Topic B: Reopening of the Israel Boycott and the effects of said embargo to

Middle East Economy.

The boycott to Israel is an ideological, political and mainly economical matter

going on between Israel and the League of Arab States since the late 40’s. Over the
years, this boycott has had many repercussions for Israel, economically and culturally. It
has made its relations with Western countries, such as the United States of America,
who at the beginning of the 70’s decided not to support the boycott, stronger. It has also
increased the cultural quarrels and clashes between Jews and Arabs in the Middle
Eastern territories.

The League of Arab States, or more commonly known as the Arab League, is an
organization of countries whose citizens are mainly Arabic speaking; it consists of 22
member states and 1observer.1 The League of Arab States was founded in 1944 with the
purpose of promoting the interests and cooperation of its members. Currently, not all
members participate actively in the Boycott, but it still is a very strong movement.

On December of 1945 the Boycott of Israel was officially stated by the

countries of the League of Arab States, but since the foundation of the State of Israel
wasn’t until 1948, it started as a boycott of “Zionist”2 supplies and services within the
territory of Palestine. This is the most important cultural part of the boycott, the
isolation of Israel in support of Palestine, which has, as all the members of the Arab
League, an Arabic culture. After the independence of Israel of 1948, the boycott was
formally against the State of Israel, and expanded to also boycotting companies,
countries, and/or corporations who had any type of economic relation with Israel. In an
effort to make this boycott stronger and to prevent Israeli’s economy from growing, a
Central Boycott Office was settled.

1
Members of the League of Arab States are: Egypt, Iraq, Jordan, Lebanon, Saudi Arabia, Syria, Yemen,
Libya, Sudan, Morocco, Tunisia, Kuwait, Algeria, United Arab Emirates, Bahrain, Qatar, Oman,
Mauritania, Somalia, Palestinian Authority, Djibouti, Comoros and Eritrea as an observer.
2
Zionist refers to an ideology that promotes the unification of Jews in a single “home land (Israel)”.
 It is a huge concern to the whole world whether this boycott is ever going to end,
being a huge stain in the global economical environment that surrounds us. There are
lots of positions that can be taken towards this situation, but there cannot be a denying
that the boycott of Israel is a demonstration of the struggle that 2 civilizations are
having.

The Arab-Israeli conflict: The Cultural Roots of the Boycott.

It was the year 587 BCE when the people from Israel was first displaced from
their promised land, since then the Jewish people have had a history of invasions against
their territory. In the first half of the 20th century, lots of Jews started migrating back to
their promised land, what is now Israel, from many Arab and European countries. At
that time, when Palestine was under British mandate, there was a tendency of
discrimination towards Jews and there are records of great displays of violence against
them. The area that was Palestine is now part of Israel and part of Jordan. Palestinians
have an Arabic culture, and although more than 80% of the Palestinians moved to
Jordan after the creation of Israel there still are Palestinians living in the State of Israel.

In WWII, the most famous holocaust of all times, The Jewish Holocaust by the
Nazi regime, annihilated about 6 million Jews; a hit that really hurt and offended all the
Jewish people in the world and drove them further in their fight to “regain” their
promised land.

On May 14, 1948 all the British forces left Israel and the independence of the
State of Israel was officially declared. One day exactly after its independence, Israel
suffered and invasion from 5 Arab countries: Egypt, Syria, Transjordan, Lebanon and
Iraq. Wars were fought in 1956, 1967 and 1973, with the Israelis winning each time.
Since Israel’s independence, it seems that a never ending fight has been happening.
Arabs who live in the territory of Israel usually find hostility and discrimination, which
is returned to Israelis in most of Arab nations.

There is a global clash of civilizations between the Arab-Islam and the Western
World, with Israel being a “contrast country with a Western culture” inside the Middle
East. In our time, extremist Islamic groups commit atrocities against Israeli civilians
very frequently, and Israel supplies lots of extremist groups against Palestinians and
Arabs as well. The never ending fight is something remembered and experienced day by
day in the Middle East with these actions; the feelings of resentment and disagreement
from both nations are indeed very strong.

