Posts Tagged ‘World Trade Organization’

Legal Intricacies Complicate May’s Two-Year Brexit Transition Period

October 12, 2017

Need to quickly devise sweeping agreements suggests it might be easier to extend the breakup deadline beyond 2019

It cannot be emphasized enough that the European Union is not really a political project so much as a legal one.

Of course, the EU tries to find political solutions to its members states’ common political problems. But those solutions have to comply with the EU’s legal order, which is based on the EU treaties. Sometimes, the only solution is to change the treaties themselves—but that process is complicated, and even then any changes need to be consistent with the rest of the legal order. That can sometimes make it impossible to find a political solution even when the solution may seem obvious or the consequences of failing to do so stark. Just ask David Cameron, whose failure to secure significant curbs on the free movement of EU citizens is blamed by some for Brexit.

Now Mr. Cameron’s successor is making her own demands for a political solution to the problems caused by Brexit. Prime Minister Theresa May wants a transition deal—what she calls an “implementation period”—to enable the U.K. to continue to trade with the EU “on current terms” for around two years after the U.K. quits the EU in March 2019 while the UK’s new trading relationship with the EU is agreed to and arrangements put in place. The EU also needs time to prepare for the change. Yet devising a legally watertight way for the U.K. to continue to trade with the EU “on current terms” while no longer an EU member is likely to prove fiendishly difficult—some would argue impossible. Both British and EU officials acknowledge that they are at an early stage of grappling with the complexities.

The first challenge is that to preserve frictionless trade, the transition deal will need to find a way to replicate the UK’s existing commercial relationship with the EU in its entirety. That means that the U.K. will not only need to negotiate a temporary customs union with the EU that matches the existing customs union, but also a new regulatory relationship that allows full mutual recognition of testing and enforcement processes across all sectors, says Peter Holmes, reader in economics at the University of Sussex. The moment exceptions are introduced, there will need to be border checks, whether for customs or regulatory purposes. That could be tricky because there are some sectors where the U.K. may want to exempt itself from EU rules immediately. For example, environment minister Michael Gove says he wants to take back control of U.K. fisheries to avoid remaining subject to annual EU quotas set by Brussels. Yet if fisheries are excluded, “then every lorry will face random risk-based checks to see if there is a fish in it,” says Mr. Holmes.

A second issue concerns the 40 free trade agreements the EU has with third countries. These also need to be replicated in their entirety to avoid new barriers to trade. (Again any divergence from the EU’s commercial policy will lead to new trade barriers.) Yet rolling over these agreements, as the U.K. says it wants to do, isn’t straightforward. The problem is that once the U.K. itself becomes a third country, British goods containing substantial EU components may no longer count as British under the complicated rules of origin that govern world trade—and vice versa.

To change these rules to enable pan-European supply chains to remain in tact will require a three-way negotiation involving the U.K., EU and each of the countries with which the EU now has an free-trade agreement. As the U.K. is already discovering after running into opposition from the U.S., New Zealand and others over a deal reached with the EU at the World Trade Organization to divide up current EU agricultural quotas, other countries will robustly defend their interests.

A third issue is that whatever the EU offers to the U.K. by way of a temporary treaty also risks creating a precedent. In the British public debate, there is an assumption that the EU wants to punish the U.K. to deter others from leaving. But the EU is equally concerned that whatever it offers the U.K. doesn’t lead to demands from other non-EU countries for similar terms. The EU-Korea trade agreement contains a most-favored-nation clause that obliges each side to offer each other the same terms on access to their services markets that they offer in future trade deals to other third countries. A transition deal that allowed the U.K. full access to its financial-services market could become the basis for a demand for similar treatment from Korea.

