Last November, when the European Union announced the implementation of long-standing regulations regarding the labeling of products from Israeli settlements, the government of Prime Minister Benjamin Netanyahu played one of its biggest cards, suspending contact with the EU regarding the Israeli-Palestinian conflict. After nearly three months, which saw accusations of European anti-Semitism and Congressional condemnation of the European decision, Netanyahu backed down. The EU held to its position and refused to grant Israel any compensation for it. The episode reveals the enormous amount of untapped potential for altering the status quo with regard to Israel’s occupation of the West Bank and its siege on the Gaza Strip.

The EU decision to label certain products as coming from Israeli settlements was both the long-delayed implementation of existing policy and a show of impatience with the Netanyahu government’s intransigence on the peace process. It was also a counter to the attempts by Netanyahu and his supporters, particularly in the United States, to blur the line between Israel within its internationally recognized borders and the settlements in areas captured in 1967.

That’s why Netanyahu reacted so harshly to a seemingly minor decision, one which would have only a negligible impact on the settlements’ economy, let alone all of Israel’s. Netanyahu went after the EU labeling regulations with every tool he could realistically employ. Israel could, of course, take measures to restrict trade with Europe or even break off all diplomatic relations. But since the EU is Israel’s top trading partner, has a great many friendly trade deals with Israel, and accounts for some 27% of Israel’s export business, that would be unwise to say the least.

Netanyahu did not just climb down from his position, he unconditionally surrendered. In a last-ditch effort, he tried to get EU Foreign Affairs chief Federica Mogherini to state that there would be no further EU measures in this vein, which Mogherini flatly refused to do. Netanyahu was left with the choice of a serious erosion in EU-Israel ties or accepting the labeling measure and moving on. He chose the latter.

The labeling controversy is a reminder that Israel needs not only the EU, but the United States, a lot more than either entity needs Israel. It lights a path out of the morass in which the Israeli-Palestinian conflict is now stuck, setting the stage for more productive negotiations in the future.

Speaking to the Jerusalem Post on February 21, the United Nations Special Envoy to the Middle East, Nikolay Mlednov said, “If I were to say to you today, let’s get the (Palestinian) president (Mahmoud Abbas) and prime minister (Netanyahu) in the same room tomorrow, that would be daydreaming. Our role is to actually figure out how we can create the conditions under which such a process can resume in a meaningful manner.”

Like many other diplomats and observers, Mlednov is saying that conditions are not ripe for talks. But he also rightly notes that there is a task before the world’s diplomats beyond simply waiting for the respective leaderships of Israel and the Palestinian Authority to declare themselves ready.

Calling regional conferences, as some have suggested, is a fine idea, but only if there will be more than empty statements emerging from them. What must emerge from such conferences is a determination by the Middle East Quartet and each of its members (the United States, United Nations, Russian Federation and European Union) as well as the Arab states involved to create the conditions that Mlednov speaks of.

In order to create those conditions, they must be conceived with certain basic understandings. One is that, while it is true that ultimately the Israelis and Palestinians will have to negotiate any agreements themselves, this cannot occur in a vacuum. Israel is a regional superpower, the most stable state in the Middle East and the military giant in the region. The Palestinians are a stateless people who have lived under occupation for nearly half a century with little leverage in negotiations. This imbalance is a key reason why talks have not been productive in the past two decades.

Another issue is that negotiations have dragged on so long and yielded so little that both publics, but especially the Palestinians, have lost faith in the process. Only pressure from the outside, particularly from other Arab states, can give Palestinian President Mahmoud Abbas, or any other Palestinian leader, the cover he needs to reenter talks.

The conditions that need to be created are ones which establish incentives for progress toward a resolution and consequences for intransigence or failure to meet obligations. It also needs to be clear that the “carrots” are granted after the parties have achieved progress, not before.

There also needs to be an immediate change in the status quo in order for both Israelis and Palestinians to buy in to renewed talks. At this point, two decades of frustration and recrimination have soured too many people on both sides on further discussion. This can be addressed with two simultaneous steps.

First, an international declaration stating that the West Bank and Gaza Strip are, according to international law, held in belligerent occupation, meaning Israel is responsible for the security of West Bank Palestinians; it is also responsible for ensuring that the border crossings of the Gaza Strip allow for legitimate import and export of goods and materials sufficient to sustain the needs of the people there; and that the settlements are, as a result of that declaration, clearly illegal.

Second, an international committee charged with monitoring and reporting violations by any official spokesperson or media outlet, Israeli or Palestinian, would be created. Any incitement (which would need to be defined by the committee in very specific language) would be reported publicly, and repeated violations would trigger specific consequences.

Consequences for the Palestinians are clear enough: the loss of some amount of international aid. If this were done today, it would threaten to topple the Palestinian Authority. But if Israel is charged with fulfilling its obligations as an occupying power under international law, it would impact the PA, but would not cause the West Bank to descend into chaos.

For Israel, consequences are more politically complicated. Netanyahu may have overreached with the EU, but Israel is still a valued partner to Europe and the United States for many reasons, and even with its lurch to the right in recent years, Israel still has a great deal of popular support. Still, there are also so many facets to the relationships between Israel and both the EU and US that there are options for action.

The United States, for example, has, on several occasions, withheld loan guarantees from Israel.  While those guarantees only enable Israel to borrow money at a considerably lower interest rate, it was enough to force Israel to do as the United States insisted for both George H.W. Bush in 1990 and his son over a decade later. Other options include temporary suspension of arms shipments, altering of trade deals, and action or inaction in international fora, such as the United Nations Security Council or even the International Criminal Court.

Incentives are also easy to imagine. For the Palestinians, these include eventual statehood, independence, increased overseas trade and participation in international bodies. For Israel, opening up the Arab markets and the ability to work with Arab states to address regional concerns, the de-fanging of the international opprobrium against it that is growing today, and involvement in regional security measures.

The specifics are less important than the sheer political will to enact consequences. Reluctance to apply significant pressure to the Palestinians has been rare, but Israeli actions which displease its international benefactors have generally been met with polite statements of disapproval.

No matter how well-crafted a peace process may be, it depends on the international community being willing to stand firm on both the carrots and the sticks, and to apply the standards evenly to both sides. Only by doing so can the mistrust, anger, and frustration of both sides, as well as the imbalance of power between Israel and the Palestinians, be countered.

The experience of the EU labeling fight shows that, when the determination is there, it can be done.

The recent decision by the European Union to label products from Israeli settlements in the occupied West Bank has elicited loud cries of protest from Israel and from the Netanyahu government’s supporters in Washington. Critics have claimed that Israel is being treated unfairly, that the EU is trying to pressure Israel into concessions outside of the framework of bilateral negotiations, and that these measures are a part of the Boycott, Divestment and Sanctions movement whose real aim, critics claim, is to de-legitimize Israel.

In fact, the EU measures simply represent an effort to more faithfully implement a longstanding policy, backed by a strong international consensus, of differentiating between the State of Israel within the pre-1967 line, often referred to as the Green Line, and Israeli settlements built in the territories occupied in the 1967 war.

The effort to oppose this differentiation is often based on partial or misleading information, which we address below. It is important to recognize, however, that the unimpeded growth of settlements will eventually foreclose the option of a two-state solution, if it hasn’t already done so, as it will eliminate any possibility of contiguous and economically viable Palestinian state. It is therefore imperative that anyone hoping for a peaceful future for Israelis and Palestinians understand the facts about the settlements, EU labeling and the goal of differentiation.

• Is labeling an attempt to pressure Israel into concessions?

No, it is an attempt to clarify the view of the EU, one shared by the United States, that the settlements are not part of Israel. The labeling decision applies to limited categories of products, mostly agricultural, from the settlements. Israel’s finance ministry said that the labeling decision would impact some $50M per year, which is less than 1% of Israel’s trade with the EU in 2014, a total of $14 billion. It is meant to signal European concern about the lack of a diplomatic process, to be sure. It is a signal that the EU wants to see movement toward a resolution of this conflict resume, but in the absence of that movement, unilateral Israeli steps like settlement building will not be legitimated.

• Is labeling part of an effort by the EU to diminish its trade ties with Israel?

No. The EU extends extremely favorable trade arrangements with Israel, and it has publicly reaffirmed both its support for those arrangements and its opposition to any sort of boycott of Israeli products. Indeed, they have stressed that even when it comes to settlement products, no boycott is being considered by the EU.

• Why is the EU doing this, even though all parties agree there will be territorial changes from the 1967 line in any final agreement?

