Sanctioning Sharon

As the pro-war and anti-war camps are holding their summits, a consensus is emerging in Europe - including Britain - that the "road map" for peace in the Middle East would be a futile exercise without some "teeth". Israeli-Palestinian reconciliation may prove to be the glue that reunites the fractious Euro-Atlantic structures.

But while the United State is reluctant to impose a settlement on the Israelis - the specter of sanctions against the Jewish state has re-emerged in the Old Continent's corridors of power. A committee of the European Parliament is said to be laboring away at various scenarios of escalating sanctions against Israel. The European Commission may be readying its own proposals.

The views of the Conservative American administration are summed up by David Pryce-Jones, Senior Editor of National Review:

"Israelis and Palestinians face each other across the new ideological divide in a dilemma that bears comparison to Germany's in the Cold War ... Israel must share territory with Palestinians, a growing number of whom are proven Islamic terrorists, and who identify with bin Laden's cause, as he identifies with theirs ... The Oslo peace process is to the Middle East what Ostpolitik was to Germany and central Europe. Proposals to separate the two peoples physically on the ground spookily evoke the Berlin Wall."

Still, such sentiments aside, in the long-run, Muslims are the natural allies of the United States in its role as a budding Asian power, largely supplanting the former Soviet Union. Thus, the threat of militant Islam is unlikely to cement a long term American-Israeli confluence of interests.

Rather, it may yet create a new geopolitical formation of the USA and moderate Muslim countries, equally threatened by virulent religious fundamentalism. Later, Russia, China and India - all destabilized by growing and vociferous Muslim minorities - may join in. Israel will be sacrificed to this New World Order.

The writing is on the wall, though obscured by the fog of war and, as The Guardian revealed last week, by American reliance during the conflict in Iraq on Israeli intelligence, advanced armaments and lessons in urban warfare. The "road map" announced by President George Bush as a sop to his politically besieged ally, Tony Blair, and much contested by the extreme right-wing government of Ariel Sharon, calls for the establishment of a Palestinian state by 2005.

Israel is expected to promptly withdraw from all the territories it re-seized during the 30 months of second intifada. Blair has openly called on it to revert to the pre-Six Day War borders of 1967. In a symbolic gesture, the British government decided last week to crack down on food products imported from Jewish settlements in the West Bank and Gaza and mislabeled "Made in Israel" or "Produce of Israel". The European Union pegs the total value of such goods at $22 million.

Wariness of Israel in both Europe and the Arab world was heightened a few days ago, when National Infrastructure Minister, Yosef Paritzky, saw fit to inform the Israeli daily, Ha'aretz, about plan to revive a long defunct oil pipeline running from Mosul to Haifa, a northern seaport. This American-blessed joint venture will reduce Israel's dependence on Russian crude and the cost of its energy imports. It would also require a regime change in Syria, whose territory the pipeline crosses.

Partly to prevent further Israeli provocations of an extremely agitated and radicalized anti-Western Arab street, European leaders revived the idea of economic sanctions, floated - and flouted - a year ago. The EU accounts for one third of Israel's exports and two fifths of its imports. It accords Israeli goods preferential treatment.

In April 2002, in the thick of the bloody intifada, Germany and Belgium suspended military sales to Israel. Norway boycotted some Israeli agricultural commodities. The Danish Workers Union followed suit. The European Parliament called to suspend Israel's Association Agreement with the EU. Though Belgium supported this move, harsher steps were avoided so as to allow Colin Powell, the U.S. Secretary of State, to proceed with his peace mission to the Middle East.

Israel has been subjected to boycotts and embargoes before. In the first four decades of Israel's existence as well as in the last two years, the Arabs imposed strict market access penalties on investors and trade partners of the Jewish state. The United States threatened its would-be ally with economic and military sanctions after the Suez War in 1956, forcing it to return to Egypt its territorial gains in the desert campaign.

For well over a decade afterwards, Israel was barred from direct purchases of American weaponry, securing materiel through West German intermediaries and from France. After the Six Day War, French President Charles de Gaulle imposed an arms embargo on the country. Faced with Arab intransigence and virulent enmity towards Israel in the Khartoum Summit in 1967, the USA stepped in and has since become Israel's largest military supplier and staunchest geopolitical supporter.

Yet, even this loyal ally, the United States, has come close to imposing sanctions on Israel on numerous occasions.

In 1991, Yitzhak Shamir, the Israeli Prime Minister at the time, was reluctantly dragged into the Madrid Arab-Israeli peace conference by a victorious post Gulf war administration. He proceeded to negotiate in bad faith and continued the aggressive settlement policies of his predecessors.

In consequence, a year later, President George H.W. Bush, the incumbent's father, withheld $10 billion in sorely needed loan guarantees, intended to bankroll the housing of 1 million Jewish immigrants from the imploding Soviet Bloc. Shamir's successor, Yitzhak Rabin, succumbed to American demands, froze all new settlements and regained the coveted collateral.

Only concerted action by the EU and the USA can render a sanctions regime effective. Israel is the recipient of $2.7 billion in American annual military aid and economic assistance. In the wake of this round of fighting in the Gulf, it will benefit from $10 billion in guaranteed soft loans. It has signed numerous bilateral tax, trade and investment treaties with the United States. American sanctions combined with European ones may prove irresistible.

Israel is also finding itself increasingly on the wrong side of the "social investing" fence. Activist and non-governmental organizations are applying overt pressure to institutional investors, such as pension funds and universities, to divest or to refrain from ploughing their cash into Israeli enterprises due to the country's "apartheid" policies and rampant and repeated violations of human rights and international law.

They are joined by student bodies, academics, media people and conscientious Jews the world over.

According to The Australian, a petition launched last year by John Docker, a Jewish-Australian author and Fellow of the Australian National University's Humanities Research Centre and Christian Lebanese Australian senior lecturer and author Ghassan Hage of Sydney University's Anthropology Department, "calls (for a) ban on joint research programs with Israeli universities, attending conferences in Israel and disclosing information to Israeli academics."

It is one of many such initiatives. In the long run such grassroots efforts may prove to be have the most devastating effects on Israel's fragile and recessionary economy. Multinationals are far more sensitive to global public opinion than they used to be only a decade ago. So are governments and privatized academic institutions.

Israel may find itself ostracized by consent rather than by decree. Already a pariah state in many quarters, it is being fingered by European left-leaning intellectuals as being in cahoots with the lunatic fringes of Christian and Jewish fundamentalism. Yet, if sanctions cause a recalcitrant Israeli right to trade occupied land for a hitherto elusive peace, history may yet judge them to be a blessing in disguise.

World in Conflict and Transition
Articles and essays about countries and economies in conflict and transition.