The reality is that the only legally watertight transition deal that is guaranteed to enable trade to continue on “current terms” is an agreement to extend the Article 50 deadline. This can be done by unanimous decision of the member states. Of course, extending the UK’s EU membership beyond 2019 would be politically fatal for the current government, though it’s possible a majority would support it in parliament. It would also be politically toxic in the EU: There is a growing consensus that this is a bad marriage that just needs to end, says one senior EU diplomat. And extending Article 50 raises serious practical issues, including whether the U.K. would participate in EU parliamentary elections in 2019 and the next EU budget.

But those obstacles may yet prove easier to overcome than devising a way to replicate in full the EU customs union, the single market and 40 free-trade agreements from scratch in one year.

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China Delays Deadline for Implementing Food Import Rules After Industry Pushback

September 26, 2017
 

Image result for A salesman arranges milk products imported from Australia at a supermarket inside IAPM mall in Shanghai, China, August 15, 2015. REUTERS/Aly Song/File Photo

FILE PHOTO: A salesman arranges milk products imported from Australia at a supermarket inside IAPM mall in Shanghai, China, August 15, 2015. REUTERS/Aly Song/File Photo

BEIJING — China plans to delay a deadline for implementing new food import regulations by two years until October 2019, a senior EU official said on Tuesday, following a lobbying effort by Europe and the United States amid concerns about disruption to trade.

The extension comes just days before the new rules, which are part of a drive by China to boost oversight of its sprawling food supply chain, were due to come into force.

Jerome Lepeintre, minister counsellor for health and food safety at the European Union delegation in Beijing, said he received official documents on Monday night confirming the decision to delay had been logged with the World Trade Organization (WTO), as required by global trade rules.

Lepeintre said the move was “very positive” and would give exporters time to comply with the regulations, which were announced in April 2016 and require all food imports to carry health certificates, even if the product is deemed low-risk.

European and U.S. government and trade officials have warned the rules would hamper billions of dollars of shipments to the world’s No. 2 economy of everything from pasta to coffee and biscuits.

China asked for the change to be circulated by the WTO in a Sept. 22 communication to the organisation, a document published on WTO’s website showed.

“The General Administration of Quality Supervision, Inspection and Quarantine of China is currently studying the comments from relevant countries/regions,” said the notification.

“According to the comments and application received, we hereby decide to provide a transitional period of 2 years: from 1 October 2017 to 30 September 2019,” added the agency, which oversees the safety of all imports into China.

AQSIQ did not respond to a fax requesting comment from Reuters.

China has delayed enforcing other tough new trade regulations this year, including rules on the cross-border retail market and cyber security, after industry pushback.

(Reporting by Dominique Patton; additional reporting by Tony Munroe; Editing by Richard Pullin)

China Vows to Resist U.S. Trade Probe by ‘All Means Necessary’

August 25, 2017

 China's imports from North Korea slowed in July while its exports to the sanctions-hit country dwindled after surging in recent months, according to official Chinese statistics.

Photo AFP/ Nicolas Asfouri

“We are strongly discontented with this unilateralism and protectionism, and will take all means necessary to resolutely defend the legitimate rights and interests of the Chinese side and Chinese enterprises,” trade ministry spokesman Gao Feng said at a news conference Thursday, according to the Washington Post.

China has been pushing back against the U.S. this week after the Trump administration said it would launch an investigation of Chinese theft of intellectual property. That investigation could lead to trade sanctions against China.

On Monday, the Chinese Commerce Ministry said the trade investigation was “irresponsible” and claimed it ignored the rules of the World Trade Organization.

The U.S. Treasury imposed sanctions Tuesday on ten companies and six people from China and Russia for allegedly conducting business with North Korea in ways that helped the country’s nuclear weapons strategy. China responded by demanding that the U.S. immediately withdraw the sanctions. The Global Times, backed by the Chinese Communist Party, said the U.S. will “pay for the unjust ban on Chinese firms” and accused the U.S. of violating international law. The U.S. actions, the Global Times said, were an attempt to “tarnish the international image of China.”

http://www.breitbart.com/economics/2017/08/24/china-vows-resist-u-s-trade-probe-all-means-necessary/

Crawford Falconer takes up post as UK’s top trade negotiator — “Open markets at the core of the post-war global order.”

