available at: https://www.chathamhouse.org/2019/11/how-qatars-food-system-has-adapted-blockade

White, E. 2019. “The Qatari diplomatic crisis: All right, we’ll call it a draw.” The Strategist. March 8. Available at: https://www.aspistrategist.org.au/the-qatari-diplomatic-crisis-all-right-well-call-it-a-draw/