Middle East trade conflict drags on; it could create problems for American business, says KU expert

As the trade conflict between Qatar and its Middle East neighbors including Saudi Arabia is now well over 100 days old, a Middle East expert and University of Kansas professor commented on the situation.

Saudi Arabia, along with Bahrain, the United Arab Emirates and Egypt declared a total embargo on trade, investment, financial transactions and travel with respect to Qatar,” said Raj Bhala, the Brennesein Distinguished Professor at the University of Kansas Law School, and a Senior Advisor at Dentons. “They declared that embargo because they felt that Qatar, in its foreign policy, was supporting extremist groups that were destabilizing them.”

The Qatari response is to seek arbitration, while also attempting to find new markets without the assistance of its neighbors.

“Qatar has responded by trying to reach out and have the dispute arbitrated informally,” said Bhala. “Kuwait has stepped in and said it will try to mediate the dispute. Likewise, Oman has played a constructive role. The United States has offered to mediate, as well.”

The reason Qatar has the funds to attempt this maneuver is because of its wealth through the export of natural gas.

“Qatar has, basically, the largest natural gas reserves in the world,” Bhala said. “It shares a huge, proven, natural gas field with Iran. It’s development has been very much fueled, if you will, by natural gas. It’s got the highest per-capita income in the world. Saudi Arabia, of course, is the largest with respect to fuel, the traditional hydrocarbon of oil. We’ve got two big energy giants that have sort of squared off in this dispute.”

This makes business around the world, including here in America, cautious.

“They have been used to stable, peaceful, predictable relations among all the Gulf players,” said Bhala. “Businesses, whether they are in the energy sector, whether they are engineering, whether they are in law, education, they have been used to, for decades, being able to go…

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