On Sanctions, Israel Hasn't Seen Anything Yet

Clumsy Israeli propaganda campaigns won’t obscure the realization in Europe and among Palestinians that the occupation must cease to be cost-free for Israel.

Daniel Levy
Daniel Levy
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Daniel Levy
Daniel Levy

Israel’s governing coalition has been much seized of late by the issue of potential boycotts and sanctions in response to its policies in the occupied Palestinian territories. The centrist and rightist wings of Netanyahu’s coalition have been trading accusations over how severe the threat is, and who is to blame – is it the Livni-Lapid camp for acknowledging that boycotts are a problem, thereby encouraging the phenomenon?

Or is the Bennett-Miri Regev camp to blame for shouting from the rooftops about annexing the territories rather than quietly building on Palestinian hilltops as all Israeli governments have done for four decades? Israel’s cabinet even considered convening to officially respond to this threat. Public ministerial statements have followed familiar lines around whether to play nice with the peace process and deflect criticism (the centrist position) or to conduct a more effective PR and hasbara push-back campaign (the rightist position).

In the short term the right is correct in downplaying any sense of imminent economic disaster due to a boycott tsunami. In the longer term, the centrists get it in asserting that the globally connected Israeli economy and lifestyle will prove unsustainable as sanctions slowly but inevitably advance. But both sides are promoting an ill-informed and misleading discussion, perhaps intentionally. Much of that misinformation revolves around Europe’s role, unsurprising given Europe’s position as Israel’s leading trade partner and as the likely source of most sanctions momentum.

Israelis need to know five things about this so-called boycott debate that are too often obscured.

First, Europe is not an eager or enthusiastic boycotter of Israel. The reverse is true. The EU’s preferred approach is quite clearly to encourage Israel to make peace - with inducements and incentives. That point was re-iterated at December 2013’s EU Foreign Ministers’ meeting in which Israel was offered an unprecedented package of political, economic and security support within the context of a final status agreement, a “Special Privileged Partnership”. Official Israel, by the way, ignored this offer, as the French ambassador to Israel pointed out in Haaretz.

Thus far Europe has carried a very small stick indeed and encouraged Israel to gorge on the juiciest carrots it has available in its bilateral relations hamper – free trade, visa-free travel, and joint scientific cooperation. That ever-closer relationship is not mainly about promoting peace. Both sides benefit from the commercial relationship, and Europeans are loathe to reduce their high-tech, scientific or weapons dealings with Israel – something Israel has done an effective job in promoting. The image offered to Israelis of European governments and institutions chomping at the bit to cut links with Israel is a blatant lie.

Second, Europeans – whether governments or commercial enterprises – are bound (sometimes reluctantly) to follow a rules-based system. Israeli settlements are illegal and many Israeli policies in the occupied territories violate international law. Agreements signed with Israel are just that – agreements that cover the territory of the state of Israel, not activities Israel undertakes in territories it has either illegally annexed (East Jerusalem) or that it occupies (the West Bank). If Israel and Israeli commercial concerns facilitate an avoidance of the occupation by foreign entities then most boycott and divestment initiatives will grind to a halt.

The formal boycott, divestment and sanctions (BDS) movement launched by Palestinian civil society groups under the BDS National Committee umbrella pursues a comprehensive academic, economic and cultural boycott of Israel to achieve three declared goals of which ending the occupation is only one. Yet, the most successful local BDS initiatives have taken a more singular and targeted focus - namely the occupation and associated activities such as settlement enterprises. Israel was able to sign a new scientific cooperation agreement with the EU (known as Horizon 2020) because it agreed to exclude Israeli settlement entities.

But this is a distinction most Israeli politicians refuse to accept and one blurred in much Israeli commercial activity; every major Israeli bank, for instance, has a branch in the settlements. So as civil society and consumer groups globally draw attention to Israeli violations of international law, and to existing or recommended provisions in signed agreements which have commercial implications, European government and companies including pension funds, will increasingly be forced to act or face challenges in court as well as growing reputational risks.