August 21, 2017

BBC News

Liam Fox and Crawford Falconer
Crawford Falconer, right, will begin his new job this week

The man in charge of negotiating the UK’s trade deals once Brexit is finalised, starts his job this week.

Crawford Falconer will take up the post of chief trade negotiation adviser at the Department for International Trade.

Leaving the single market would mean the UK would have to establish new bilateral trade agreements, but cannot formally do so until after Brexit.

However, one economist suggested Mr Falconer would already be “building bridges” with the European Commission.

The UK faces a huge challenge in resetting its trading relationship with the EU and other countries when Brexit takes effect.

Trade pacts that have been negotiated by the EU with the rest of the world will no longer apply to the UK, while Britain will also need to define new trading relationships with the EU itself.

Membership of the EU has meant the UK does not have a large bank of trade negotiators with recent experience.

A New Zealander, Mr Falconer has more than 25 years trade experience. He has represented New Zealand at the World Trade Organization (WTO) and held various posts in foreign and trade affairs in his home country.

Prof Alan Winters, from the University of Sussex’s UK Trade Policy Observatory, said Mr Falconer’s experience and contacts at the WTO would mean the groundwork for separating UK trade policy from Brussels would be made easier.

“He knows quite a lot of the main players at the WTO and can build bridges at the European Council, which is good as there is work to be done right now,” he said.

“There is work he can do, such as discussions on whether the UK uses replicas or changes trade agreements that we have with nations by way of membership with the EU.”

One suggestion has been that initially trade agreements could be adopted by the UK in their current form – replicating them – at the point of Brexit, to be altered subsequently as new deals are agreed.

International Trade Secretary Liam Fox said of the new appointee: “Crawford Falconer brings a wealth of international trade expertise to our international economic department, ensuring that as we leave the EU, the UK will be at the forefront of global free trade and driving the case for international openness.”

Mr Falconer will lead trade policy and negotiation teams at the DIT. His appointment was first announced in June.

http://www.bbc.com/news/business-40992101

See also:

Britain’s post-Brexit trade deals will make world safer place, new trade chief vows

http://www.telegraph.co.uk/news/2017/08/20/britains-future-trade-deals-will-make-world-safer-place-governments/

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THE Government’s new chief trade negotiation adviser has said the trade deals Britain can strike after Brexit could help boost global security.

Crawford Falconer tells The Telegraph that Britain will lead efforts to avoid conflict by creating new trade allies around the world.

Crawford Falconer, the Government’s new chief trade negotiation adviser, said the trade deals Britain can strike after Brexit could help boost global security

GETTY IMAGES – GETTY
Crawford Falconer, the Government’s new chief trade negotiation adviser, said the trade deals Britain can strike after Brexit could help boost global security

Last week, the Government conceded that the UK will not be able to implement any free trade agreements under a proposed customs transition deal which will expire around two years after Brexit in March 2019.

But Mr Falconer, who will work alongside International Trade Secretary Liam Fox from this week, says that the UK can help promote stability by striking deals with nations that want to benefit from the country’s democratic reputation

He said: “There is a powerful political and security element to getting this right.

“History is littered with instances of the destructive political consequences of closed markets.

“This was a lesson well understood at the end of the last century’s global conflicts

“It was at the core of the post-war global order.”

He added:”And the UK was nothing less than one of the chief architects of that order.

“Many countries still recognise that open trade policies directed at engaging with others are at the core of any strategy to improve the global prospects for political openness and stability. They are already looking to partner with us to re-energise that agenda.”

Mr Falconer is an experienced trade negotiator who also served as New Zealand’s ambassador to the World Trade Organization.

It comes as The Daily Express reports how Britain has seen £50billion invested in the UK and the promise of 44,000 new jobs since the Brexit vote.

