Will it benefit or backfire? The risks and rewards of trade relations with Israel
By Aditya Bhargava
Israel has been a topic of debate for decades, with various questions arising about its viability and legitimacy as a state. Moreover, it’s recent actions in the West Bank and the Gaza Strip have sparked widespread controversy, leading a few countries to especially reconsider their trade relations with Israel as they may have to face various repercussions such as questions upon their global reputation and strained relations with other allies. Such a relation may prove to be more disadvantageous than beneficial, and other relations may be compromised, especially if they maintain extensive networks within the Middle East.
One country facing such complications is Russia. For the second year running, their trade with Israel—largely supplying Israel with high-grade weaponry and arms—has exceeded over 5 billion dollars. Conversely, Syria and Russia also hold close relations that run far deeper than Russia’s relations with Israel. In fact, Russia holds extremely high stakes in Syria, owning large swathes of land, which favourably impacts Syria’s GDP. With its extensive and long-running relations, Russia has backed the Bashar Al Assad regime in Syria, which coincidentally has anti-Israel sentiments. This has put pressure on Israel and effectively forces Syria into a dilemma. Syria can either retaliate and attack Israel, risking relations with a country they are indebted to, or maintain favourable relations with Russia but face direct violence from Israel. If Russia is to continue trade with Israel, then it risks its assets in an already volatile Syria. Thus, by maintaining trade relations with Israel, Russia’s close ties with another country are compromised.
Another reason why trade relations with Israel may put a country at a disadvantage is its high vulnerability to regional disputes. Israel’s unique position in the Middle East is a large component of why they are the US's closest allies, providing a pathway for the US to pursue their own objectives (such as imposing sanctions on Iran). However, as an “outsider” country - only 6 out of 18 countries in the Middle East formally recognize Israel - it is extremely susceptible to regional disputes, especially from powerful organizations such as Hezbollah. Such organizations, by confiscating goods or intercepting carrier ships, pose a significant threat to Israel’s ability to grow its economic power. It also risks a spillover, wherein another region’s political problems may spread out to Israel. Such political uncertainty is not helped by Israel’s determination to carry out raids upon Syria while exploiting Lebanese sovereignty. This may lead to UN interventions, often consisting of sanctions and limitations on exports. Thus, regional disputes may affect Israel’s economic power, and consequently affect its trade.
Alternatively, building relations with Israel may increase a country’s prosperity because of Israel’s ties with the USA. Israel has had close relations with the USA since the country’s formation, serving as the USA’s main ally in the Middle East and occasionally carrying out White House driven objectives. Thus, it may be plausible to assume that the USA is dependent upon Israel’s well-being. This can be seen in the power of the Israel lobby upon American political figures, as well as Israel’s effect upon US actions in the Middle East. For instance, the Iraq War in 2003 was largely due to strained relations between Israel and Iraq, leading to US involvement. Meanwhile, US presidents often seem pressured to maintain relations with Israel. Obama was forced to, at the very least, support Israeli objectives despite sharing mutually antagonistic relations with Benjamin Netanyahu (the Israeli Prime Minister). Thus, it may seem prudent for a state to pursue trade with Israel and consequently build relations with the USA. This has proven especially advantageous for China, to whom Israel exports $4.8 billion worth of products. It is no secret that the USA and China have strained relations, mostly due to the fight for economic power. In fact, the USA has attempted to restrict Chinese influence by sanctions, but, for the most part, such efforts have been in vain. Israeli relations with China also lower the chance of the US taking any drastic measures. Given the degree of interdependence between Israel and China, any harsh actions will not only affect China, but also Israel and the USA.
Countries should perhaps refrain from extensive trade due to the vast number of controversies surrounding the region, as well as the volatility of Israel’s well-being due to the tension between non-state actors such as Hezbollah and political tension with neighbouring countries. Although trade relations with Israel may occasionally be beneficial, trade relations with Israel may actually blemish a country.
Citations: