International economic boycotts are among the means used by states against other states to place pressure on them, or to attempt to break them.
Sometimes it is not states that call for boycotts on other states, but groups of citizens wishing to protest against the policies of the target state. The Arab boycott of Israel is an example of the first type of boycott, while the current calls for boycotting Israel due to its policies related to the West Bank and Gaza Strip are, to a large extent, an example of the latter.
Even before it was established Israel faced an economic boycott, declared on the Jewish community of Palestine by the Arab League in 1946.
The Arab boycott of Israel existed effectively until the early 1990s when following the Madrid Conference of 1991, and the Oslo Accords of 1993, the effects of the boycott started to melt away as trade relations and other economic relations started to develop with many states – Arab and non-Arab – which had previously avoided establishing any sort of relations with Israel, and as companies that had given in to the secondary boycott started to trade with and invest in Israel.
Most Israelis today do not remember the days when Israel had no diplomatic and economic relations with India and China, when Subaru was the only significant Japanese car manufacturer to sell in Israel, and Pepsi Cola refrained from selling and manufacturing in Israel. India established relations with Israel in 1991, China in 1992, the major Japanese car manufacturers started selling in Israel in 1994, and Pepsi Cola entered the Israeli market in 1991.
Most right-wingers in Israel, who see the peace process in general and the Oslo Accords in particular as having brought Israel nothing but harm, are either ignorant of these facts, or choose to ignore them, because they do not tally with their perception of reality.
Unlike the current boycotts on Israel (of which more later on), the Arab boycott was highly structured and institutionalized. All the Arab states were involved, it was made up of a primary boycott (the refusal of the Arab states and its allies to have any economic contacts with Israel), a secondary boycott (the boycotting by the Arab states of companies in third countries that maintained economic contacts with Israel), and a tertiary boycott (the boycotting of companies that maintained economic contacts with boycotted companies).
The boycott, which was part of the Arab policy of trying to weaken and eventually destroy the Jewish state, was managed by the Arab League from Damascus, where the Central Boycott Office was located. The CBO was responsible for warning companies in third countries to stop doing business with Israel or risk entering the list of boycotted companies. The boycott list included the names of thousands of companies.
The number of companies that submitted to the boycott is unknown, but certainly large.
Israel fought back by doing its utmost to get friendly countries to introduce anti-boycott legislation (it was successful in the US); by establishing straw companies to help foreign companies circumvent the Arab boycott; by getting Jewish communities around the world to boycott the products of companies that had given in to the Arab boycott; and by developing its economy in a manner that would minimize the effects of the boycott. After the 1973 Yom Kippur War, and as a direct reaction to the world energy crisis, an Economic Warfare Authority was established within the Finance Ministry to monitor the boycott, and propose counter- measures. Formally the Authority still exists.
Nobody knows what the net cost of the boycott has been to Israel over the years. Undoubtedly the boycott was an inconvenience to Israel, increased the prices of many products, resulted in loss of foreign investment, and had an effect on Israeli exports. At the same time it was one of the main driving forces for Israel developing a highly sophisticated arms industry and accompanying industries, and forced Israel’s economic leaders to be resourceful and crafty.
According to a report on the Arab boycott published in December 2013 by the Congressional Research Service in Washington, DC, Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, the UAE and Yemen still try to get American companies to submit to the boycott.
However, as far as Israel is concerned, for all effects of purposes the boycott is no more than an occasional irritant.
However, Israel’s boycott problems are not over, though as a general rule the boycotts are not directed against Israel as such, but against Israeli settlements and economic activities in the West Bank, east Jerusalem and the Golan Heights, which according to those calling for the boycotts – whether individual states, international organizations (especially the EU) or individuals – are illegal, since said territories are occupied, and not part of the sovereign territory of Israel.
Of course, those in Israel who believe that the West Bank, east Jerusalem and the Golan Heights are inalienable parts of Eretz Yisrael, irrespective of what international law might have to say on the matter, refuse to view the current boycotts, or calls for boycotts, as anything but illegitimate intervention in Israel’s internal affairs at best, and blatant manifestations of anti-Semitism at worst.
Those of us who believe that as long as the permanent status of said territories is not settled they are not an integral part of the State of Israel, and that at least some of them will eventually form part of a Palestinian state, or might be returned to Syria if and when that proves possible – have ambivalent feelings about the boycott issue.
We understand the motives of at least some of those calling for the boycotts (including states that are among Israel’s remaining friends and allies), but are not so naïve as not to understand that there might be other, sinister motives involved.
There is no doubt that old-type anti-Semitism is to be found among some of those advocating boycotting Israel, and that a totally different yardstick is used by them to measure Israel’s deeds and misdeeds than is used to measure all other states in the world, including those whose misdeeds are much worse than those we are alleged to have committed.
However, the bottom line is that there is very little Israel can do to prevent the economic boycott of the Jewish settlements and economic activities in the West Bank, east Jerusalem and the Golan Heights by those who believe that Israel has no business remaining in these territories, short of a settlement that might or might not leave some of these territories in her hands. Nor can Israel stop those Muslim forces, anti-Semites, do-gooders and fellow-travelers who simply consider it “cool” to be against Israel and in favor of the Palestinian underdogs without really knowing the historical facts, from calling for a boycott of Israel as a whole (not just the settlements) as part of their demand to “free Palestine.” It can and should do its utmost to minimize their effectiveness.
However, just as Israel survived the original Arab boycott, so it will overcome the current wave of boycotts, with little more than some discomfiture.
Nevertheless, there is no doubt that just as in the early 1990s the Madrid Conference and Oslo Accords created an atmosphere that was conducive to removing any vestiges of Israel’s economic isolation in the world, so today an Israeli policy of flexibility – whether on the issue of a partial lifting of the blockade on the Gaza Strip (with appropriate guarantees to Israel’s security), or on the issue of serious negotiations with the current Palestinian government on moving toward a two-state solution (without Israel placing deliberate obstacles on the way) – will prevent a superfluous worsening of Israel’s international economic status.
Is the current Israeli government, with its current make-up, capable of delivering? I have serious doubts.
Prime Minister Binyamin Netanyahu has three alternatives to choose from: to change the make-up of his government, to call for new elections, or to sit tight and do nothing. My guess is that, as usual, he will choose the latter option.
The writer worked for the Economic Warfare Authority in the 1980s, and engaged in research on the use of economic sanctions, including boycotts, in international relations.