Beyond rockets and air strikes: The Israeli-Palestinian trade war


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Israel blocked Palestinians exports from leaving the territories on February 9, in another chapter of the trade war they have been fighting since September, when the Palestinian Authority banned Israeli veal from entering its territories. The battle threatens both Israeli farmers and particularly the already fragile Palestinian economy, which is highly dependent on the Hebrew state.


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Beyond rockets and air strikes, Israel and the Palestinian authority have been fighting another kind of battle. A month after US president Donald Trump unveiled his controversial Middle East plan, the conflict between Israel and the Palestinian Authority (PA) has now reached a state of full-blown trade war.

On February 12, the PA led by President Mahmoud Abbas hailed "a victory for International law" as the United Nations High Commissioner for Human Rights (UNHCR) office released a list of 112 companies it said are complicit in violating Palestinian human rights by operating in Israeli settlements in the occupied West Bank.

This first-ever international attempt to name and shame businesses was slammed as "shameful" by Israel, where officials fear the list could be used to boycott firms. The move could add a new chapter to tensions with the Palestinian Authority.

Blocking produce

Three days before the UNHCR report, the Israeli military ignited another battle as they announced the blocking of all West Bank agricultural goods, the Times of Israel reported. Following Defence Minister Naftali Bennet's press release on February 9, the military said it would not allow Palestinian farmers to transfer products through the Allenby Bridge, West Bank's only direct export route to the world and its sole border with neighbour Jordan.

According to the Coordination of Government Activities in the Territories (COGAT), a unit of the Israeli ministry of defence responsible for the civil activities in the Palestinian territories, this was an immediate response to the "Palestinian boycott of veal, which has seriously harmed Israeli cattle farmers".

For as negotiations with the Hebrew state fell apart in late 2019, Palestinians had decided in September to ban all Israeli calf from entering its territories, a surprise decision that saddled Israeli farmers with huge losses.

'Calf war' part of Palestinian 'disengagement' strategy

The veal ban is only part of a political, bureaucratic and economic "disengagement" strategy conceived by Abbas' Prime Minister Mohammad Shtayyeh. Originally an economist, Shtayyeh is trying to push for higher independence for the Palestinian territories, whose economy is completely dependent on its Israeli neighbour – especially imports, exports and basic goods.

"We are exercising our natural right to diversify our markets, encouraging direct imports in order to strengthen our economy," Palestinian Economy Minister Khaled Al-Assili said on what the local media nicknamed the "calf war".

Escalations and retaliations

Under pressure by Israeli farmers, Prime Minister Benyamin Netanyahu retaliated: in early February, the Hebrew state banned all produce imports from the West Bank. The Palestinian Authority quickly struck back, banning multiple Israeli products from its territories, such as vegetables, fruits and beverages.

Deprived of their own ports and airports, Palestinians can only export products via Israel's ports, such as the Ashdod and Haifa ports, as stipulated by the 1994 Paris protocol regulating trade issues, where Palestinian products, including dates and olive oil, are then sent mainly to Europe and neighbouring Jordan.

The latest Israeli measures are "very dangerous", Palestinian Minister of Agriculture Riyad al-Atari said. "There will be negative effects, but the negative consequences will also affect the Israeli economy," he added.

Israeli and Palestinian economies are deeply intertwined, despite tensions. The latter imported $600 million worth of Israeli produce in 2018 – 71 percent of the sector's Palestinian importations, according to the latest data. According to the Palestinian Ministry of Economy, it also exported $88 million worth of produce to the Hebrew state – marking 68 percent of Palestinian exports.

As the 'calf war' is expected to continue, the PalesRead More – Source