ISRAELIS HARVEST grapes for wine, some of which will be exported. The author notes that market forces have trumped boycott attempts..
(photo credit: REUTERS)
President Donald Trump’s Jerusalem declaration has already triggered calls for greater UN involvement in the Israeli-Palestinian conflict and economic warfare. Coercing American and Israeli companies to withdraw from their West Bank operations may sound logical to boycott supporters promoting their agenda, yet such pressure is ineffective and counterproductive.
The latest UN attempt to do exactly that is a case in point. And it is not only about the potential illegality and immorality of the efforts. In fact, UN credibility is on the table, and we should all care about it.
Earlier this year, the Human Rights Council in Geneva, a UN agency, adopted a resolution that calls for the creation of a “blacklist” of companies, both Israeli and foreign, which operate in the West Bank, east Jerusalem and the Jordan Valley beyond the “Green Line.” According to media reports, the UN has since sent several letters to Israeli and foreign companies, asking for clarifications regarding their activities in the occupied territories. Yet the list has not and may not be published officially.
From AirBnB to Caterpillar, global companies, while not involved in any political activity in the region, face potential pressure on their suppliers and customers not to participate in any commercial activities in said areas and in Israel at large. Since most foreign companies, mainly American and European, along with Israeli ones, do not distinguish between the West Bank and the rest of Israel’s territory, they find the UN’s process unexpected, ineffective and counterproductive.
Many of the listed companies are US-based, and the US administration, which has already been active against the one-sided anti-Israel bias within the UN system, called the leadership of the HRC and the UN more generally to withdraw this “blacklist” initiative. The High Commissioner for Human Rights announced that he will publish the list by end of year following various deliberations.
While it is important to remember that the HRC’s resolution has no immediate operational or legal consequences, it’s only common sense that this process should be abolished before it backfires in one of several possible ways.
First, many of the foreign companies operating in Israel, including in the West Bank, are involved in technologies or projects that impact humanity and global economic development on a daily basis. From car safety technology to chips that are part of every cell phone – the deep integration of Israeli companies into the global economy is irreversible. Foreign companies operating in Israel do not only benefit the Israeli economy, but also make the world a better place.
Moreover, since many foreign companies, including American ones, are oblivious to the difference between operating in mainstream cities and well-established settlements, many of which are part and parcel of the Israeli landscape and would remain under Israeli governance if a future agreement is formed, targeting and boycotting said companies may push them out of the market altogether and hurt the Israeli market. Such an economic vacuum would, in turn, be filled by other foreign firms, perhaps those that are less compliant with the UN system more generally.
Second, one of the reasons economic sanctions are so popular as a US and European policy is the inherent assumption that only targeted sanctioned entities pay the economic price, while regular citizens and consumers stay immune. The reality is that the international sanctions regimes taught us that too often they are ineffective, and consumers on both sides are the first to pay the price. In the Israeli context, many companies in the West Bank provide employment and related benefits to thousands of Palestinian workers. When Sodastream, a US-listed Israeli company in the beverage sector, relocated its plant from the West Bank, many Palestinian families lost their livelihood.
Third, previous failed attempts to boycott Israeli products in foreign markets indicate that market forces trump political goals. The weak implementation of any “blacklist” ideas and ineffective UN strategies would jeopardize UN legitimacy moving forward.
Fourth, this UN initiative appears to be the UN leadership’s last-ditch effort, hoping that multilateral pressure will force the Israeli government to revive the Israeli-Palestinian dialogue and to agree to political concessions. One of the biggest lessons from the Oslo Agreements process of the 1990s was that you cannot sign a permanent peace agreement, including borders and security measures, without strong support from the Israeli street. For any future peace agreement in the region to be successful, it would have to gain the support of the general public.
Most Israelis, including many 1990s leftwing supporters, saw firsthand the devastating results of unilateral actions carried out by both the Israeli and Palestinian governments, such as the Gaza disengagement, without preliminary consensus building.
The UN should focus on helping with consensus building efforts, fighting hatred on both sides, and providing both governments with policy tools to facilitate trust and joint economic and social projects.
Finally, the UN suffers from a serious trust deficit among Israelis more generally. As many UN agencies single out Israel in their decisions and resolutions, from UNESCO to World Health Organization, it is extremely difficult for Israelis to see the net benefits of a greater UN involvement in the region. Various attempts to open UN agencies to senior Israeli employees, and UN tenders to Israeli companies, were not fruitful, partially because of the continuous crisis in Israel-UN relations. The proposed corporate “blacklist” database will only exacerbate the underlying mistrust toward the UN and its agencies among Israelis.
There is no doubt that more could be done to continue to make the lives of Israelis and Palestinians in the West Bank better and safer. Yet, chasing companies that operate in the Israeli market would not do just that. It will just make the Middle East reality grimmer, reducing economic stability, and adding to the growing lack of credibility toward the UN moving forward.The author is an international economic law and business professor, media commentator, and adviser.