Change Britain campaign group found firms from around the world were bringing their business to the UK.

Chairwoman Gisela Stuart, a former Labour MP and Leave campaigner, told the newspaper: “Workers and businesses will continue to prosper once we’ve left the EU as we begin to strike our own free trade deals with growing economies around the world, spreading wealth and creating jobs throughout the UK.”

https://www.thesun.co.uk/news/4285155/government-negotiator-says-post-brexit-trade-deals-will-help-boost-global-security/

China says US trade probe would violate international rules

August 15, 2017

By Joe McDonald
The Associated Press

Image result for shanghai skyline

Pictured: Shanghai

BEIJING (AP) — China criticized President Donald Trump’s order for a possible U.S. trade investigation of Beijing’s technology policies as a violation of global rules and said Tuesday it will “resolutely safeguard” Chinese interests.

Trade groups for technology companies welcomed Trump’s order Monday but the Chinese Commerce Ministry said it violated the spirit of international trade and Washington’s World Trade Organization commitments. The ministry said Beijing will take “all appropriate measures” if Chinese companies are hurt but gave no details.

Trump told U.S. trade officials to look into whether to launch a formal investigation into whether Beijing improperly requires foreign companies to hand over technology in exchange for market access.

“If the U.S. side disregards the fact it does not respect multilateral trade rules and takes action to damage the economic and trade relations between the two sides, then the Chinese side will never sit back and will take all appropriate measures to resolutely safeguard the legitimate rights and interests of the Chinese side,” said a Commerce Ministry statement.

Beijing requires automakers and other foreign companies in China to work through joint ventures, usually with state-owned partners. They often are required to give technology to partners that might become competitors.

More than 20 percent of 100 American companies that responded to a survey by the U.S.-China Business Council, an industry group, said they were asked to transfer technology within the past three years as a condition of market access, according to Jake Parker, the group’s vice president for China operations.

“We don’t believe market access should be contingent on transferring technology,” said Parker. “It goes counter to China’s WTO commitments.”

Foreign business groups complain companies are being squeezed out of promising Chinese markets or pressured to hand over technology for electric cars and other emerging industries.

Trump said in April he was setting aside trade disputes while Washington and Beijing worked together to persuade North Korea to give up nuclear weapons development. But American officials have resumed criticizing Chinese policy in recent weeks.

“The White House is right to make clear all options are on the table,” said Robert D. Atkinson, president of the Information Technology and Innovation Foundation, an industry group in Washington, in a statement.

The Commerce Ministry complained Trump’s order was “strong unilateralism” that violated the spirit of multinational trade agreements.

“We believe the U.S. side should strictly adhere to commitments and should not become the destroyer of multilateral rules,” said the statement.

Ahead of Monday’s order, the Chinese foreign ministry appealed to Trump to avoid a “trade war.” A state newspaper, the China Daily, said an investigation could “intensify tensions,” especially over intellectual property.

Parker noted then-President Barack Obama ordered a similar investigation of Chinese policy on green technology in 2010. That ended in a negotiated settlement.

“It didn’t lead to any unilateral sanctions against the Chinese,” said Parker. “Nor did it undermine the overall U.S.-China trade relationship.”

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Chinese Ministry of Commerce (in Chinese): http://www.mofcom.gov.cn

Related:

Chinese state newspaper says Trump trade probe will ‘poison’ relations

August 14, 2017

BEIJING (Reuters) – U.S. President Donald Trump’s order to his top trade adviser to investigate supposedly unfair Chinese trade practices will “poison” relations between the two countries, a Chinese state-run newspaper said on Monday.

Trump will later on Monday issue the order to determine whether to investigate Chinese trade practices that force U.S. firms operating in China to turn over intellectual property, senior administration officials said on Saturday.

The move, which could eventually lead to steep tariffs on Chinese goods, comes at a time when Trump has asked China to do more to crack down on North Korea’s nuclear missile program as he threatens possible military action against Pyongyang.

