The Arab boycott against Israel is the longest-functioning example of economic sanctions against a state. It both constituted a supplement to military force against Zionism and was a means of hampering Israel's economic development. The boycott also enabled greater Arab integration at a time when pan-Arabism was the official policy of several Arab states.
The official boycott was declared in the *Arab League Council in December 1945, almost three years before Israeli independence, but the roots were established long before. In 1910, the Haifa newspaper al-Carmel encouraged "an economic boycott against the Jews by not purchasing from or selling to them and not leasing properties." Since the Arab Revolt in Palestine in 1936, the boycotts against Jewish merchandise had gathered strength.
Scholars speak of three different boycotts. First, the primary boycott barred direct Arab commercial and financial transactions with the Jewish community in Palestine, and later Israel, as well as postal, radio, and telegraphic communications. After the declaration of Israeli independence, the secondary boycott blacklisted companies that invested in Israel or traded with Israel. A land, air, and sea blockade was imposed. In 1950, the Arab League Council declared that all ships carrying goods or immigrants to Israel would be blacklisted. The tertiary boycott targeted companies that traded with boycotted companies. Finally, before the Oslo accords of 1993, there was also what has become known as the voluntary boycott. Countries such as Japan voluntarily abstained from close relations with Israel for fear of being boycotted or damaging their own economic relations with the oil-producing countries.
The Arab League Council Resolution 357 of May 19, 1951, established a Central Boycott Office (cbo) in Damascus, along with a Boycott Commissioner. Liaison officers had branch offices in each member state and third party offices were opened, for example, in 1960, in New Delhi. By 1954, 5.7 per cent of the Arab League budget was allocated to the cbo in Damascus, and by 1979, the cbo had 20 employees, five with diplomatic status. In 1981 the boycott office in Damascus was supplemented by an Islamic Office for the boycott of Israel, affiliated to the Islamic Conference Organization. Non-Arab states that actively participated in the boycott included Bangladesh, India, Malaysia, Mali, Pakistan, and Uganda.
The cbo chaired a conference biannually in one of the Arab capitals. It adopted decisions regarding companies considered in breach of the boycott, coordinated policy, and drew up blacklists. Letters were then sent out to offending companies demanding proof they had broken off relations with Israel. If the company did not comply, it was boycotted by the Arab League. No private or public Arab body was allowed to trade with the company under threat of fines, imprisonment, and confiscation of goods. These meetings were backed up by legislation in each member state. Companies seeking new trade relations with the Arab world had to go through a long procedure related to the boycott.
Boycott activities intensified throughout the 1950s. On December 11, 1954, the Arab League passed the Unified Law resolution for the boycott of Israel. The new law prohibited all Arab individuals and entities from dealing with agencies or persons working on behalf of Israel or with foreign companies and organizations having interests, branches, or agencies in Israel. The overriding aim was to prevent investment so that the country could not develop. Exports of Arab goods to countries re-exporting to Israel were also prohibited. In 1958, the boycott was extended to goods produced from Israeli raw materials as well as foreign ships that had visited an Arab and Israeli port in the same sailing.
Each member state had additional legislation. Egypt authorized the seizure and impoundment of cargoes with Israeli destinations, regardless of the ship's nationality. On February 6, 1950, Egypt banned ships suspected of violating the blockade of Israel from the Suez Canal. By 1955 this list included 104 ships. Egypt was particularly careful to prevent the shipment of strategic goods, such as oil, to Israel. In November 1953, it extended the term contraband to include "any foodstuffs or other commodities likely to strengthen the war potential of the Zionists." Captains of vessels and tankers had to guarantee that they would not discharge any of their cargo in an Israeli port and had to submit log books.
In the course of the 1960s, a growing number of American films and actors, including Marilyn Monroe, were banned because the films allegedly contained Zionist propaganda or because the actors were considered pro-Israel or helped collect donations for Israel. Louis Armstrong was banned for performing in Israel.
There were notable successes for the boycott. A British Foreign Office report records that the Lebanese Department of Civil Aviation had approached boac, Cyprus Airways, klm, sas, Air France, Pan American, and twa to boycott Israel and not to invest in the country. In 1957, the Arab League announced that its members would henceforth deny overnight and landing rights to Air France. After resisting the boycott for one and a half years, Air France finally caved in at the end of 1958.
Israel invested considerable effort to convince the international community to ban the boycott. On September 1, 1951, the un Security Council demanded that Egypt terminate its restrictions on navigation through international waterways. The resolution was ignored. The fight against the boycott was a lost cause because of the strength of resistance to Israel in the Islamic world. Israel's solution was to develop an economy detached from its neighbors – a process started in 1936 with the construction of the port of Tel Aviv. Avoiding the secondary and tertiary boycotts was more complex.
The success of the secondary and tertiary boycotts depended on the support of other states. The boycott organizers placed economic pressure on companies, which were in turn asked to put pressure on their governments, or at least not to implement anti-boycott legislation. There were a number of international protests, although the Soviet Union tried to intensify the boycott. In 1950, Britain, Norway, and the U.S. complained to Egypt about the banning of tankers from the Suez Canal. A Security Council resolution of 1956 ordered Egypt to lift the blockade. Except for the years 1957–59, in the wake of the Suez War, the Canal remained closed to Israeli ships and ships bound for Israel.
There is no clear legal consensus on the boycott. Arabs argued that the laws of war entitled a state both to impose an economic boycott and take action against non-neutral third parties. Israel argued that the secondary and tertiary boycotts contradicted international agreements such as articles 11 and 12 of gatt and the Treaty of Rome. In 1976, the U.S. started passing anti-boycott legislation, regulations, guidelines, and executive orders. In 1977, anti-boycott provisions were added to the Export Administration Act. Some European countries such as France, Germany, and the Benelux countries also passed some legislation.