Along with the overwhelming majority of the international community, the EU views Israeli settlements beyond the Green Line as illegal under international law. Along with the U.S., the EU recognizes that there will likely be an exchange of territories when a two-state solution is agreed upon. Until such agreements are finalized, however, all land captured in 1967 is legally considered occupied territory.

• Is this just a technical decision by the EU to comply with long-standing policy?

Partly. It has long been EU policy that products from Israeli settlements are to be excluded from the very favorable trade deals Israel enjoys with the EU. Until now, however, the EU has not enforced the labeling laws, on the assumption that they would soon become moot in the wake of a peace deal between Israel and the Palestinians. The decision to enforce these measures demonstrates the recognition by the EU that Israel will not soon end its occupation, and is an effort to keep the two-state solution viable.

• Isn’t the EU singling out Israel here? Aren’t there nearly 200 other territorial disputes in the world? Why does the EU treat this one differently from, say, Western Sahara?

The idea of “200 other territorial disputes” has become a popular talking point, but it has little connection to the question at hand. With only a few exceptions, those territorial disputes do not involve the issues of settlements or even occupation. In the case, for example, of Crimea, the EU has banned trade and imports from that territory due to Russia’s intervention there. Multiple U.S. administrations have made clear that resolving the Israel-Palestinian conflict is a core national security interest; the EU measures are fully consistent with that view. Such foreign policy concerns are also explicitly spelled out in the EU’s trade agreement with Israel. The case of Western Sahara is the only truly comparable one to the West Bank, but the EU does not have the same policy in both places, thus labeling requirements are different. While the EU supports a peace process in Western Sahara, it does not recognize the territory as occupied. However, a European court recently ruled that the EU’s 2012 trade deal with Morocco was invalid due to the issue of Western Sahara. As the court’s decision implies, the discrepancy between these policies does not indicate that the policy regarding the West Bank is wrong or discriminatory, but rather that the policy regarding Western Sahara is inconsistent with broader EU policies. The argument this strengthens is not that labeling products from Israeli settlements is wrong, but that the same rule should apply in Western Sahara.

• Why shouldn’t the United States fight the EU on labeling?

As the Obama administration said in response to the EU decision, labeling products from settlements as what they are does not constitute a boycott on Israel. Further, as Secretary of State John Kerry recently pointed out, the process of transitioning Israeli rule over Palestinians to the Palestinians themselves is currently being reversed by Israeli settlement policy. Anyone who supports the two-state solution should welcome efforts to differentiate between Israel and the occupied territories.  Efforts to blur that distinction threaten to enmesh Israelis and Palestinians in a perpetual conflict.

• What is the US stance on settlement products?

The United States’ trade agreements with Israel were expanded in 1996 to include the West Bank and Gaza Strip. This was a part of a larger process of creating a “Qualifying Industrial Zone” to encourage economic cooperation between Israel, the Palestinians, Egypt and Jordan. Nonetheless, products made in the West Bank are required to be labeled as such, though they are not required to be specifically labeled as being from Israeli settlements. Despite this, when Congress passed legislation which applied in a uniform fashion to both Israel and “territories controlled by Israel,” the Obama Administration was quick to declare that, “…by conflating Israel and ‘Israeli-controlled territories,’ a provision of the Trade Promotion Authority legislation runs counter to longstanding U.S. policy towards the occupied territories, including with regard to settlement activity.”

• Won’t this labeling decision amount to a de facto boycott of Israel, and encourage more such boycotts?

No, these measures are not connected the Boycott, Divestment, and Sanctions (BDS) movement. The EU has stated clearly that they are opposed to all boycotts against Israel. One EU official told the Huffington Post, “It is essential to remind that the EU is strictly against any kind of boycott of Israeli products. Accordingly, we consider that a transparent labeling scheme is the best way to avoid that. In the absence of such a scheme, some European consumers and operators intending not to buy products from the settlements might be tempted not to buy Israeli products at all.”

 

Recently, the European Union implemented a procedure for enforcing existing regulations requiring the labeling of some goods produced in Israeli settlements in the occupied West Bank. Israel has vociferously objected to any labeling of products from its settlements, and this has prompted concern in Congress, including a bi-partisan letter written by Senators Cruz and Gillibrand protesting the requirement.

The Obama administration has made it clear that it does not object to the EU’s decision. “We do not believe that labeling the origin of products is equivalent to a boycott,” State Department spokesman Mark Toner said in response to a question. “And as you know, we do not consider settlements to be part of Israel. We do not view labeling the origin of products as being from the settlements as a boycott of Israel.”

The Cruz-Gillibrand letter offers some reasons for this disagreement between Congress and the President; they rest on both a different view of the administration and different understandings of the legal and political conditions under which the EU made its decision.

The Cruz-Gillibrand letter asserts that labeling settlement products as such will, “…discourage Europeans from purchasing these products and so serve as a de-facto boycott of Israel and Israeli companies.” The EU labeling guidelines apply only to specific products, mostly produce, that come from settlements that Europe and the overwhelming majority of the world consider illegal. It’s difficult to see how this can be reasonably construed as a boycott on Israel. It is strictly confined to settlement products. If companies doing such business are also companies rooted within Israel, they will not suffer anything beyond the labeling of this one aspect of their business.

Moreover, it must be recognized how minimal the financial impact of this decision is. Labeling products as originating in settlements will not discourage all sales; at most, it will negatively impact some percentage of retail sales. The labeling applies to less than 1% of all Israeli sales to European Union countries.

The Cruz-Gillibrand goes on to say that “This labeling campaign, along with the Boycott, Divestment, and Sanction (BDS) movement, are efforts to delegitimize Israel.” But the EU has never endorsed nor even hinted at any sympathy for the BDS movement. On the contrary, the EU has stated, unambiguously, that it values its relationship with Israel. Contrary to the letter’s assertion, the EU labeling measure strongly affirms the legitimacy of Israel, within its internationally recognized borders, the so-called “Green Line.” The labeling measure clarifies the illegitimacy of Israel’s settlements, a point which every American administration has repeatedly emphasized since 1967.

The Cruz-Gillibrand letter also cites US law which opposes any state-sanctioned boycott of Israel (a law crafted to oppose the Arab League boycott of Israel) and cites the recent Trade Promotion Authority legislation “…requiring our President to discourage Europe from enacting any politically motivated policies that would boycott, divest, or sanction Israeli products when negotiating the Transatlantic Trade and Investment Partnership.”

The anti-boycott provision remains in force, but as we have made clear, it does not apply here. The law does not apply to Israeli settlements, but only to Israel proper. It was intended to block efforts aimed at destroying Israel economically, not to stifle efforts to oppose the settlement program. In any case, labeling is not a boycott. Many analysts, including many in the Obama Administration, were concerned about the provision in the TPA bill that treated Israeli settlements as equal in standing with the sovereign state of Israel within its recognized borders. It was for this reason that the President made it clear that this provision was contrary to long-standing American policy and would not be upheld. In doing so, President Obama once again affirmed the distinction that has always been and remains American policy: that the settlements, whether one refers to them as illegal as the Europeans do or merely as illegitimate as the United States does, are distinct from the State of Israel.

Finally, Cruz-Gillibrand asserts that labeling “…prejudges the outcome of future negotiations between Israel and the Palestinians.” But the opposite is true. By treating the settlements, an indisputably key point in any future negotiations, as if they were part of Israel in any way, it grants legitimacy to their presence, and would in effect be rewarding unilateral Israeli actions, something which the U.S. and its partners all continue to strongly oppose. This would weigh very heavily in any future negotiations. The precedent set by United Nations Security Council Resolution 242, which calls on Israel to withdraw from territories it captured in the 1967 war, establishes that, even if Israel does retain some of that territory in an eventual peace agreement, the international community does not recognize any part of that territory as Israeli until such negotiations.

The EU’s labeling process has also been criticized for singling out Israel. It is true that Europe has not applied the same standard to other areas, but this is an argument for those standards to be applied elsewhere as well, not against labeling products from Israeli settlements. No doubt, the EU decision to begin with Israel is connected to Europe’s views that the settlements are illegal and that the current Israeli government bears a significant portion of the blame for the stagnation of the peace process. But targeting products of Israel’s settlements out of such motives does not, despite assertions by some to the contrary, run afoul of either international trade law or World Trade Organization or other international institutions’ regulations. If legislation targeted Israel, such questions could be raised, but the EU labeling policy targets only the settlements, not the State of Israel.

The EU continues to give Israeli products preferential treatment in import regulations such as tariffs. This affirms the European view that Israel is not only legitimate, but a valued trading partner. Labeling settlement products is a legitimate way for Israel’s largest trade partner to make clear its objection to the growing settlements which, in both the European and American view, are endangering the possibility of a two-state solution to the Israeli-Palestinian conflict. Differentiating between the legitimate State of Israel and the illegitimate settlements counters those who would use Israel’s ongoing occupation of the West Bank to de-legitimize the entire country. It is not a boycott of Israel, or even of the settlements, and should not be treated as one.

In late October, Israeli Prime Minister Benjamin Netanyahu told a joint meeting of the Knesset foreign Affairs and Defense Committees that “at this time we need to control all of the territory (of the West Bank) for the foreseeable future.” He echoed this during his talk at the Center for American Progress on November 10, when he insisted that, despite his stated support for a two-state solution, he saw no alternative to a permanent Israeli military presence in the Jordan Valley.

These remarks fall within a particular set of parameters of discourse around the Israeli-Palestinian conflict. In this view, Israel is being asked to make a concession by even considering an end to its now 48-year old occupation. In this view, Palestinian liberty is not a self-evident, inalienable right, but an Israeli gift.

This view is not only that of the Israeli right, but of the majority of politicians in both Jerusalem and Washington. Netanyahu is merely following those parameters to their logical conclusion: that the occupation lives until such time as Israel feels it should end. The fact that millions of Palestinians live under military rule may disturb many Israelis, but it does not create a political imperative to change that state of affairs.

Netanyahu recognizes the absence of any international agenda for a peace process, much less any real pressure to get back onto the long and winding road toward a sustainable solution. As a result, he is pressing forward with the agenda of the Israeli right, which has long been clearly articulated by its leaders. Their view has been, unabashedly, a single Israeli state in all the territory Israel now controls, with Palestinians contained and controlled within a series of disconnected cantons.

That policy means holding the West Bank and East Jerusalem in perpetuity while denying citizenship, along with basic rights, to the Palestinian people living there. If that is the policy that Israel pursues, then it must explain to the world how it justifies a system that is unmistakably reminiscent of apartheid.

It will not be an easy case to make, and it certainly will not be a popular one. But given the fact that, at this writing, there has been no notable response to Netanyahu’s words, it might not be very hard for him to sustain the policy he seems to be proposing.

Last month, during the height of the tensions raised over the status of the Temple Mount, I met with a high-ranking official in the Netanyahu government in Jerusalem. In discussing the impasse in peace talks, he posed the following question: “As an Israeli, if I am to agree to a Palestinian state, is it not fair that I know what will be on the other side?”

It’s a reasonable question. After all, can we expect Israel to consent to an arrangement if they don’t have some assurance that it won’t lead to even more attacks? Once we unravel the context of that rhetorical question, however, we get to one of the root causes of the endless nature of this occupation.

The point the official made to me was based on the view that Israeli security demands that Palestinians prove they can be trusted with their own freedom. This is a logic that is broadly accepted. Yet it rests on certain assumptions.

The first assumption is that Palestinians are either not entitled to or have somehow forfeited the rights Americans consider fundamental and inalienable. Many of us in the West have a greater measure of freedom than most, and we generally hold to the idea that human rights, civic rights and rights of individual liberty are inalienable. True, most of us also believe that a crime can lead to an individual being forced to forfeit some of those rights, but you’d be hard pressed to find people who believe that an entire group of people can be denied their individual or collective rights because of the actions of a few members of their group.

Yet when it comes to the Palestinians, we seem to lose sight of this basic ethic. Of course, this is a situation of unsettled conflict, and in such circumstances, people are often put under martial law, or even besieged. But according to international norms, those are supposed to be temporary conditions. Indeed, the laws of military occupation (which Israel’s High Court has confirmed apply to the West Bank) exist precisely because occupation is understood to be a temporary condition, which all sides are striving to end.

Indeed, the blind eye the United States and, to a lesser extent, the European Union turn to Israel’s failure to fulfill its duties as an occupying power, in addition to the human rights issues that numerous Israeli groups have documented, are also an outgrowth of this view of the conflict. Even many who are sympathetic to the Palestinians’ plight, whether out of fear of being seen as insensitive to the Jewish history of persecution or for purely political reasons, continue to treat basic Palestinian rights as subordinate to Israeli security concerns.

Israel’s argument that the territories in question are not occupied because they were not the sovereign territory of another state (in this case, Jordan) does not change the dilemma of the millions of Palestinians who exist on a daily basis without civic or national rights and whose human rights are routinely violated with impunity.

This is what needs to change before any serious progress can be made. Israeli security is of course important, but it cannot continue to serve to justify the violation of Palestinians’ basic rights. The current paradigm frames the issue as one where Israel’s security concerns are the first order of business, and in pursuing those concerns, Palestinian rights should be addressed. But the most basic ethical view demands the reverse: a framework that demands the same rights for Palestinians as for Israelis, and within pursuing that overarching goal, security for both peoples must be maximized.

If that framework is adopted, we have the potential for a solution because it demands that the occupation end, where the current one does not necessarily do that. Most of us can reluctantly accept that people live under occupation for a short time, and we hope that human rights monitors can be effective in policing the conduct of occupying powers. But there are no moral or ethical, let alone legal grounds for accepting endless occupation. If Israel truly wants to control all of the West Bank, then it must annex it all (not just the parts it wants) and grant full citizenship to all of its inhabitants. Otherwise, it must work diligently to end the occupation and establish a viable, secure and self-sufficient Palestinian state.

As tragic and outrageous as the stabbing of innocent civilians or the suicide bombings of years past or any other murder of Israelis may be, they cannot justify open-ended occupation for the millions of innocent Palestinians who had no part in any such crimes. But no outside party is enforcing this basic ground rule with Israel. It is thus no surprise that Netanyahu is advocating perpetual occupation.

This is where the attitude of the United States and its international partners must enter, and enter forcefully. Israel is a country whose populace feels itself to be under permanent siege and is led by a Prime Minister who has a long history of building his political base on a foundation of fear. Under those circumstances, it is not reasonable to expect Israel to willingly give up what it perceives as its security advantage in controlling the Palestinians.

The United States has long sided with Israel in resisting any kind of timetable for ending the occupation. This has to change. Just as there needs to be a sense of urgency about Israeli civilians being killed in the streets of Israel, there must be at least as much urgency about the Palestinian people getting the rights and freedoms that all of us are entitled to as human beings.

Netanyahu has, ironically, given the US and EU the opportunity to change the game. These bodies must respond to Bibi’s declaration of perpetual occupation by making it clear that the occupation must begin to be drawn down.

The process need not be instantaneous. An international security presence can begin to replace Israeli security forces in various parts of the West Bank as Palestinians continue to develop the infrastructure they will need for a functional government. Meanwhile, permanent borders, the status of Jerusalem and the questions of refugees, the Jewish identity of Israel and mutual economic, water and security agreements can be worked out. It amounts to a phased Israeli withdrawal, with constant security adjustments and steady increases in Palestinian freedom. Such a process, however, can only succeed with robust international participation, led by the United States,

Until now, too much of the international diplomatic framework has been centered on what is best for Israel. Yes, it is important to make the argument that the occupation is the single biggest obstacle to a normal existence for Israel; that it is diverting resources from the Israeli public; and that it is rotting Israel’s moral structure from the inside. These are powerful arguments that should help incentivize Israelis to end the occupation.

But the more crucial moral argument is that millions of Palestinians live under occupation, and have done so for more than 48 years now. As those years have progressed, the occupation has not normalized or relaxed, but has grown even more restrictive and oppressive. This is a horrible reality, and obscuring it behind attacks on Israelis is a massive injustice to the overwhelming majority of Palestinians who want nothing more than to live normal lives without fear but with hope and opportunity. That is an argument that has been sadly neglected.

As long as the moral and political questions of ending the occupation revolve so strongly about Israel’s concerns, legitimate though those may be, Netanyahu can find his justification for advocating occupation without end. And he will find an audience that will not berate him for it. Once the question is properly framed around both Israeli security and Palestinian rights and freedom, such options cannot be considered, and progress can reasonably be expected.

Secretaries Jack Lew, Ernest Moniz and John Kerry defend the JCPOA before the Senate Foreign Relations Committee

AIPAC recently issued a memorandum to congressional members and staff with respect to the future of the Iran sanctions regime should Congress reject the Joint Comprehensive Plan of Action (JCPOA).  This memorandum notes that, if a joint resolution of disapproval for the JCPOA were to be passed by both houses of Congress and President Obama’s inevitable veto overridden by a two-thirds vote again of both houses, the U.S. sanctions regime would remain legally in place.  It is on this basis that AIPAC argues there will be no deterioration of the international sanctions regime facing Iran, at least until it completes the nuclear steps it committed to take in the JCPOA.  Consequently, AIPAC considers there will be ample time to renegotiate the text of the JCPOA before Iran has finished its work.

AIPAC is certainly correct that U.S. sanctions can be maintained as a matter of law should Congress reject the JCPOA.  But, it is there that AIPAC’s analysis parts company with several important realities.

 

Maintaining the sanctions regime if the JCPOA falls apart is about more than the letter of U.S. law.

AIPAC’s main argument appears to be that since U.S. law will not change if the JCPOA is rejected, we have nothing to fear from a post-JCPOA-rejection world.  This assertion ignores the fundamental reality that the U.S. sanctions with teeth require foreign participation in order to work.  This is because U.S. law is structured to present an “us or them” choice to international businesses and banks therefore have to elect to follow the U.S. lead (and U.S. law) in order to prevent transactions from taking place with Iran.

Certainly, as AIPAC has noted, there is fear of the consequences of U.S. sanctions on foreign businesses to motivate them.  No one likes paying multi-billion dollar fines and many of the most important international corporations and financial institutions will shy away from doing business with Iran until the status of U.S. sanctions is resolved.  But, cooperation with U.S. sanctions has also been about a common aim and pursuit by the governments of those corporations and banks.  European, East Asian, and Indian firms have declined to do business in Iran – even if their exposure to U.S. sanctions was limited – because there was a common understanding that sanctions were needed to prevent Iran’s acquisition of nuclear weapons.  This common sense of purpose will be lost if the United States walks away from the JCPOA.  Instead, the only motivating force will be the threat of U.S. penalties.  But, for those without U.S. exposure – or prepared to risk it – this may not be enough to stop business with Iran.

Moreover, foreign governments can take steps to preclude corporate cooperation with U.S. sanctions.  AIPAC takes it as a given that if the U.S. Congress passes new sanctions, foreign cooperation is assured.  But, let us remember a time in which there was a significant difference between the United States and Europe on Iran sanctions: 1996’s Iran-Libya Sanctions Act, which prompted – among other things – passage of European legislation that explicitly forbade companies from complying with U.S. law, deemed by the EU to be extraterritorial.  This law is still on the books, as is a European policy decision in 1997 to bring the United States to the World Trade Organization should it impose sanctions on a European company pursuant to ILSA.  Fortuitously, this situation has been avoided to date because of cooperation between the United States and EU.  But, should that cooperation lapse, this challenge could once again be met with infighting between the EU and United States, hardly a propitious scenario for building a unified diplomatic front to get a better nuclear deal.

 

Even with cooperation, there won’t be support for new sanctions.

Let us assume for a moment that rejection of JCPOA and resumption of U.S. sanctions does not lead to immediate legal conflict between the United States and its sanctioning partners.  This is still a far cry from an environment conducive to the imposition of new sanctions to strengthen the U.S. negotiating hand with Iran.

No one in the opposition camp has laid out a clear strategy for how to secure such pressure, other than to threaten the imposition of sanctions against our partners directly.  This is understandable, because there is no credible strategy for doing so.  The United States has secured cooperation with its sanctions efforts before on the basis of a plan to get a negotiated settlement of the nuclear issue.  But, that plan would be largely out of the window as a result of the rejection of the JCPOA.

Skeptics doubtless would bristle at this idea, stridently noting that they only wish to “improve” the deal, not destroy it.  But, considering that AIPAC argued that the JCPOA could only be a good deal if it required “Iran to dismantle its nuclear infrastructure and relinquish its uranium stockpile,”[1] it is unlikely that this is the kind of condition Iran could plausibly accept.  Other skeptics have also argued that the provision of sanctions relief is itself a problem because of the potential for destabilizing activities and terrorism being funded by Iran.  Taken together, the “improved” nuclear deal would require a wholesale rewrite, with terms involving the termination of Iran’s nuclear program and absence of sanctions relief until it has fully resolved any outstanding concerns with its regional foreign policy.

Such a deal would, of course, be to the U.S. advantage.  But, it is also thoroughly implausible and it is doubtful that U.S. partners (aside from Israel) would sign on to such a construct because it has no hope of being accepted by Iran.  It is worth noting, for example, that Russia and China have long maintained that Iran has a right under the NPT to an enrichment program and that during negotiations, Russia indicated that it would accept no language – even if Iran was amenable – that appeared to abridge this NPT right.  And, it is also worth noting that – though some have tried to suggest that it is merely Administration spin – the Ambassadors of the European-3 countries (France, Germany and the UK) have all apparently made it quite clear to interested Congressional interlocutors that they see no chance of resuming talks if Congress torpedoes the JCPOA.[2]

 

Radical, dramatic escalation of sanctions pressure would be necessary

It is unfortunate that the international community would probably not join willingly in an escalation of sanctions pressure against Iran because, if there is any hope of using sanctions to force Iranian nuclear capitulation, then it would have to come on the back of a such a massive escalation.

To be clear, I do not believe that more sanctions would force Iran to jettison its nuclear program.  Sensible, respected skeptics of the nuclear deal have agreed with this general conclusion (such as Juan Zarate during testimony before the Senate Foreign Relations Committee on July 30[3]).  Moreover, the history of the Iranian nuclear experience is that when faced with new sanctions, Iran responds with its own escalation by installing thousands of new centrifuges.

But, assuming that sanctions could create such a scenario, then it certainly would not be with the tools in place to date.  Iran’s economy has rebounded from its recession in 2012-2013 that sanctions helped to create.  Iran’s economy is still weak and it requires comprehensive sanctions relief to truly recover.  But, this also suggests that keeping the sanctions at status quo levels would also not be enough to tip Iran back into crisis and certainly sufficient crisis so as to get Iran to go even farther past the redlines established for the negotiation by the Supreme Leader.

But, without international support, this would not be achievable.  The best that could be hoped for is spotty cooperation and compliance, and the use of penalties to punish those who transgress U.S. sanctions.  But, let us not forget that the imposition of sanctions penalties is itself an admission of failure: failure of the deterrence and prevention strategy that sanctions are actually meant to effectuate.  For penalties to be imposed, it means that the bad guys have gotten the materials, technology or money that was to be denied by sanctions.  Penalties being imposed are not victories – they are compensation for the victims.

Penalties also hurt the United States, both in short-term and long-term ways.  First and foremost, the imposition of sanctions against particular targets means that they cannot do business in the United States.  This does not matter when Iranian individuals and entities are involved.  But, it does when major international banks or corporations are.  Denying access to these institutions also means that U.S. persons cannot do business with them, harming U.S. economic competitiveness.  The argument that our economy is so large that it can sustain such damage only works if sanctions are imposed in a small-scale fashion.  But, if the United States were to threaten the imposition of sanctions on major foreign financial institutions – and go beyond penalties to the punishment of cutting off correspondent banking relationships, as several statutes require – we could find our own economic position suffering. Imagine, for example, a decision to impose such sanctions on major Chinese banks should China refuse to make significant reductions in its purchases of Iranian oil once the sanctions mandating reductions come back into place.   It is not just the Chinese businesses that would suffer but anyone who does business in China.  China is the U.S. second largest trading partner.  Combined with India, Japan and Korea (the top four importers of Iranian oil), and those we would have to threaten with sanctions account for a quarter of all U.S. international trade (according to June 2015 year-to-date data from the Census Bureau).[4]

Long-term, another demonstration of the risk of reliance on the U.S.-led international financial system would further incentivize moves away from it.  I have written about this extensively and the risk both to the U.S. economy and to the ability of the United States to use sanctions as a foreign policy tool.[5]  I’m not alone: JCPOA skeptics Mark Dubowitz and Jonathan Schanzer similarly warned of the risk of alternative financial systems emerging and the threat this would pose to the United States from both financial and national security perspectives.[6]  It is this threat that Secretary Kerry was referencing in a recent interview when he said that the use of the U.S. dollar as a reserve currency was at risk if the Iran deal were to be jettisoned.

 

And Iran is hardly likely to sit around waiting for more pressure

Even more fundamentally, AIPAC misses the boat when it suggests that Iran’s response to U.S. rejection of the JCPOA will be placid understanding and even continuation of its steps under the JCPOA (!) rather than an escalation of its nuclear program.  To be sure, Iran would seek to take advantage of the situation by holding steady with its nuclear activities provided the JPOA’s sanctions relief would remain in place; this would further its ability to sow dissention in the international community and poison the U.S. ability to get partners for maintaining, much less escalating, sanctions.

But, the Iran Nuclear Agreement Review Act (INARA) would ensure that is impossible.  The terms of that Act require the President to stop providing sanctions relief under the JPOA in addition to not moving forward with relief under the JCPOA.  This means that oil sanctions would once again be fully in-force, with significant reductions mandated every 180 days.  International oil prices suggest that such reductions would be possible without creating a market crisis, but it strains credulity to believe that China and India would undertake 20% reductions of their imports of Iranian crude oil in the aftermath of a U.S.-aborted nuclear deal.  And then, a real U.S. choice would be needed whether to impose sanctions on associated banks and oil companies – which would ironically free them to engage in however much oil they might wish to purchase from Iran, knowing that they face no further penalty – or to pass on such sanctions at the risk of hollowing out the sanctions regime.

In response to concerns that the resumption of this sanctions campaign would also prompt Iran to start installing thousands of centrifuges, enriching tons of uranium, and completing the Arak reactor (capable of producing 1-2 weapons worth of weapons-grade plutonium per year), some outside observers have suggested either that the President could use his “prosecutorial discretion” to not enforce the law vigorously or that he could rewrite U.S. law unilaterally with Executive Orders to keep providing sanctions relief.  No one in the Administration has made such a claim and it is doubtful they would, as this could prompt legal challenge and constitutional crisis…from which Iran would surely benefit.  Moreover, it is questionable logic to assert that a better deal is achievable while also arguing that, in order to keep the nuclear situation from escalating, the United States ought to hold back on sanctions enforcement.

 

Boiling things down

AIPAC is probably right that the international sanctions regime will not collapse on Day 1 if the JCPOA dies in the halls of the U.S. Congress.  Iran will have to evaluate what it chooses to do in response, as will U.S. partners.  But, at best, the sanctions regime will be mauled, having lost its credibility in the international community and place as part of a diplomatic endeavor.  The proposed alternative deals suggest either that the Iranians are just waiting to accept worse terms after the U.S. fumbles the ball or that far more pressure would be needed than the international market would likely bear.  Having lost its international credibility, the United States will be in no place to secure such international pressure on a voluntary basis and will face some important, unenviable real world problems as a result.  Iran will reap the rewards of U.S. diplomatic failure, either waiting out the sanctions campaign in its death throes or expanding its nuclear program to ensure that any future negotiation starts with a better Iranian bottom-line.  Either way, the United States (and its partners at greatest risk of an Iranian nuclear weapon) would be worse off.

 

[1]http://www.aipac.org/~/media/Publications/Policy%20and%20Politics/AIPAC%20Analyses/One%20Pagers/Negotiating%20with%20Iran_5%20Requirements_Cover%20Sheet.pdf

[2] https://www.washingtonpost.com/world/national-security/ambassadors-press-case-for-iran-nuclear-deal-in-congress/2015/08/06/9f46cae8-3c70-11e5-b3ac-8a79bc44e5e2_story.html

[3] https://www.washingtonpost.com/world/national-security/the-limitations-of-sanctions-on-iran/2015/08/03/3be62170-37a1-11e5-9739-170df8af8eb9_story.html

[4] https://www.census.gov/foreign-trade/statistics/highlights/top/top1506yr.html

[5] https://gallery.mailchimp.com/20fec43d5e4f6bc717201530a/files/Issue_Brief_The_Future_of_Economic_Sanctions_in_a_Global_Economy_May_2015.pdf

[6] http://www.wsj.com/articles/mark-dubowitz-and-jonathan-schanzer-the-fragility-of-the-global-financial-order-1425423520

Richard Nephew is the Program Director, Economic Statecraft, Sanctions and Energy Markets, for the Center on Global Energy Policy. Nephew joined the Center February 1, 2015 directly from his role as Principal Deputy Coordinator for Sanctions Policy at the Department of State, a position he held since February 2013. Nephew also served as the lead sanctions expert for the U.S. team negotiating with Iran. From May 2011 to January 2013 Nephew served as the Director for Iran on the National Security Staff where he was responsible for managing a period of intense expansion of U.S. sanctions on Iran. Earlier in his career he served in the Bureau of International Security and Nonproliferation at the State Department and in the Office of Nonproliferation and International Security at the Department of Energy. Nephew holds a Masters in Security Policy Studies and a Bachelors in International Affairs, both from The George Washington University.

Statement by Matthew Duss

President, Foundation for Middle East Peace, Washington, D.C.

Presented to Subcommittee on National Security, Committee on Oversight and Government Reform

“Impact of the Boycott, Divestment, and Sanctions Movement”

Mr. Chairman, Members of the Oversight Committee, thank you for inviting me to testify today on this important and timely issue.

In the ten years since it commenced, the global Boycott, Divestment and Sanctions movement, or BDS as it is called, has slowly but steadily risen in visibility. I’d like to focus today on the role that the BDS movement has been playing recently in the U.S, particularly with regard to recent Congressional action.

In order to do that, I first want to take a moment to identify just what we’re talking about when we refer to BDS. The movement began in July 2005 with a joint call from a number of Palestinian civil society organizations, with three main demands: An end to the occupation that began in 1967; equal rights for Palestinians citizens within Israel; and protecting and promoting the rights of Palestinian refugees to return to their homes in what is today Israel. The term “BDS” is widely understood to refer to the network of grassroots activists who are part of a global movement to encourage boycotts, divestment from, and ultimately international sanctions against Israel to achieve these goals.

This movement – its goals and its activism – is distinct from the many peace activists in Israel, Palestine, the United States and elsewhere, who, in their effort to preserve the possibility of a two-state solution to the Israeli-Palestinian conflict, call for boycotts of settlement products and divestment from businesses profiting from the 48-year old occupation of the West Bank, Gaza and East Jerusalem.

Crucially, this movement is also distinct from actions and policies of the European Union and the governments of some member states that distinguish between Israel within the pre-1967 lines – known as the Green Line – and the occupied territories. A recent report by the European Council on Foreign Relations emphasizes that these actions and policies do not represent a policy shift by the European Union, but simply more faithful adherence to the EU’s existing laws.

The report states, in part, “The EU has never recognized the legality of Israeli settlements in the occupied territories (including those in East Jerusalem and the Syrian Golan Heights that have been formally annexed by Israel) and consequently does not consider agreements signed with Israel to also apply to Israeli settlement-based entities.” The report also cites a February 2010 ruling from the European Court of Justice (ECJ) stating that agreements reached with Israel must be interpreted in light of the EU’s agreements with the Palestinians, which stipulate that only Palestinian authorities can issue origin certificates for goods from the West Bank, including from Israeli settlements. As a result, the report states, “The European Commission and the EEAS have gradually been compelled to take greater care in ensuring the EU’s correct adherence to European law in its bilateral relations with Israel.”

The key distinction here is between Israel within the Green Line, and the occupied territories. Israel is understandably concerned about the potential consequences of Europe, its largest trading partner, more energetically enforcing these laws. The EU has, for years, looked the other way on these regulations in the hope that the occupation would soon end and that the differentiation between Israel and the settlements would become moot. As the ECFR report states, “[D]ue to the fact that as cooperation with Israel expanded in the 1990s, the EU treated Israel’s occupation as temporary in the belief that the imminent success of the Oslo peace process would make added clarifications a moot point. The EU therefore avoided implementing a legal regime of differentiation (between Israel and the occupied territories) during this period.”

But in recent years, as the peace process has stalled, most recently with the collapse of Secretary of State Kerry’s effort in April of last year, the EU has renewed an effort to begin more aggressively enforcing their existing laws. It is important here to point out that these laws are fully consistent with long-standing American policy that similarly does not recognize the legitimacy of Israeli settlements, unless and until their status is redefined in negotiations.

This is where we come to the recent action by Congress and the response from the State Department. With the stated intention of protecting Israel from BDS, a provision was recently added to the Trade Promotion Authority bill– a provision that implied a significant shift in the policy of the United States since 1967. The provision requires the U.S. Trade Representative to discourage European Union countries from boycotting “Israel or persons doing business in Israel or Israeli-controlled territories” (emphasis added) as part of free-trade negotiations between the U.S. and the EU. In doing so, the amendment conflates Israel and the occupied territories. By blurring this important distinction, a dangerous precedent could be set for treating Israeli settlements beyond the 1967 lines no differently from the internationally recognized State of Israel. At the very least, it would create confusion amongst our allies with regard to U.S. policy regarding the occupied territories and their ultimate disposition.

In addition, conflating Israel and the settlements for the purposes of U.S. trade negotiations represents a clear threat to the two-state solution itself, undermining the our country’s ability to effectively broker a peace agreement between the Palestinians and Israelis.

This is why it was important and appropriate for the State Department to offer a clarification as it did upon passage of the trade bill. State Department spokesman John Kirby noted that, “The United States government has … strongly opposed boycotts, divestment campaigns, and sanctions targeting the State of Israel, and will continue to do so. However, by conflating Israel and ‘Israeli-controlled territories,’ (this) provision of the Trade Promotion Authority legislation runs counter to longstanding U.S. policy towards the occupied territories, including with regard to settlement activity.” Mr. Kirby went on to state that, “The U.S. government has never defended or supported Israeli settlements and activity associated with them and, by extension, does not pursue policies or activities that would legitimize them.”

It is important to recall that U.S. law already protects Israel against boycotts initiated by foreign governments. The Export Administration Act of 1979 and the Ribicoff Amendment to the Tax Reform Act of 1976 were enacted to protect Israel from the Arab League’s boycott against the State of Israel. The amendment to the fast-track bill adds nothing in this regard. Rather, it serves only one purpose: protecting settlements from pressure.

Ironically, this very conflation is precisely what the most radical elements in the BDS movement strive to achieve. Those who believe that the only solution to the conflict is the end of Israel as a Jewish state and the creation of a single state in its place reject any distinction between, for example, the settlement of Ariel in the occupied territories and the city of Tel Aviv. Similarly, those who support a messianic vision of “Greater Israel,” which requires permanent Israeli control of the occupied territories, reject any distinction between Haifa and the settlements inside Hebron. For those who support a two-state solution that includes a secure, democratic and Jewish state of Israel living side by side with a secure and independent Palestinian state, this conflation is extremely problematic.

There is another conflation here that is also of concern. When questions arise about the possible impact of BDS, there is often no distinction made between the effects of the BDS movement and the actions taken by European or other trading partners of Israel. This ends up overstating the impact of the BDS movement, both for its supporters and detractors.

There is no evidence that the European Union’s policies and actions with regard to settlements are based on the actions of the BDS movement. On the contrary, it is the collapse of the peace process, the deepening of Israel’s occupation and the possible foreclosure of the two-state solution that have motivated these European moves. In a letter to European Union Foreign Minister Federica Mogherini in April, sixteen European Foreign Ministers urged the labelling of products originating in the settlements, writing that: “European consumers must indeed have confidence in knowing the origin of goods they are purchasing. Green Line Israel and Palestinian producers will benefit from this.” Far from being motivated by the BDS movement, the ministers made it clear that it was the stalled peace process that provided the impetus for their recommendation. The goal was, in their words, “the preservation of the two-state solution.”

Likewise in the United States, the most prominent examples of concrete boycott- and divestment-related activism in the Israeli-Palestinian arena have fact been focused unambiguously not on Israel but on the settlements and the occupation. These developments are the product of frustration with the failure of diplomacy to bring an end to the occupation, and a desire to preserve the possibility of a two-state solution. As in Europe, the actions involved are distinct from the efforts and goals of the BDS movement. For example, the Presbyterian Church (USA) heard a great deal from the BDS movement over the years in which it debated the decision it eventually adopted in 2014 to divest from companies it believed were profiting from Israel’s occupation. Yet the Church made it clear in its decision that it was not acting in concert with the BDS movement, but from its own principles – and it focused its activism not on Israel, but explicitly on the occupied territories.

In a statement made after the vote to divest, PC (USA) issued a statement saying, “[O]ur action to selectively divest was not in support of the global BDS movement. Instead it is one of many examples of our commitment to ethical investing. We are pressed and challenged to follow our faith values and commitments in all times and in all areas of our lives. The occupation must end. All peoples in Israel and Palestine should live in security, freedom, and peace. This action is but one aspect of our commitment to work to this end.”

PC (USA) went on to explicitly reiterate its support for the existence of the State of Israel and for the two-state solution, clarifying that, “This action on divestment is not to be construed or represented by any organization of the PC (USA) as divestment from the State of Israel, or an alignment with or endorsement of the global BDS (Boycott, Divest and Sanctions) movement.”

As of today, the BDS movement, in and of itself, is not a threat to Israel, either economically or in terms of security. The main impact of the BDS movement has been in generating an oftendivisive debate, on American campuses, among academics faced with campaigns for academic boycotts and in getting a handful of musicians to cancel or publicly declare their intent not to perform in Israel.

To the extent that one sees BDS actions as part of an effort to “de-legitimize” Israel, they should certainly be addressed, but not through legislation. Israel has the protection it needs and deserves under existing U.S. law. The arguments raised by the BDS movement in academic and other civil society institutions should be addressed, in the American tradition, with thoughtful, considered and ethical counter-arguments.

I would also suggest that it is a mistake to focus on the BDS movement while ignoring the main reason for its continued growth, which is the failure to end the occupation that began in 1967 and achieve Palestinian national liberation and sovereignty. If one is genuinely concerned about the impact of the BDS movement, the surest way to take the wind out of its sails would be to work diligently to achieve those goals, and act against efforts which prevent them.

Moreover, it would be hugely counterproductive to give BDS an unearned win by cooperating in any way with the conflation of Israel and the occupied Palestinian territories. We must recognize legitimate actions, whether we agree with them or not, by European governments as well as civil society actors that draw a distinction between the settlements and the State of Israel. We can and must support Israel in defending herself against actions that genuinely threaten its security and legitimacy. This has been a consistent American position since Israel’s birth.

Another position in which America has been consistent has been in opposing the creation of Israeli settlements beyond the Green Line, which have been deemed illegitimate and an obstacle to peace by every U.S. president since 1967. Efforts to blur that distinction are just as dangerous to Israel’s existence as a Jewish and democratic state as attacks on Israel’s legitimacy itself. It is entirely consistent with longstanding U.S. policy, and indeed necessary to preserve the ultimate goal of a two-state solution, to continue to preserve that distinction in U.S. policy and law.

I thank you, Committee members, for your time and attention.

In the wake of the collapse of the last round of Israeli-Palestinian talks last April, it’s become widely accepted that the continuing growth of Israeli settlements is a key obstacle to an agreement. This has created difficulties for those inclined to support the Israeli government’s ability to do whatever it wants. One way to make it easier to defend the settlements and the occupation that sustains them is to obscure the difference between them and Israel proper. As I wrote last month, a method that lobbyists like the American-Israel Public Affairs Committee (AIPAC) have been employing lately to accomplish that is to target the Boycott, Divestment, and Sanctions movement (BDS).

Several recent pieces of legislation demonstrate how this is accomplished. In Illinois, a bill prohibiting Illinois from contracting with businesses that are boycotting Israel passed unanimously in both the State Legislature and Senate. The language of the bill specifically includes “territories controlled by the State of Israel” – that is, territories occupied by Israel after the 1967 war, which no country in the world, including the U.S., recognizes as part of Israel.

In Congress, amendments to the bills that would give the President the power to negotiate the Trans-Pacific Partnership trade deal without public scrutiny (called “fast track”) require the President to make combatting any boycotts of Israel a principle trade objective and would require the President to report to Congress on any businesses that are participating in such boycotts. These amendments also specifically include “territories controlled by Israel.”

In both cases, the legislation does little if anything to protect Israel’s legitimacy. Rather, they extend existing American protection to Israel’s settlements, treating them as if they were a part of Israel for the first time in American history.

It is important to recall that US law already protects Israel against boycotts started by foreign governments. The Export Administration Act of 1979 and the Ribicoff Amendment to the Tax Reform Act of 1976 were enacted to protect Israel from the Arab League boycott against it. The Illinois law extends this protection in a small way, to encompass any boycotts against Israel, whether initiated by governments or civil society. The amendments in Congress, by contrast, change nothing with regard to boycotts of the internationally recognized State of Israel.

The real effect of those amendments and the major effect of the Illinois law as well, actually has nothing to do with any boycotts of Israel, whether by Arab states or activists. The upshot of all of these measures is that, for the first time, the United States is treating the settlements as if they were part of Israel. At no time has the United States ever implied any recognition of Israeli sovereignty over any territory it occupied in 1967. Even Israel’s annexations of the Golan Heights and East Jerusalem have never been recognized by the United States.

Promulgating bills purported to be opposing BDS is a clever way to disguise what is, in reality, an effort to affect a major shift in American policy toward the settlements. Admittedly, it is a slower way to change that policy, and one must point out that the Illinois law clearly does have some, albeit small, influence on potential BDS activities. There can be no doubt, however, that when the dust settles and politicians look back on what they did here, the one and perhaps only effect that will stand out will be setting a precedent for treating the settlements as a part of Israel.

Here, it is instructive to examine a post by Eugene Kontorovich at the Volokh Conspiracy celebrating these new laws. Kontorovich, who is one of a microscopic number of international law experts who defend the legality of Israel’s settlement program, wastes no time in capitalizing on the dual nature of the bills. He immediately blurs the very crucial distinction between European economic actions directed entirely at Israel’s settlements, and some civil society BDS actions that take aim at Israel more generally.