Trump has said he would be more amenable to going easy on Beijing if it were more aggressive in reining in North Korea.

In an editorial, the official China Daily said it was critical the Trump administration doesn’t make a rash decision it will regret.

“Given Trump’s transactional approach to foreign affairs, it is impossible to look at the matter without taking into account his increasing disappointment at what he deems as China’s failure to bring into line the Democratic People’s Republic of Korea,” the English-language paper said.

“But instead of advancing the United States’ interests, politicising trade will only acerbate the country’s economic woes, and poison the overall China-U.S. relationship.”

An administration official has insisted diplomacy over North Korea and the potential trade probe were “totally unrelated”, saying the trade action was not a pressure tactic.

The China Daily said it was unfair for Trump to put the burden on China for dissuading Pyongyang from its actions.

“By trying to incriminate Beijing as an accomplice in the DPRK’s nuclear adventure and blame it for a failure that is essentially a failure of all stakeholders, Trump risks making the serious mistake of splitting up the international coalition that is the means to resolve the issue peacefully,” it said.

“Hopefully Trump will find another path. Things will become even more difficult if Beijing and Washington are pitted against each other.”

Chinese Newspaper Warns Trump Risks ‘Trade War’

August 14, 2017

BEIJING — A Chinese state newspaper warned Monday that President Donald Trump “could trigger a trade war” if he goes ahead with plans to launch an investigation of whether China is stealing U.S. technology.

In a commentary by a researcher at a Commerce Ministry think tank, the China Daily said Trump’s possible decision to launch an investigation, which an official says he will announce Monday, could “intensify tensions,” especially over intellectual property.

The official told reporters Saturday the president would order his trade office to look into whether to launch an investigation under Section 301 of the Trade Act of 1974 of possible Chinese theft of U.S. technology and intellectual property.

The Chinese government has yet to comment on the announcement.

Image result for patent and trademark office, signage

A decision to use the Trade Act to rebalance trade with China “could trigger a trade war,” said the commentary under the name of researcher Mei Xinyu of the ministry’s International Trade and Economic Cooperation Institute.

“And the inquiry the U.S. administration has ordered into China’s trade policies, if carried out, could intensify tensions, especially on intellectual property rights.”

The commentary gave no indication of how Beijing might respond but Chinese law gives regulators broad discretion over what foreign companies can do in China.

If an investigation begins, Washington could seek remedies either through the World Trade Organization or outside of it.

Previous U.S. actions directed at China under the 1974 law had little effect, said the China Daily. It noted China has grown to become the biggest exporter and has the world’s largest foreign exchange reserves.

“The use of Section 301 by the U.S. will not have much impact on China’s progress toward stronger economic development and a better future,” said the newspaper.

Related:

U.S. Plans Trade Measures Against China

August 2, 2017

Trump administration aims to force Beijing to crack down on intellectual-property theft and ease market access

A cargo ship is loaded at a port in Qingdao, in eastern China's Shandong province. China had a $347 billion trade surplus with the U.S. last year.
A cargo ship is loaded at a port in Qingdao, in eastern China’s Shandong province. China had a $347 billion trade surplus with the U.S. last year. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES

WASHINGTON—The Trump administration is planning trade measures to force Beijing to crack down on intellectual-property theft and ease requirements that American companies share advanced technologies to gain entry to the Chinese market.

The administration is considering invoking a little-used provision of U.S. trade law to investigate whether China’s intellectual-property policies constitute “unfair trade practices,” according to people familiar with the matter.

That would pave the way for the U.S. to impose sanctions on Chinese exporters or to further restrict the transfer of advanced technology to Chinese firms or to U.S.-China joint ventures.

American business frustration with Chinese trade and market-access practices has mounted in recent years, with U.S. business groups urging the government to take a tougher trade line with China. Many organizations have complained that the Trump administration hasn’t pushed hard enough in areas like intellectual property, as it has focused more on Chinese manufacturing and China’s $347 billion trade surplus with the U.S. last year.