In February 1975, the Arab League adopted a resolution calling for the intensification of the boycott, particularly in the sphere of international financing. Fourteen banks were on the list, including some of the largest and most famous international banks. In one case the Kuwait International Investment Company (kiic) worked with Warburg and Rothschild on a $75 million international bond issue to raise capital for Volvo and the state of Mexico. The cbo forced the kiic to withdraw the loan issue. Entering an indirect contractual arrangement as co-manager with a blacklisted underwriter constituted a violation of the boycott.
It was during the 1970s that the first cracks became apparent in the primary boycott. Even at the height of the boycott, there was some trade with Jordan through the "Open Bridges" on the Jordan River and the "Good Fence" between Israel and Lebanon after 1975. There was always trade through third parties.
The secondary boycott was also often erratically applied. Towards the end of the 1970s six Arab League members, Algeria, Mauritania, Morocco, Somalia, Sudan, and Tunisia complied only with the primary boycott. In the late 1980s, despite the fact that the cbo refused to remove Coca-Cola from the blacklist, the company claimed that it was doing business with 11 Arab states, launched an advertising campaign in Bahrain, and opened bottling and canning plants in several Gulf states.
The peace accords between Egypt and Israel in 1978 included an undertaking to cancel the boycott. In reaction, the Baghdad Arab Summit Conference in March 1979 decided to impose economic sanctions against Egypt. However, even after the peace treaty most of Egypt continued with the boycott de facto. In the five years after the peace treaty, American companies received nearly 500 requests for boycott compliance. As late as 1988, three Egyptian companies with direct contacts with Israel were blacklisted.
The 1982 Israeli invasion of Lebanon gave the boycott more impetus. By 1987, 26 countries in addition to the 22 member states of the Arab League boycotted Israel economically.
The Gulf War marked a watershed. Although 1991 saw an intensification of the boycott, with another 110 companies added to the list, as a reaction to the large-scale Jewish immigration to Israel from the former Soviet Union, this was a period of contradictory signals. Many important companies such as Coca-Cola were removed and there were a string of informal meetings between Israeli and Gulf officials. Saudi Arabia started to link the boycott to Israeli withdrawal from the West Bank and Gaza Strip. After the Declaration of Principles between Israel and the plo in 1993, the cbo was hardly able to raise a quorum. By 1994, Qatar confirmed negotiations with Israel to pipe natural gas to Israel via European destinations. On September 30, 1994, the Saudi foreign minister announced the cancellation of the indirect boycott on Israel and on October 27, 1994, following the peace treaty with Israel, Jordan canceled the boycott. By the end of 1996, 14 Arab states had openly gone against boycott. Only eight Arab states continued. The voluntary boycott crumbled in Japan, China, and Korea. Most of the major multi-nationals on the boycott list, including Cadbury, Coca-Cola, Colgate-Palmolive, Ford, Fuji, Jaguar, Schweppes, and Xerox were removed.
The treaty put the Palestinians in a difficult position. Continuing the boycott was important as a bargaining chip for final status negotiations but obstructed raising development money. However, the stalemate in the peace process in 1997 revived the boycott. Saudi Arabia again announced penalties for importing Israeli goods. Then, after the breakdown of negotiations with the Palestinians in 2000, several Arab states abruptly ended their contacts with Israel and reinforced the boycott. In March 2001, Arab heads of state reactivated the boycott in Amman, Jordan. As a result, Israeli trade representations in the Gulf states and parts of North Africa closed down. After years of declining representation, 19 Arab countries attended the 72nd conference of the cbo in April 2004. There were calls for a new boycott on Coca-Cola and Ford but anti-boycott laws had been tightened and Arab governments were more reluctant to enforce the provisions.
Trade between Egypt and Israel remained low and decreased considerably since the outbreak of the 2000 Intifada but was not discontinued. Trade levels between Jordan and Israel, on the other hand, increased rapidly after the creation of Qualified Industrial Zones offering special tax breaks for export items produced by Israeli-Jordanian ventures.
Apart from the primary boycott that was still enforced in states with no relations with Israel, trade unions and professional associations in every Arab country still implemented blacklists against individuals and companies with ties to Israel. These associations were particularly strong in Jordan and Egypt, the only Arab countries with full relations with Israel. For example, in 2004 the Egyptian pharmaceutical union called for a boycott of a U.S. drug company. In Jordan and Egypt, however, the trade unions and professional associations were more effective in implementing the boycott within their own countries than pressuring foreign companies or countries. While the voluntary boycott has all but disappeared, the primary boycott was still widespread in countries with no formal relations with Israel.
K.W. Abbott, "Coercion and Communications: Frameworks for Evaluation of Economic Sanctions," in: New York University Journal of International Law and Politics, 19 (1987): F.H. Baisu, Al-Watan al-Muhtall Bayna Mutallabat Daʿm al-Sumud wa-Iltizamat al-Muqataʿa al-ʿArabiyya, 42 (June 1985); Y. Ben-Porath, "The Entwined Growth of Population and Product, 1922–1982," in Y. Ben-Porath (ed.), The Israeli Economy – Maturing through Crises (1986); G. Feiler, From Boycott to Economic Cooperation: The Political Economy of the Arab Boycott of Israel (1998); J.T. Hamza, Al-Muqataʿa al-ʿArabiyya li-Isra'il (1973); un Resolutions, Security Council, Series 1 and 2, compiled and edited by D.J. Djonovich, v–viii.
[Gil Feiler (2nd ed.)]