Kontorovich derides European concerns about the economic and legal risks of doing business with the settlements, calling them legally groundless. He does not expand on this point; perhaps a sign that he knows it is easily assailable. In fact, there are serious issues for firms that are considering doing business with or in the settlements.

The overwhelming opinion of both international law scholars is that Israel’s settlements are illegal and violate the Fourth Geneva Convention, which forbids an occupying power from transferring its own citizens into occupied territory. As a result, the European Union and a number of European countries have passed laws that exclude settlement products from favorable import laws that Israel is entitled to as an associate of the EU or has worked out in trade agreements.

Europe has never really enforced those laws, but this could be changing, and that is what has Kontorovich and his ilk concerned. A recent trade deal between the EU and Israel became controversial due to provisions that barred any dealings with the settlements. The EU is also considering enforcing its laws about labelling products that come from the settlements, and thus distinguishing between them and Israeli products.

Crucially, Kontorovich describes these measures, and European warnings to businesses about them, as actions and warnings against “Israeli companies,” and this is again part of the agenda of blurring the distinction between Israel and the settlements. Kontorovich then moves into a general attack on the global BDS movement.

By melding his arguments against European measures and those of the BDS movement, Kontorovich lumps all economic action together, without distinguishing between actions directed at Israel and those directed at the occupation. This can hardly be seen as accidental; virtually every major move by businesses, governments, churches or any other entity that could have even the slightest economic effect on Israel has been scrupulously directed solely at Israel’s settlements and its ongoing occupation. That holds whether those actions have included any involvement of the global BDS movement or not.

Indeed, Kontorovich hardly stands alone in this. Boycotts or divestment proposals directed solely at the settlements and the occupation are routinely called “anti-Israel” and described, wholly inaccurately, as being directed against Israel.

Kontorovich also employs the disingenuous comparison of the BDS movement’s actions to the Arab League boycott of Israel. A group of governments, however, took that action, and as such, it is appropriate for another government to act to counter it. Economic movements from civil society, by contrast, are one of the few non-violent paths that groups of citizens have to affect policy. It is well established as protected speech under the United States Constitution and cannot be compared to the actions of foreign governments. Kontorovich surely knows this, but chooses, unsurprisingly, not to address it.

That protection of civil society boycott must hold, whether or not the boycott is popular. The global BDS movement is certainly a flashpoint, and clearly, parts of it are distinctly anti-Zionist, often to an extreme, and reject the very concept of a two-state solution. While such attitudes are not universal in that movement, it is certainly fair to say that for many in the pro-Israel community, those views characterize the movement as a whole.

That, however, should not mean that our government should act against a boycott movement. Kontorovich is essentially correct in one of his statements: “the message of the BDS movement…is fundamentally rejected by the vast majority of Americans.” If that is the case, however, that argues AGAINST such legislation, not for it. To legislate against a well-established aspect of free speech should require an extraordinary threat. Yet Israel’s popularity in the United States certainly guarantees, at least for the immediate future, that Israeli products and services will continue to sell in the American market.

It is worth asking, however, how much impact it would have if, someday, the United States also chose to differentiate between settlement products and actual Israeli ones. Aside from the friendly trade deals that settlement products would not qualify for, might people be less inclined to buy products from settlements, which are much less popular than Israel, if they could tell the difference between them and Israeli ones?

Perhaps that is what really concerns Kontorovich, as well as AIPAC, which has been pushing this legislation. The BDS movement has had very little impact, to date, on Israel’s economy. Just to cite one example, one of the biggest victories they were involved in, the decision by the Presbyterian Church, USA (PCUSA) to divest from several companies they viewed as helping to support the occupation, exclusively targeted settlements. Moreover, PCUSA specifically stated that this was done based on its own initiative, and not as a part of the BDS movement.

Kontorovich’s arguments, and AIPAC’s legislation, raise a very fundamental question about restricting free speech. Is the United States willing to restrict free speech, albeit speech that is not very popular, when that speech is directed at another, allied country when the speech has clearly posed no material threat to that country? Is our standard for dangerous speech that low?

It also raises a key question related to American policy in the Israel-Palestine conflict. That question is whether the United States regards the settlements as part of Israel. Do we, in fact, agree with the most radical anti-Zionists and the most radical settlers, both of whom make no distinction between the settlements and the actual state of Israel?

More to the point, are we willing to stigmatize, penalize and perhaps someday even outlaw initiatives by many civil society groups, including many that are profoundly pro-Israel, that seek to end Israel’s occupation, reverse the settlement program and finally reach a two-state agreement?

Ultimately, Kontorovich and AIPAC are working with their arguments and legislation against those things. By hiding protection of settlements in language that seems to be defending Israel, they are moving that agenda forward. It’s important that this disingenuousness is exposed and people understand what they are really being asked to support.

On Wednesday, the Senate adopted an amendment to the Congressional Trade Priorities and Accountability Act of 2015 (TPA) designed to defend Israel against the global “Boycott, Divestment and Sanctions Movement” (BDS). A similar amendment was adopted in the House of Representatives. Whatever one thinks of the bill’s intentions, the actual content of it is troubling enough that it must be opposed, whether or not one opposes the global BDS movement.

Let’s dispense with one point right away. There is no comparison between the sort of actions this bill is targeting and the Arab League boycott of Israel, from which the United States has been defending Israel through legislation since 1977. The Arab League boycott had one purpose and that was to destroy the Israeli economy. It sought no change in policy. What it was protesting was Israel’s very existence.

A similar accusation is often made today against the global BDS movement. Whether one believes that accusation valid or not, there is no justification for barring economic actions which clearly target Israeli policies that are, surely, problematic to say the least. Can we, as Americans, truly justify stigmatizing or even criminalizing a business’ or an individual’s decision not to do business with companies based in Israel’s settlements beyond the Green Line?

This is a distinction that both amendments act to erase. Several times in both bills, the language refers not only to Israel but also to “territories controlled by Israel.” The bills, therefore, erase the distinction between Israel and the settlements it has established in occupied territory – territory that, even according to Israeli law, is not part of Israel.

It is important to remember that Israel has never extended Israeli law or made any official claim to sovereignty to territory beyond the Green Line, except for their claims on East Jerusalem and the Golan Heights, neither of which has been recognized internationally, including by the United States. So how can Congress justify treating the settlements as if they are part of Israel? And what are the implications of it doing so?

As cynical as it may sound, it seems that Congress needs no justification for this crude and short-sighted act beyond the urging of the American-Israel Public Affairs Committee (AIPAC), which strongly supports these amendments. One might understand the desire to shield Israel from BDS, just as the U.S. shields Israel from so many other potential consequences of its nearly half-century old occupation. But to willfully include the settlements, as these bills do, serves no obvious purpose other than to maintain that occupation.

The precedent this sets, and the message it sends, is nothing short of disastrous. Indeed, what it really does is pave the way for a one-state future, with no alternatives. It is ironic that, after the shock and opprobrium that greeted Israeli Prime minister Benjamin Netanyahu’s campaign pledge that there would be no Palestinian state on his watch, the United States Congress would take a step toward closing off the two state option, not with words, but with actual legislation.

That might sound like an overstatement. But consider what this legislation would mean.

True, most of the measures in this legislation deal with reporting, or Congress’ list of points of emphasis in trade negotiations. However, it sets a clear precedent that the settlements and Israel are a single unit. That can have grave implications down the road. For example, while the United States has routinely averted its gaze from the ways in which American aid to Israel helps sustain the occupation, the fact that at least technically, US weapons are not supposed to be used for this purpose and that US funds had to be kept within the Green Line matters. It is something to build on, to try to make a case with for increased stringency in monitoring Israel’s actions and, potentially, a lever to modify those actions.

More than that, the overwhelming majority of actions taken to try to convince Israel that there is an economic incentive for it to change its policies have been scrupulously targeted at the settlements. Two years ago, the European Union, which is the target of the anti-boycott legislation, issued guidelines based on existing EU law, prohibiting funding of any projects beyond Israel’s recognized borders. Several European companies and investment firms have stopped doing certain kinds of business with some of their Israeli counterparts either because the business supported the settlements or because the work involved would actually be in the West Bank. These are not wholesale boycotts of Israel, but are actions targeted specifically to the occupation and the settlements. Is that what Congress is trying to protect Israel from? If it is, that is a much more significant step against a two-state solution than any of Netanyahu’s campaign promises.

