Growing impact of boycott on Israeli exporters

Protest in Paris. Photo by Patrick Kovarik/AFP/Getty Images

Business boycott: Israelis feeling the pinch

By Daniella Cheslow, Jerusalem, DW
February 14, 2014

With the threat of EU economic boycotts hanging over Israel, business owners there say they are already starting to feel the pinch and are having to look for other, less lucrative export markets.

Hanan Pasternak moved to the Jordan Valley settlement of Netiv Hagdud 40 years ago and planted sprawling fields of green, yellow and red peppers that commanded high prices in Europe, especially in winter. But now Pasternak says he can only sell to Russia at vastly reduced prices because European supermarkets will not buy his vegetables.

“I am really worried about the future of my farm,” said Pasternak. “The Israeli market is small. The [Jordan Valley] farms were built for export.”

Pasternak is among a small but growing number of Israeli business owners who are feeling the pinch of European calls to boycott Israeli settlements, which Palestinians say are built on the land they claim for a future state. In the past few months, economic sanctions have expanded from West Bank settlements to include companies within Israel. The threat of losing Europe – Israel’s largest trade partner – has government ministers scrambling.

Attorney Daniel Reisner, who represents dozens of Israeli exporters, said Pasternak’s problems are the tip of the iceberg.
“We see companies trying to sell products abroad who are encountering protests and boycotts on stores selling their products,” Reisner told DW. “We see companies with whom resellers abroad won’t sign contracts for resale because they say ‘your product is related to the West Bank’ or some other potentially problematic locality. We see termination of contracts …. It’s quite obvious the numbers are on the rise.”

Gradual impact
Reisner said the scope of the phenomenon is still limited. However, he noted some European partners recently cut off trade with companies based in Israel but with activities in the settlements. In December, Dutch firm Vitens announced it would not work with Israeli water infrastructure company Mekorot because of its activities in the West Bank. The following month the Norwegian finance ministry announced it would stop investing its oil fund in construction firms Danya Cebus and Africa Israel because of their involvement in the construction of settlement homes. And in early February, Denmark’s Danske Bank blacklisted Israeli Bank Hapoalim because it funds construction in West Bank settlements.

“Originally, the companies targeted were only those with business in the West Bank or the Golan Heights. Recently we’ve seen an escalation,” Reisner said. “Even if your project has nothing to do with the West Bank, some companies say ‘ah you have other projects in the West Bank and we don’t want to do business with you.'”

Israeli leaders are split on how to contend with threats of sanctions. Finance Minister Yair Lapid cautioned in late January that even a partial European boycott of Israel could reduce exports by close to $6 billion. Lapid and Justice Minister Tzipi Livni have urged Prime Minister Benjamin Netanyahu to reach a peace agreement with the Palestinians as a way of avoiding international isolation.

“If there is one thing the world doesn’t understand it’s the settlements,” Livni told Israeli Channel 2 TV News. “And the negotiations are the wall stopping this wave [of boycotts].”

Who’s to blame?

Hardliners in Israel, including Netanyahu, have hinted that boycotts of Israel are motivated by anti-Semitism.
“Attempts to impose a boycott on the State of Israel are immoral and unjust,” Netanyahu said at a recent cabinet meeting. “They cause the Palestinians to adhere to their intransigent positions and thus push peace further away.”
Settler spokesman Dani Dayan blamed US Secretary of State John Kerry for the current European calls to isolate Israeli businesses involved in settlements. Kerry warned at the Munich Security Conference earlier this month of “an increasing delegitimization campaign that has been building up…There are talks of boycotts and other kinds of things.”
“The US has in the past legislated against the Arab boycott of Israel,” Dayan said, referring to a 1977 law signed by former US President Jimmy Carter that imposed fines on American companies cooperating with Arab calls to isolate Israel.
“I would like to see the US Congress pass legislation against this current boycott,” Dayan added. “I would like to see Kerry warning European ambassadors that the US is against a boycott. When he doesn’t do these things, and only talks like a pundit, I cannot avoid the conclusion that he is cooperating with the boycott.”

According to the Israeli daily Yedioth Aharonoth, Netanyahu convened his ministers last weekend to discuss the threat of boycotts. The newspaper reported that at the meeting, Minister of Strategic Affairs Yuval Steinitz proposed searching for covert links between groups boycotting Israel and terrorist organizations. The offices of Netanyahu and Steinitz declined to comment.

Business as usual?

In Ramallah, Hanan Ashrawi, a member of the Palestinian Liberation Organization’s Executive Committee, welcomed European moves to reduce trade with Israeli companies involved in the settlements.
“Many of us are saying it’s about time that Israel be held accountable,” Ashrawi told DW. “We feel these are maybe the first tentative steps but they are significant.”

For now, the limited moves taken by some European companies have yet to create serious consequences for most Israeli businesses. Africa Israel spokeswoman Orly Rionely said losing investment from Norway had little effect on her company, whose business is mainly in Israel and Eastern Europe. However, she said, “the atmosphere is affecting all of us as citizens of Israel.”

