UK boycott may have limited economic impact but could chill Israeli exports

Israeli exports of goods and services totaled about $159 billion, of which about $250 million comes from Judea, Samaria, eastern Jerusalem, and the Golan Heights.

By Pesach Benson and Omer Novoselsky, TPS

Britain’s restrictions on Israeli communities in Judea and Samaria are unlikely to significantly affect Israel’s overall exports but could disproportionately hurt agricultural producers in the targeted areas and discourage foreign importers from doing business with Israeli companies, a senior Economy Ministry official told TPS-IL.

Britain and 11 other countries announced the measures Tuesday.

Foreign Secretary Ed Miliband said Britain would ban imports from Israeli communities that Britain considers illegal under international law.

Additional measures would sanction companies and individuals involved in financing, construction, infrastructure, and real estate there.

Britain will also restrict advertising and marketing of property in the communities.

Iceland, Ireland, Denmark, Norway, Spain, Poland, Portugal, Finland, France, Canada, and Sweden said they were joining the effort.

Israeli exports of goods and services totaled about $159 billion, of which about $250 million comes from Judea, Samaria, eastern Jerusalem, and the Golan Heights.

Roey Fisher, head of the Foreign Trade Administration at the Economy and Industry Ministry, told The Press Service of Israel.

Fisher told TPS-IL the greater concern is not necessarily the direct loss of British or European sales.

Rather, he warned that foreign importers could become reluctant to deal with Israeli companies because they are uncertain about the origin of products.

‘Chilling Factor’ on Exports

“The main effort is against the ‘chilling factor’ of these measures,” Fisher explained.

“An English importer might conclude, ‘I don’t know what the Green Line is and which side the product is from, and I should not bother with it at all.’”

The Green Line refers to the demarcation line from the Israel-Jordanian armistice agreement of 1949.

The Foreign Trade Administration is already hearing concerns from foreign trade officials and exporters that the measures make it harder for Israeli companies to explain their products and find customers, Fisher said.

A significant portion of goods produced in the affected areas are exported to the European Union and Britain, according to Fisher.

Consumer goods are particularly sensitive because they are sold directly to customers, while industrial products may be less exposed because their buyers are often businesses or institutions.

Over the past two weeks, the Foreign Trade Administration has helped affected exporters identify alternative markets.

The administration has representatives in 55 locations worldwide working to find new distributors and long-term customers.

Beyond Europe, exporters are looking to markets including India, where there is growing interest in Israeli dates.

Fisher also cited the United Arab Emirates, where Israeli producers may have a competitive advantage, as well as Chile and Argentina, which have shown interest in Israeli products.

The direct impact of the British measure would be concentrated in goods rather than services, particularly fresh agricultural produce, Fisher said.

He singled out Israel’s date industry as especially vulnerable.

“Israel is a date powerhouse,” Fisher said. “Israel is a leading factor in the global date market.”

Fisher expects the British government to begin implementing its measures in “six to nine months.” Spain implemented a boycott in January, while Dutch restrictions will take effect on Sept. 22.

The ministry is also offering a specific assistance program for exporters from Judea and Samaria and the Golan Heights, including grants of up to NIS 200,000 ($66,000).

Pointing to ongoing commercial activity between Israel and Britain, Fisher stressed, “Despite all the noise around, when money talks and there are economic and competitive interests, we continue.”