Israel is witnessing a significant uptick in trade with Arab and Muslim countries, defying recent European Union calls to reconsider economic ties amid ongoing conflicts in Gaza. This unexpected growth highlights shifting dynamics in international trade relationships.
Despite heightened tensions and international scrutiny, Israeli foreign trade has expanded with Arab nations and 14 Organisation of Islamic Cooperation (OIC) member states during the first nine months of this year. The total trade value with these countries reached approximately $7 billion, accounting for 10% of Israel’s global trade.
The surge contradicts popular calls to boycott Israeli products, emphasizing the resilience and adaptability of Israel’s trade strategies. Critics argue that targeting Israeli products might be more effective, given that imports from 19 countries reached $2.3 billion.
EU’s Stance: Calls for Trade Reevaluation
Several European countries, including Ireland, Spain, Belgium, and Slovenia, have urged the EU to rethink its trade relations with Israel. These calls are primarily driven by Israel’s ongoing military actions against Palestinians in Gaza.
Ireland’s Push for Import Bans
Ireland stands out as a vocal advocate for boycotting Israeli goods, particularly those produced in illegal settlements on Palestinian land. As one of Israel’s top trading partners, ranking 8th, Ireland’s stance could influence broader EU policies.
The Irish government has proposed banning imports of goods from these settlements, aiming to pressure Israel economically. This move aligns with global efforts to address human rights concerns through economic means.
Arab and Muslim World’s Growing Economic Ties
Contrary to European pressures, trade between Israel and several Arab and Muslim countries has flourished. Countries like the UAE, Egypt, Jordan, Morocco, and Bahrain have significantly increased their trade volumes with Israel.
Noteworthy Trade Partnerships
- Bahrain: Trade with Israel surged tenfold.
- Morocco: A 53% increase in trade volume.
- Egypt: Trade grew by 52%, despite ongoing conflicts.
- UAE: A modest 4% rise in trade activities.
This robust growth underscores the pragmatic approach these nations are adopting, prioritizing economic benefits over political disagreements.
Turkey’s Trade Freeze: A Singular Case
Turkey is almost the only Islamic country to impose a ban on exports to Israel. In April, Turkey listed 54 items, including aviation fuel, iron, and ceramics, halting trade in May following municipal elections.
Impact of Turkey’s Trade Freeze
- Export Decline: Israeli exports to Turkey dropped by 32%.
- Import Decline: Imports from Turkey decreased by 15%.
- Trade Ranking: Turkey fell from 5th to 15th in Israeli trade lists.
This move marks a significant departure from the otherwise growing trend of increased trade between Israel and Muslim-majority countries.
Discrepancies in Trade Data Reporting
There are notable differences between Israeli trade data and reports from Arab countries. For example, Egypt’s reported trade with Israel up to July amounted to $1.883 billion, while Israeli data cites only $431 million for the same period.
Detailed Trade Breakdown with Egypt
| Goods Exported by Egypt | Value (USD) |
|---|---|
| TV Screens | $30 million |
| Cement | $29 million |
| Fertilisers | $16.5 million |
| Fruits and Vegetables | $12 million |
| Polyethylene Powders | $6 million |
| Orange Juice | $4 million |
| Clothing | $3 million |
| Aluminium Alloy Bars | $2 million |
| Others | Various |
This table highlights the diverse range of goods Egypt exports to Israel, far exceeding the figures reported by Israeli authorities.
Strategic Implications for Israel’s Economy
The increase in trade with Arab and Muslim countries helps mitigate the impact of decreased trade with some European nations. However, the overall exports and imports for Israel saw a slight decline of 6% and 5% respectively compared to last year.
- Diversification: Expanding trade partners beyond traditional Western allies.
- Economic Resilience: Balancing trade deficits by strengthening ties with the Middle East.
- Political Leverage: Using economic relationships to navigate international pressures.
Future Prospects: Strengthening or Struggling?
Looking ahead, Israel’s trade strategy seems focused on deepening economic ties with supportive Arab and Muslim nations while managing the pressures from the EU and other Western countries.
Potential Growth Areas:
- Technology and Innovation: Leveraging Israel’s tech prowess to attract more trade partnerships.
- Agricultural Imports: Increasing imports of essential goods like vegetables and cement from neighboring countries.
- Energy Sector: Expanding collaborations in the natural gas and renewable energy sectors.
However, political instability and ongoing conflicts could pose challenges to sustaining this growth trajectory.
Public and Business Reactions: Mixed Sentiments
The business community in Israel largely views the increased trade with Arab and Muslim countries as a positive development, offering new opportunities and revenue streams. Conversely, public opinion is divided, with some supporting the economic gains while others remain concerned about the ethical implications.
Business Perspective:
“We’re thrilled with the growth in trade with our neighbors. It opens up new markets and strengthens our economic standing,” said a spokesperson from the Israeli Chamber of Commerce.
Public Sentiment:
Social media and public forums reflect a mix of optimism and skepticism. While some celebrate the economic benefits, others question the long-term sustainability and ethical considerations of these trade relationships.
Israel’s expanding trade with Arab and Muslim countries showcases a strategic shift in its economic policies, aimed at strengthening regional ties amidst international pressures. While the EU’s calls for boycotts pose challenges, the resilient growth with supportive nations highlights Israel’s adaptability in a complex geopolitical landscape.
