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    Glossary of Key Terms and Events in Israel's History
Arab Economic Boycott   

The Arab Economic Boycott was initiated in 1946 by the newly formed League of Arab States. The boycott was aimed at preventing the continued growth of the Jewish community in Mandate-era Palestine by boycotting the goods and services produced by Jews in the region. After Israel’s establishment in 1948, the Arab League expanded the boycott in an effort to undermine Israel’s economic viability.

The Arab boycott operated on several levels, targeting not only Israel, but also governments, companies, organizations, and individuals around the world with ties to Israel. The boycott weakened through the 1980s due to the decline in Arab economic power. The 1979 Egyptian-Israeli peace treaty also served to further lessen the effects. The greatest change occurred after the signing of the Israel-Palestinian Declaration of Principles in September 1993, the start of the so-called “Oslo Process” where there was significantly less adherence to the boycott by Arab countries.

The United States was the only nation in the world to adopt comprehensive anti-boycott legislation. U.S. legislation prohibits American citizens or businesses to refuse to do business with Israel at the request of a foreign government and prohibits furnishing information about business relations with Israel or blacklisted companies at the request of a foreign government.

Unlike the United States, response to the Arab boycott of Israel in Europe and the Far East was ambivalent at best. In the 1970s, the European Economic Community (EEC) included anti-boycott provisions in the EEC constitution and anti-discrimination clauses in economic agreements with Arab states but did not enforce these clauses.

In the Far East, the impact of the Arab boycott on Israeli relations with Japan and Korea was severe. Until June 1998, no Japanese government minister had ever visited Israel – although today Japanese products are ubiquitous throughout Israel. Likewise, South Korea’s strong compliance with the Arab boycott of Israel made contact non-existent.

From its initiation, the Arab boycott undoubtedly impaired Israel’s economic growth, but it has never been able to thwart that growth altogether. While the actual cost is impossible to quantify, the Federation of Israeli Chambers of Commerce estimates that due to the boycott, Israel’s annual exports were 10 percent smaller than might otherwise be expected. Despite the restrictions placed upon it, Israel has grown into a technological power, with strong economic ties to many countries.

While the scope and power of the official Arab boycott has lessened in the past decade, organized campaigns by pro-Palestinian groups in Europe and the United States promoting grassroots economic sanctions against Israel have gained momentum. Among these efforts are calls for the boycotting of Israeli goods, campaigns to prevent the participation of Israeli professionals and academics in international conferences and projects, and initiatives to “divest” university, church and city investment portfolios from Israeli companies and companies that do business with Israel. Most of these initiatives, particularly divestment campaigns on campuses and city councils, have failed. However, the campaigns have been somewhat effective among several mainline Protestant church groups in the United States and a number of British trade unions. In 2005, the Presbyterian Church USA, for example, passed a resolution calling for divestment which has since been overturned. In 2007, the British National Union of Journalists and the University and College Union, voted in favor of resolutions supporting boycotts of Israel. (The UCU later determined that any discussion of a boycott violates British anti-discrimination law and announced they would not implement the resolution. In 2008, the UCU again voted in favor of an academic boycott, but again did not take action. In early 2009, ,the U.S. Campaign for the Academic and Cultural Boycott of Israel (USACBI) was formed by a dozen professors in California. Among other things, USACBI calls on American colleges and universities to refrain from associating with Israeli universities. It should be noted that these campaigns are unlikely to have a serious practical impact on Israeli academics, universities and companies doing business with Israel, however they serve the public-relations goals of anti-Israel activists by publicly demonizing and singling out Israel. Such boycott initiatives are not covered by American anti-boycott legislation.
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