One can debate the merits of boycotts, but when a boycott is called due to the grievous policies of a government, it is a legitimate way for individuals, organizations and businesses to protest that policy. Congress should not be interfering with the choice of individuals and businesses as to how they might wish to use their dollars or euros to express their politics, as long as it is a political expression and not one, like the Arab League boycott, designed to bring all of Israel down because of its very existence.

What Congress is doing with this amendment is putting to paper the view that the West Bank is Israel. What does that imply?

First, it means that Congress is saying that Israel is an apartheid state. After all, in the West Bank there are millions of Palestinians who live under military law while the settlers live under civil law. Two peoples living under different laws administered by the same government is the textbook definition of apartheid. This is the very argument that truly anti-Israel forces use, and now Congress is making it for them.

Second, Congress is standing in clear and undeniable opposition to the vision, first articulated by none other than President George W. Bush over a decade ago, of two states living side by side in peace and harmony. After all, the entire premise of the two-state solution has always been that Israel is occupying territory that is not part of the sovereign state of Israel. This has been the view of not only the international community, but the High Court in Israel, and every Israeli government from 1967 until now.

Thus, Israel would be ending its occupation and de facto allowing a Palestinian state to come into existence. But if this is all one sovereign unit, as the new legislation implies, then we are talking about dividing an existing sovereign state when we mention a two-state solution. That has never been the argument for two states, and it is a much more difficult one to credibly make.

As JJ Goldberg correctly describes it in the Forward, “Proponents (of the global BDS movement) are divided on whether or not they seek to eliminate the independent existence of the state of Israel.” Congress, in a very bi-partisan fashion, is siding with the most anti-Israel elements of the BDS movement who also see the West Bank, Israel and Gaza as a single state, under Israeli rule and therefore an apartheid state.

Congress is also siding with the most radical elements of the settler movement, who see the West Bank and Israel as all part of one, holistic Greater Israel. Many of those settlers do not recognize the authority of the Israeli government, and frequently clash with the government and security forces.

Those are Congress’ fellow travelers in this sort of view, true opponents of the State of Israel. It could not be clearer: support for this legislation is about as far from being pro-Israel as one can get.

Israeli Prime Minister Benjamin Netanyahu won his fourth election last night in surprising fashion. He outdistanced the polls, including the exit polls in the waning hours of voting and won a decisive victory over the Zionist Union and Isaac Herzog. Here are some quick and initial takeaways from the results.

A huge victory for the Right

Even though the right wing/religious bloc in the Knesset didn’t grow, the right gained considerable power relative to
the last Knesset. The last government included two centrist parties, Yesh Atid, and Hatnuah. Yesh Atid actually was the biggest single party in it, with Likud having joined with Avigdor Lieberman’s party to gain a decisive lead in the 2013 elections. Hatnuah, though small, was very important to the coalition, as its head, Tzipi Livni was the fig leaf over the right wing that negotiated with the Palestinians.

This coalition is going to have a very different character. It is quite possible that Netanyahu will get the fully right-wing coalition he wants. It is very possible that the most moderate party in it will be Moshe Kahlon’s center-right Kulanu party. Kahlon is at best lukewarm on the two-state solution, although he has been critical of Netanyahu’s refusal to maintain negotiations. He probably described his view best when he said he supported Netanyahu’s 2009 Bar-Ilan speech. That’s the one Bibi just repudiated in the last days of the campaign.

Two States and Where America and American Jews Stand

No doubt, Netanyahu will try to walk back his rejection of a Palestinian state of any kind once he forms his new government. He can’t walk it back too far, given the nature of his coalition, but will seek just enough to allow people to believe that it is still possible under his watch if they so desire.

But given that very few were ever taken in by his Bar-Ilan speech, where he gave the most tepid support he could to two states, anyone who is serious about ending the conflict has to ask themselves where they stand now and what sort of policies must be pursued. The old policy is clearly a round peg for the square hole of Israel’s position.

Three sectors in particular must ask this question: mainstream Republicans who still hold on to George W. Bush’s outline; Democrats across the spectrum; and the mainstream of the International Jewish community.

Republicans have clung virtually as a unit to Bibi. Are they willing to continue to do so if that means, by definition, opposing a two-state solution? In 2012, the Republican National Committee adopted a resolution supporting Israeli rule over all the land between the Mediterranean and the Jordan Rivers. But this had little effect on elected officials, who distanced themselves from it when asked. That won’t be so easy if Bibi is perceived, correctly, as staunchly opposing two states.

Democrats have a starker dilemma. Opposition to a two-state solution, not to mention Netanyahu’s right-wing orientation on many other issues, clearly puts him outside the lines for almost all Democrats. But until Bibi started interfering in American partisan politics, they’ve been able to look past those differences as if they weren’t there. That won’t work now, but they will face considerable domestic pressure to do just that.

The same can be said for the American Jewish community. Divisions within the influential community are growing, and the tactics used by those who still wish to march in lock-step with Israel are becoming increasingly draconian and visible. That process is already underway, and this election will only accelerate it.

The choice before all these groups is not a one- or two-state solution, but whether or not Israel is going to allow Palestinians the basic rights, freedoms, and dignities that all of us expect and take for granted. From the most moderate to most radical analysis of how to resolve this conflict, that is what separates a supporter of peace from an opponent. And that is the question that these communities will have to resolve.

The Stark Choice For the International Community

At this point, there is no alternative in the realm of diplomacy to a two-state solution. The current period is one where new ideas, if they can be sold to the international community, could come to the fore, but so far, despite the attempts of some supporters of a bi-national or single secular state, they have not succeeded in penetrating the international discourse.

If Israel is going to refuse to seriously consider a two-state solution, then, the United States, United Nations, Arab League, European Union and any other international actors have a clear choice in front of them: either pack it in and give up on this issue or press Israel in unprecedented ways to concede on a two-state solution based on the generally recognized parameters (’67 borders with some swaps, shared Jerusalem, an agreed upon resolution of the Palestinian refugee issue).

The Obama Administration

The hostility between Obama and Bibi continues unabated. The White House is waiting until the last possible moment to extend its obviously reluctant congratulations. There is no doubt the relationship will continue to be strained.

On Iran, Bibi’s words to Congress could take on a little more weight in light of his victory, but on the whole very little should change as a result of the election. Obama needs to start making the case to the American public that this is a good deal, and he needs to start doing that now. But that’s no different from before.

It would be easy to be cynical, given the history of U.S.-Israel relations and Obama’s own non-confrontational style, that the United States will really press Israel. But Obama has very little to lose. Democrats will all be distancing themselves from his foreign policy in 2016, and his days as an elected official are done after that. He is certainly going to push hard on Iran. It is true that the American public recognizes Iran as a U.S. security issue. They do not view the occupation in the same way, even though it too presents serious security concerns for the United States.

The reality, however, is that without significant pressure, unprecedented pressure from the US, Israel will not move, not under Bibi. And increasing tensions, especially the possibility of lost exports to Europe, could move the Israeli electorate away from Bibi and even lead to early elections. Obama knows all this. The combination of his second term status and the rift on Israel Netanyahu opened up and later exacerbated by declaring his opposition to two states, puts Obama in an unusually advantageous position to take some bold steps to press Israel that would usually politically unfeasible.

That doesn’t mean he will take those steps. The forces opposing such actions are strong. But the opportunity is as good as it is likely to get in the foreseeable future.

The Overview

This wasn’t a referendum on Netanyahu, as many characterized it. This was a referendum on where the country should go, more centrist or more right. Netanyahu remains an unpopular and vulnerable leader, but he also remains the most popular of an unpopular bunch. In the end, Netanyahu won by waving the Arab boogeyman and saying that “droves” of Arabs were going to vote him out and gutting his right wing opponents by telling their voters that if they didn’t vote for Likud, Labor would rule again.

What the election did show was that the country is deeply divided, but that the trend of a rightward tilt continues. The solid performance of the Joint List was significant, but they drew a lot of voters away from the only fully left-wing Zionist party, Meretz, which barely survived.

Israel’s international isolation will continue to grow, and whether that growth is steady or accelerated will depend on both how much more brazen Netanyahu becomes and how much the U.S. and Europe are willing to tolerate before they take actions Israel will feel. It is not a hopeful scenario on any level.

 

Abbas signed on to 18 international agreements after the quixotic attempt to pass a resolution at the United Nations Security Council (UNSC) predictably failed. Among them was the 1998 Rome Statute, which established the ICC and took formal effect in 2002. This is the step that the U.S. and Israel have warned Abbas against most strongly. Among all the “unilateral steps” the Palestinians could take (which, one should note, is no more “unilateral” than any number of actions taken by Israel on a routine basis), this is the one Israel worries about most. Read more at LobeLog