The boycott to Israel is more than just a boycott, is the economical

manifestation of a historical culture of discrepancy and antipathy feelings between the 2
nations.

How it Works: Structure of the Boycott and how it is Implemented

The Boycott is divided into 3 areas, referred as Primary, Secondary and Tertiary
boycott:
a) Primary Boycott: It prohibits the consuming and importation of Israeli
merchandise, goods, and services into boycotting countries.
b) Secondary Boycott: It forbids individuals, private and public organizations from
member countries to engage in any type of business with any other body that has
business with Israel.
c) Tertiary Boycott: It bans any entity in a member country from doing business
with any other companies that have transactions with the United States of
America or any other firms that are included on the Arab League Black List3.

All the actions taken and enforced to Israel or regarding any of the 3 aspects of the
boycott are regulated by the Central Boycott Office (CBO) based in Damascus, capital
of the Syrian Arab Republic. The Central Boycott Office is a sort of specialized agency
of the League of Arab States; it has several procedures in order to clearly settle that
everything about the boycott is agreed between all the member states. They run a list of
all the corporations in the Black List, recollect information and carries out any kind of
investigation if it is suspected that a member has committed any of the “forbidden”
activities that are stated in the boycott. Every 6 months there is a general meeting of all

3
The Black List basically includes all countries or companies that deal with Israeli markets and/or have
businesses with it.
the 22 members of the League of Arab States in order to discuss the status of the firms
on the blacklist, and the actions that should be taken if any novelty is presented.

Nevertheless, no state is attached to the boycott regulations, but they are taken as a
base for other rules implanted inside the countries. Some of the procedures that are
commonly enforced inside the countries are the strict verification of certificates of
origin on all goods that are purchased, to make sure that the conditions stated by the
boycott are met. Currently, Syria is the only country that loyally follows the 3 boycotts;
as for the rest of the Arab League members, the first boycott is the only one strongly
applied while the second and third aren’t usually put into action anymore.

Weakening of the Boycott

At the end of the 1970’s and the beginning of the 1980’s, the general economic
situation in most of the Middle Eastern countries suffered a decline.

Egypt was the first country to retrieve from the boycott. In 1978, Egypt and
Israel signed a treaty called the “Camp David Accords”, which were signed in
Washington D.C. under the supervision of the then President Jimmy Carter. In the third
part of this treaty that referred to Associated Principles, there was a clause that talked
about the boycott. “Signatories shall establish among themselves relationships normal to
states at peace with one another. To this end, they should undertake to abide by all the
provisions of the U.N. Charter. Steps to be taken in this respect include: a) full
recognition; b)abolishing economic boycotts; c)guaranteeing that under their
jurisdiction the citizens of the other parties shall enjoy the protection of the due process
of law4”. In 1979, the Egyptian-Israeli Treaty was signed as a continuation of the Camp
David Accords, also in Washington D.C. under the American supervision After these 2
treaties, Egypt became the first Arab state to recognize the existence of the state of
Israel, stopped enforcing the boycott to Israel and started having an economical relation
with it.

In 1993, the signing of the Oslo Accords were signed, in a public ceremony in
Washington D.C. The signing of this treaty was between the president of the Palestine

4
Camp David Accords. Framework C. Associated Principles, signed in 1978 in Washington D.C.
Liberation Organization Yasser Arafat, Israeli prime minister Yitzhak
Rabin and the former president of the
United States, Bill Clinton.
The “Oslo Accords” was a set of agreed upon principles that promoted peace
and cooperation between Israelis and Palestinians, which in consequence contributed to
the weakening of the boycott. In 1994, Jordan signed the “Treaty of Peace Between the
State of Israel and the Hashemite Kingdom of Jordan”, which contained 30 articles that
intended to normalize the relations between the 2 countries. As specified in article 7,
“To promote economic cooperation by to removing discriminatory barriers and
terminate economic boycotts”5, there was certain economic cooperation. Also in 1994, 6
countries of the League of Arab States who conform The Cooperation Council of the
Arab States of the Gulf , commonly known as the Gulf Cooperation Council (GCC);
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates; officially
announced that they would ban the secondary and tertiary boycott from their country’s
legislation and in 1996 announced the elimination of the primary boycott as well. In
these 6 countries, there are very few occasions in which the primary boycott is enforced,
but it is not official.
-The Response from the Western World
An uniform response from countries in the Western World wasn’t obtained.
Some countries supported it, some of them didn’t give an opinion, and some of them
expressed a “support for the Israeli people”. There are some business relations with
Asian and European The truth is that the only country whose taken position was heavily
influential was the one from the United States of America.
-The United States of America against the Boycott of Israel: the Polemic of their
position.
The United States of America was the first non-Arab country to take part in the
issues surrounding the boycott. Since the beginning of the 1980’s, the U.S.A. started
adopting anti-boycott legislations in an effort to forbid or decrease American companies
from cooperating to the boycott of Israeli enterprises and market.

5
“Treaty of Peace Between the State of Israel and the Hashemite Kingdom of Jordan”, article 7, 1994.
 The U.S.A. anti-boycott legislation was enacted in 1978. These laws are
included in the Export Administration Act (EAA) and in the Ribicoff Amendment to the
Reform Act of 1976 (TRA). Some of the things that are mentioned in these legislations
is the prohibition to any U.S. citizen or company from cooperating with any foreign
boycott and asks that these situations are reported to the Department of Commerce of
the Office of Anti-boycott Compliance (OAC). Some of the sanctions applied by the
EAA for violating the anti-boycott legislations are: for individuals a fine of $10,000 per
violation to individuals. Criminal penalties have fines around $50,000,or depending the
value of the exports involved and in some cases, imprisonment with a penalty of up to 5
years.
In the TRA there are also some rules that are against the boycott. It specially
punishes exporters that participate in the boycott by denying them some of the taxing
benefits that exporters usually get. They have to report if they have dealings with any
country that supports the boycott and under what conditions is this business, in some
cases dealing with countries that support the boycott is forbidden.

There are a lot of speculations on why the United States has taken this position
towards the boycott. Is it just because they truly believe that Israel deserves a better
treatment or is it to demonstrate and remind us their war against Islamic culture?

The only thing that is certain is that this pressure from the United States did
make some countries stop enforcing the secondary and tertiary boycott, especially after
the Gulf War. The position taken by the United States has also helped Israeli economy
and has relatively improved it.

Re-birth of the boycott:Latest events in regards to the Israeli boycott

After almost a decade of irregularly imposing the primary boycott, some events
started making Arab League countries want to reactivate the secondary and tertiary
boycott as well as strengthening the primary boycott. The constant attacks from Israel,
specially against Palestinians living in Israel and to the territories of the Gaza Strip have
awoken that feeling of difference between them and the rest of the Arab States.
 Since the “slowing down” of the Boycott in the late 80’s, no significant events or
meetings were held until 2001. In 2001, one of the most symbolic meetings in
Damascus, capital of the Syrian Arab Republic and headquarters of the Cenral Boycott
Office, was held. The intention of the meeting was clearly stated by the president of the
Central Boycott Office: reactivating the Arab world’s economic blockade on Israel,
specially the reinforcement of the secondary and tertiary boycott. Since only 13 of the
22 members of the League of Arab States showed up, the intention of reactivating the
boycott failed. Nevertheless the intention was already there, and it was said that the
League of Arab Stats would keep trying until they could reactivate the Boycott.

The next year, a meeting was again held in Damascus, Syria. There was a
resolution saying that ways of reactivating the Boycott should be considered and
improved, but no significant actions were shown to have been taken.