That discontent has intensified as China’s economy continued to expand and its computer and software sectors became bigger competitors internationally. Western firms fear China will use the regulations to bar foreign investments in areas that Beijing targets for investment, including semiconductors, advanced-machine tools and artificial intelligence.

One big question hanging over the White House review is whether the administration pursues any complaint through the World Trade Organization, or whether it chooses to impose penalties on its own without first seeking permission from the international body, which some Trump advisers have argued is incapable of dealing with China’s trade practices. Trump aides have regularly vowed to pursue a more unilateral approach to trade but have so far done little along those lines.

It is unclear how long the administration’s internal review will take before an announcement is made. Officials at one point had signaled that an announcement could come as soon as this week.

A White House spokeswoman declined to comment on the prospect of trade sanctions.

The White House has been wrestling in recent weeks with how to navigate trade relations with China following a stalemate during mid-July bilateral economic talks that yielded no concrete progress. President Donald Trump in recent days has also expressed open disappointment with Chinese efforts to curb North Korea’s nuclear program and administration officials have been increasingly outspoken in their criticism of Chinese trade practices.

Mr. Trump’s commerce secretary, Wilbur Ross, wrote an op-ed in Tuesday’s Wall Street Journal blasting China, as well as the European Union, for “formidable nontariff trade barriers” and vowing to “use every available tool” to fight those limits.

The White House expects that a crackdown on alleged Chinese intellectual-property expropriation would have widespread support among U.S. businesses, which have complained about Chinese business practices.

The response may be more divided, say industry officials. Those U.S. companies that want to keep their most advanced technology from Chinese hands would probably back the move, while others that want to license technology to Chinese firms could find the measures a hindrance.

China could also retaliate by blocking U.S. investments or making life tougher for U.S. companies in China.

Still, any action on Chinese intellectual property is bound to be more popular with the business sector than other trade moves the president has made, including his decision to withdraw from the Trans-Pacific Partnership as well as his threats to pull out of the North American Free Trade Agreement and to impose tariffs on steel imports.

Treasury Secretary Steven Mnuchin, Chinese Vice Premier Wang Yang and Commerce Secretary Wilbur Ross
Treasury Secretary Steven Mnuchin, Chinese Vice Premier Wang Yang and Commerce Secretary Wilbur Ross.  PHOTO: BRENDAN SMIALOWSKI/AGENCE FRANCE-PRESSE/GETTY IMAGES

The Trump administration’s exploration of new trade remedies against Beijing is significant in that they might involve dusting off long-ignored or little-used powers. In this case, one option under discussion is to use Section 301 of the Trade Act of 1974, which gives the U.S. government the authority to investigate alleged wrongdoing by trading partners and decide by itself the relevant penalty—to act, in the eyes of critics, as judge, jury and executioner.

Another option under discussion would be to invoke the International Emergency Economic Powers Act, a 1977 law that gives the president broad powers to regulate commerce after declaring a “national emergency.”

Widely used in the 1970s and 1980s, Section 301 cases have largely disappeared since the 1995 creation of the WTO, which has its own dispute-settlement process. A main goal of the Geneva-based institution was to curb such unilateral trade actions and to have them handled by a more neutral international arbiter. U.S. administrations over the past two decades have decided to steer nearly all trade complaints through the WTO and have rarely touched Section 301.

But Trump aides have often said they didn’t consider WTO rules sufficient to deal with Chinese practices and have indicated they may resort to pre-WTO unilateral practices.

“If any other administration self-initiated a Section 301 investigation, I would have found it highly unusual,” said Chad Bown, a trade-remedy expert at the Peterson Institute for International Economics. “But with Trump’s administration of U.S. trade policy, it appears that even the most obscure and unused U.S. law on the books is fair game.”