This is not due to some irrational anti-Israel prejudice (or the more absurd and spurious accusation of anti-Semitism), it is because Europeans operate, thankfully, in an environment respectful of the rule of law. It is also not about singling Israel out, violators of environmental regulations, or abusers of certain human rights can also face forms of sanction and divestment.

Third, it is quite understandable that Israel and Israelis will not welcome the accumulating impact of smart and targeted BDS activism. Most Israeli defensive responses will however be ineffective at best, and often counterproductive. Despite this, Israel will waste taxpayers’ money on clumsy propaganda campaigns. Mostly those will generate much needed attention for BDS initiatives and help the smarter BDS groups to sharpen and improve their own performance.

But the only really effective response, short of ending the occupation itself, would be to ring-fence the Israeli economy proper from the settlement economy. But an “occupation-free Israel” brand cannot be created. The politics are stacked against it, and the settler economy does not exist distinct from Israel; it is an extension of the Israeli economy. The biggest challenge facing any Israeli pushback is that well-informed BDS advocates will win the argument on its merits. They are pursuing a legitimate and non-violent form of protest against an illegal and inhumane policy of occupation, and they have a compelling theory of change – Israel has failed to respond positively to carrots or even to the wise council of well-meaning friends by abandoning its settlement project. It therefore stands to reason that the reverse proposition is worth testing – that Israel will only respond to disincentives, that the occupation cease to be cost-free.

Fourth, the U.S. will not be sanctioning Israel. In fact, the U.S. will be working to block BDS advances wherever it can. Such is the nature of the Israel-U.S. relationship. To accuse Secretary Kerry of having threatened U.S. backing for boycotts is to intentionally distort. But the ability of the U.S. government to block both civil society BDS initiatives at home and institutional moves globally will recede over time.

Finally, what of the PLO leadership? BDS is not the strategic approach being pursued by the official and recognized leadership of the Palestinians. They do not, as part of a liberation strategy, go around the world using the platform at their disposal to advance the idea of imposing a cost on the state party that is denying their rights and freedoms. They do not use whatever influence, bully pulpit or embarrassment factor they can deploy with potentially supportive Arab governments, Muslim states, or members of the non-aligned movement to generate economic pressure on Israel or its supporters, including by way of the vast commercial investment and sovereign wealth fund resources at the disposal of the Gulf. The campaign that official Israel and its supporters deployed against Iran has not been attempted by the PLO against Israel.

The relationship of today’s Palestinian leadership to Western powers is one of supplicant not rights campaigner, requesting donor assistance to the Palestinian Authority not economic-political action to budge Israel. This numbs rather than removes the occupation.

The current trajectory is of an Israel on the slow-track to painful sanctions. By the time those sanctions bite enough for Israelis to re-think their politics, any possibility of a two-state outcome will likely have been rendered moot.

There are though two potential game-changers, both quite obvious. One would reverse the sanctions trend, the other, initially, accelerate it. A farsighted Israeli leadership that removes the occupation and allows for a sovereign Palestinian state would achieve the former. Note that this requires genuine de-occupation and should not be confused with more negotiations, or playing along with meaningless framework agreements that will simply re-arrange the matrix of control over Palestinians.

The other potential game-changer would be a Palestinian shift of strategy in which targeted BDS assumes priority, something Palestinian activists are advocating. It is not so hard to imagine that if a sanctions campaign targeting the occupation does not succeed fast enough, then it will be replaced by an ultimately successful sanctions campaign in favor of one shared democratic state. South Africa anyone?

Daniel Levy is the Director of the Middle East and North Africa Program at the European Council on Foreign Relations (ECFR). He is also a Senior Research Fellow at the New America Foundation.

A worker with flowers in the West Bank Jewish settlement of Petsael, Jan. 9, 2014. An international campaign to boycott settlement products has turned from a distant nuisance into an economic reality.Credit: AP

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