In 2005, Bahrain signed a trade deal with the United States meaning one thing:
Bahrain was completely withdrawing from the Israeli Boycott. But since 2007, the
Bahraini government has started a very strong campaign for reopening the Central
Boycott Office and the re-establishment of the secondary and tertiary boycott. Also in
2005, Saudi Arabia tried to became a member of the World Trade Organization and
therefore they had to withdraw from the Boycott since the WTO states that it is illegal
to ban commercial relations with another country, but a year later, the boycott hadn’t
been completely banned in Saudi Arabia.

In the past year, Bahrain emitted an official petition for the re-opening of the
Central Boycott Office, which was hugely supported by the Syrian government who
truly has been the most loyal member of the Boycott since it started more than 50 years
ago. The United Arab Emirates, one of the Arab countries with the most influential and
powerful economies in the world still enforce some aspects of the Boycott and have
expressed their intention of keep on doing it.

There is an observed trend: every time that there are armed conflicts between
Israeli and Palestinians, or any type of armed conflict involving Palestine and the rest of
the Arab World, the desire of re-opening the boycott is strengthend. It is expected that
after the violation of cease fire between the Palestinian Authority and the Israeli
government in December of 2008, new petitions for re-opening or strengthening the
Boycott will be held.

Even though it is not a member of the League of the Arab States or a part from
the Middle Eastern territory, Great Britain has to be mentioned. Britain has been
enforcing an Academic Boycott on Israel for the past few years. This boycott may not
be as harmful as the economic, but is just as meaningful and ideologically strong. It
started around the year 2002, and has been gaining strength ever since. British
academics have declared that if this is happening it is a sign of solemnity and support to
the Palestinians and the treatment they receive from the Israelis. This is a very
subjective position taken, but is a movement that is having a great impact and that has
generated a great “anti-Israeli” feeling in Europe.

What can be done, how benefitial would it be for the Middle Eastern
economy to have better economical relations with Israel.
A chain is only as strong as its weakest link, and the Middle Eastern countries
are a chain, a group; probably just because of their geographical positions, but that’s the
way it is. The truth is that the Middle Eastern countries are not characterized by the
strongest economy in the world; we have countries with contrasting economies and a
huge quantity of natural resources.

Transnational corporations suffer a great deal due to this boycott. Companies

such as Coca Cola and McDonald’s face the dilemma of choosing between Israel and
the United States or the Arab countries. Enterprises that are as powerful as these can’t
really afford those kinds of situations, governments can’t either. At this moment, we are
experiencing a boom of what can be called a global culture. Economic integration and
cooperation is a huge part of this.

A country’s identity and sense of nationality cannot be changed; every country

has a right to express these aspects and to defend their cultural heritage. But, how can
these 2 “block” in the Middle East put aside their differences and cooperate? Every time
a step is taken into banning the boycott, another one is given in order to re-establish it. It
has become a never ending cycle, but if the intention of ending it has ever been made it
is probably because it is needed. Economical cooperation could be very beneficial for
the Middle Eastern economy, healthy for their cultural differences and helpful for the
rest of the world.

Sources:
• Chill, Dan. “The Arab Boycott of Israel: Economic Aggression and World
Reaction”. United States of America, 1976. Harcourt School Editorial.
• Finkelstein, Norman. “Why an Economic Boycott of Israel Is Justified”.
http://www.normanfinkelstein.com/article.php?pg=11&ar=130 December
26,2008.
• Karam, Zeina. “Arabs Fail at Israeli Boycott”.
http://www.inminds.co.uk/boycott-news-0113.html December 26, 2008.
• Leyden, Joel. “British Boycott of Israel?”.
• http://www.israelnewsagency.com/britishboycottisraelunionsacademicjournalist
sjewishpalestine4848062007.html December 26,2008.
• Weiss, Martin. “Arab League Boycott of Israel”.
• http://fpc.state.gov/documents/organization/65777.pdf December 26, 2008.