BDS Poses Little Threat to Israel Trade, Study Finds

While high quality of many Israeli exports mean consumers are hard pressed to find alternatives, a Brookings Institution study highlights that tourism, food products are still at risk

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File: Pro-Palestinian activists  stage protests at Sainsbury's, Starbucks and Tesco stores in London.
File: Pro-Palestinian activists stage protests at Sainsbury's, Starbucks and Tesco stores in London.Credit: CITIZENSIDE / TERRY SCOTT

That’s the conclusion of a study by Dany Bahar and Natan Sachs, two researchers at the Washington-based Brookings Institution published last week.

“A look at international trade data suggests that Israeli exports have evolved into being more unique and of higher quality, which implies that Israeli products cannot be substituted that easily by consumers,” they wrote. “This means that successfully boycotting Israeli exports would be much harder today.”

A key reason is that Israeli exports are weighted toward differentiated goods, such as specialized computer chips, that aren’t easily substituted by another product. In a2015, about half of Israeli exports were in the category, an increase of about 15 percentage points since 1985, says the study.

Bahar and Sachs also found that data on export quality showed that in 2015 40% of products were above median world standard, which also makes them more difficult to substitute. Finally, they estimated 40% of Israeli exports are intermediate goods that go into final products and consumers can’t easily identify.

By comparison, the two estimated in the decade to the mid-1990s, 60% of South Africa’s exports were so-called homogenous goods that were easily substitutable. Some 70% were below median world quality.

Bahar and Sachs warned, however, that tourism, farm products, simple manufactured products and some services could be vulnerable to a boycott.