In May, more than four dozen U.S., European and Asian trade associations wrote a letter to the Communist Party group overseeing cybersecurity, for instance, complaining about a new law that the associations felt would require their companies to place data centers in China, find Chinese partners and transfer technology to the joint ventures. Beijing generally argues that it is trying to protect itself from efforts by Western intelligence services to tap into Chinese computer systems.

“All countries have legitimate concerns over privacy and national security, but China is the principal country addressing these concerns by requiring foreign companies to transfer their technology and to surrender their brand and operating control in order to do business,” the group wrote.

Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com and Bob Davis at bob.davis@wsj.com

Appeared in the August 2, 2017, print edition as ‘U.S. to Press China on Trade.’

https://www.wsj.com/articles/u-s-plans-trade-measures-against-china-1501635127?mod=e2fb

Qatar Takes Fight With Boycotting Arab Bloc to WTO

August 1, 2017

DUBAI, United Arab Emirates — Qatar has filed a complaint with the World Trade Organization against three of the four Arab countries that are isolating it, opening up a possible new path for negotiations with its opponents.

The Gulf nation said late Monday it had filed the grievance with the WTO’s dispute settlement body alleging that Saudi Arabia, the United Arab Emirates and Bahrain are violating laws and conventions related to trade.

The three countries, along with Egypt, cut diplomatic ties and severed air, land and sea links with Qatar on June 5, accusing it of supporting extremists. Qatar denies the charge and sees the boycott as politically motivated.

Qatar’s appeal to the WTO coincided with a visit to Geneva by Sheikh Ahmed bin Jassem bin Mohammed Al Thani, the country’s minister of economy and commerce, who met with the head of the trade organization and lawyers specializing in trade disputes.

Image may contain: 1 person, smiling, closeup

Sheikh Ahmed bin Jassem bin Mohammed Al Thani

It calls for the start of formal consultations with the three Gulf states and lays out specific trade violations, according to a statement released by Qatar’s government communications office. It argues the boycott hurts not only Qatar, which is the world’s biggest exporter of liquefied natural gas, but also its trading partners.

“This positive step taken by the State of Qatar clearly demonstrates to all member countries of the WTO the level of transparency exhibited by the State of Qatar through requesting formal and transparent dialogue and consultations with the siege countries,” the statement said.

Under WTO rules, the parties have 60 days to resolve their dispute through negotiations. If they fail, Qatar can request the establishment of an independent panel that could force the trio to end their boycott or face penalties.

Qatar has rejected a tough 13-point list of demands from the Arab bloc, arguing that accepting them wholesale would undermine its sovereignty.

Fellow Gulf state Kuwait is mediating the crisis, but it and Western-led diplomatic efforts have so far failed to secure a breakthrough. Neither side has shown any significant sign of backing down.

The isolation campaign, which sealed Qatar’s only land border with Saudi Arabia, has proved costly for the 2022 World Cup host, however.

Qatar Airways, one of the Mideast’s biggest long-haul airlines, has been forced to reroute flights on costly detours over friendlier airspace and is blocked from flying to key regional feeder airports such as Dubai. The boycott has dramatically driven up costs to import food, medicine and likely even building materials that Qatar needs for extensive infrastructure projects.

Related:

Qatar Launches Wide-Ranging WTO Complaint Against Trade Boycott

July 31, 2017

GENEVA — Qatar filed a wide-ranging legal complaint at the World Trade Organization on Monday to challenge a trade boycott by Saudi Arabia, Bahrain and United Arab Emirates, Qatar’s WTO representative Ali Alwaleed al-Thani told Reuters.

By formally “requesting consultations” with the three countries, the first step in a trade dispute, Qatar triggered a 60 day deadline for them to settle the complaint or face litigation at the WTO and potential retaliatory trade sanctions.

Qatar is also raising the boycott at a meeting of the U.N. International Civil Aviation Organization on Monday, al-Thani said.

(Reporting by Tom Miles; Editing by Alison Williams)