David Elhayani, head of the Jordan Valley Regional Council of 21 settlements, said his constituents were already suffering greatly from reduced trade with Europe. He urged the government to compensate farmers for their losses because Israel’s leaders had encouraged settlers to move to the Jordan Valley, funded greenhouse construction and helped launch the area’s agriculture over the last four decades.

“We expect the government to help us and take responsibility,” Elhayani said. “We are here. We did not come like thieves at night.”

Palestinians Say Boycott-Israel Movement Is a Path to Peace

By Karl Vick, Time
March 05, 2014

As American-authored talks appear likely to fail, Palestinian leaders are turning to boycotts as their best chance for a violence-free peace with Israel. When the negotiations do collapse—an outcome they regard as inevitable—their plan is to resume a diplomatic assault

The visit to Washington by Israeli Prime Minister Benjamin Netanyahu did not appear to do much to enhance the chances for success in struggling peace talks with Palestinians. Netanyahu’s White House meeting on Monday was framed by a published warning from U.S. President Barack Obama to get serious about the talks, and a show of defiance from Netanyahu. Then the next day, the Israeli Premier pushed the onus on his opposite number, Palestinian Authority President Mahmoud Abbas, in a stem-winding speech to the American Israel Public Affairs Committee, or AIPAC, that divided the world into forces of light and darkness.

“If you look at it from the position of the Palestinians and the Israeli position, we’re pulling apart,” Xavier Abu Eid, spokesman for the Palestine Liberation Organization’s (PLO) negotiations unit, tells TIME. “It’s not like we’re getting closer.”

But that’s what most of the Palestinian leadership expected when Secretary of State John Kerry forced the two sides together in July. Only one member of the PLO executive committee voiced support for renewing negotiations on the terms Kerry offered — with no freeze on construction of Jewish settlements on Palestinian land and no agreement the 1967 borders would be the rough basis for a Palestinian state.

“We got nothing,” says Hanan Ashrawi, an executive-committee member, disregarding Israel’s release of hundreds of Palestinian prisoners as a gesture of good will. Still, polls show only half of Palestinians support the talks, and 70% believe they will fail — hardly an endorsement for Abbas, who overruled the PLO executive committee to agree to the talks, and has nothing yet to show for it.

“He’s trying to show seriousness of intent,” Ashrawi tells TIME. “But there are limits. He can go only so far without losing his standing, his support, his credibility. It’s not easy to go against Palestinian public opinion. We do not have a one-man show, a dictatorship. Public opinion is angry and … that increases support for alternatives, and that increases support for violence.”

“That’s why we got together and found support for other nonviolent means.”

Palestinian leaders are readying for a confrontation without violence. Once the talks fail — an outcome they regard as inevitable — the plan is to resume a diplomatic assault on Israel. The main venue will be the U.N., where the General Assembly in 2012 granted Palestine state status. The institution, broadly supportive of Palestine, offers other levers to pressure Israel, including access to the International Criminal Court.

“The U.N. is one place where you can show respect for multilateralism, international law, where you can empower the Palestinians, check Israeli violations and give people hope,” Ashrawi says. “So I described this is as a model, responsible legal approach — human approach — in order not to make the only alternative violence.”

The Palestinian public likes the idea, telling pollsters they would support a U.N. challenge to Israel even if it costs them crucial foreign aid.

At the same time, other activists are trying to pressure Israel economically, by identifying companies that do business with the settlements on occupied Palestinian territories. The effort was showcased in January when film star Scarlett Johansson stood by her endorsement of SodaStream, a beverage company that operates from a settlement, despite a hue and cry from activists calling for a boycott on such companies. Netanyahu mentioned Johansson twice in his AIPAC speech, which equated the boycott movement with anti-Semitism. “From antiquity to the Middle Ages to modern times, Jews were boycotted, discriminated against and singled out,” he said.

That historical reality exists beside another: the effort to deny financial support for settlements was pioneered years ago by Israeli Jews who refused to buy vegetables or wine produced on settlements. The effort to alter Israeli policy has since developed into a hydra-headed movement, which ranges from withholding investment from specific companies doing business in settlements because they are considered illegal under international law, to a broad boycott of all things Israeli. But even opponents acknowledge it appears to be picking up steam.

“I see it gaining ground,” says Ashrawi, “and I see how Netanyahu and others are reacting hysterically, trying to dismiss it but becoming obsessive about it, trying to say it’s not going to work because ‘We are the superior people in this part of the world, we are the people with values,’ unlike our barbaric neighbors, in other words. I’ve never heard such patronizing language.”

Israel should be grateful that Palestinian leaders are resorting to courts and diplomacy instead of violence, she says.

“And we don’t see it as a punishment,” Ashrawi adds. “We see it as a process of rectification, to address all the flaws, built in and imposed, that plagued the negotiations since 1991. This is a responsible, positive approach. Instead we’re getting bashed.”