Wednesday, February 01, 2006

Food boycott against Denmark may make it to WTO ::
But only if the boycott is seen as receiving state sponsorship

Earlier this week, Saudi Arabia recalled its ambassador from Denmark and Saudi religious leaders have urged a boycott of Danish products. The move made EU trade commissioner Peter Mandelson raise a warning finger against governments who deliberately create a situation where EU goods are faced with unfair treatment. At a meeting with a Saudi minister in the Swiss mountain resort of Davos on Sunday, Mr Mandelson urged the minister to "convey the seriousness of this issue to his government," his spokesman said. "Any boycott of Danish goods would be seen as a boycott of European goods," Mr Mandelson's spokesman said, adding that if any government was proven to have supported a boycott of EU goods, he would be forced to bring the case up before the WTO.
Commission backs Denmark :: EuroActiv


EU Trade Commissioner Peter Mandelson has reminded Abdullah Zainal Alireza, the Saudi Arabian minister of state, that the country's recent membership of the WTO means that "a boycott of Danish goods was a boycott of the European Union".
I don't pretend to know the WTO rules on boycotts. Here's what the United States Trade Representative said in September about the agreement allowing Saudi Arabia's accession to the WTO:

Saudi Arabia has confirmed that it will not invoke the non-application provision of the WTO Agreement and thus will have WTO relations with all WTO Members. Saudi Arabia has also confirmed that it will not apply the secondary and tertiary aspects of the Arab Boycott of Israel.
Back on September 12, 2005, Saudi Arabia's largest English daily (Arab News) reported:

According to Al-Watan Arabic daily, the WTO agreement signed by Saudi Arabia and the US in Washington includes a paragraph stating that the Kingdom would not implement economic boycott on second and third parties having economic and trade relations with Israel without pointing to the first party. “This means the Kingdom’s boycott of Israel will continue,” the newspaper said.

Secondary boycott means keeping away from concluding any trade deals with foreign companies that deal with Israel or contribute to its economic and military development. Tertiary boycott means making no trade deals with foreign companies which establish relations with other firms having trade relations with Israel. The GCC countries including Saudi Arabia have already agreed in 1994 to avoid secondary and tertiary boycotts, the paper pointed out. Saudi Arabia has continued its rejection of lifting Israeli boycott since the beginning of WTO talks.
See also this report by Tarek A-Issawi.



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