What do the BDS movement and Brexit have in common? A lot, actually.
If you don’t live in Europe, you might not think that Thursday’s referendum on whether or not Great Britain should remain in the European Union has much to do with you. But, if you care about Israel’s economy and are opposed to the BDS movement (boycott, divestment, and sanctions against Israel), you should be urging all of your British friends to vote Remain. Here’s why:
The British economy will go berserk.
If the UK decides to withdraw from the European Union, the terms of its exit will be decided over the course of the next few years. However, the British currency and stock markets will respond immediately — and that will not be good for Israel. Already, the sterling and London Stock Exchange (LSE) have responded to projections that the UK will vote to remain in the EU: An index of the top 100 LSE companies saw its largest rise in four months this week, and the British Sterling saw its largest rise in eight years.
Right now, the market is responding very positively to pure speculation — a true exit would cause resounding damage, especially given the historic low in British interest rates, which would prevent the British Central Bank from effectively warding off a recession as they did in 1992 and 2008.
Brexit would make Israeli products more expensive for British consumers.
With $5.5 billion in goods and services exchanged annually, the United Kingdom is one of Israel’s largest trading partners, second only to the United States. Even during Israel’s 2014 conflict with Gaza, trading partners in the UK seemed undeterred and unswayed by the BDS movement, as trade levels reached record highs. The best way to discourage this relationship would be to raise the price of Israeli goods for British consumers without raising their quality or quantity. This is precisely what would happen in the event of a Brexit. As I’ve written before, even in times of war, the shekel is very likely to remain stubbornly high. This, combined with a depreciating sterling, would make Israeli goods more expensive for British consumers, causing trade to stall at a time when it’s already plummeting. As of last month, Israeli exports are already at a seven year low. A Brexit would only make things worse.
A Brexit could have the potential to deprive Israel of their largest market…or worse.
When considered as a block, the 28 countries that make up the European Union constitute Israel’s largest trading partner. One of the biggest benefits to Israel that comes from a unified EU is the 1975 Cooperation Agreement, which grants Israel preferential status as a free trading partner in most sectors and allows for enhanced strategic regional cooperation. While this is unlikely to change anytime soon, without the UK’s influence, the European Union is more likely to impose further restrictions on settlement products (which already fall outside of this agreement) or Israeli products in general, and prioritize their existing trade relations with other Middle Eastern nations — such as the Gulf Cooperation Council, Iran, and Iraq, many of whom have interests antithetical to Israel. Currently, the EU is Iran’s 4th largest trading partner, but they used to be their largest; with the 2015 passage of the Joint Comprehensive Plan of Action, the path is paved for a return to historic levels of trade (and beyond) between Iran and the EU.
Additionally, while it is unlikely that other countries will decide to leave the EU in droves just because Great Britain does, “euroscepticism” is not uniquely British — a recent Pew Report found that 61% of those in France held an unfavorable view of the European Union. If the UK decides to end its role in the European project, eventually, others might as well, and the economic consequences for Israel would be disastrous.
A Brexit would leave Israel vulnerable during the peace process.
On Monday, all 28 foreign ministers (who together form the European Union’s Foreign Affairs Council) signed onto a French peace initiative calling for restarting the Israeli-Palestinian peace talks in an international forum by year’s end. Their report, authored in collaboration with the United States, Russia, and the notoriously unfriendly UN, is expected to contain measures for curbing Israeli settlement activity in the West Bank. More troublingly, a potential upgrade of Israel to “special and preferred partner” status (first proposed in 2013) is expected to be dangled, as well as additional aid to the region, contingent upon Israel caving to European demands — an event incredibly unlikely to happen, particularly with the current Israeli government. With a Brexit, Israel would lose a valuable political ally within the EU. Since even before Israel’s creation, UK leaders have been outspoken in their support for the Jewish state. Outside of the EU, the UK would lose much of its ability to influence EU security and diplomatic policy, to Israel’s peril.
Without the UK’s Influence, BDS could gain traction.
Much to the chagrin of anti-Israel activists, BDS against Israel has had very little economic impact. However, with a Brexit, this could begin to change in Europe. While the UK has certainly not been immune to BDS activity, the most fervent BDS advocates with political power do not make their home in Great Britain. As UK Prime Minister David Cameron noted in a speech at a Jewish event on Monday evening, “when Europe is discussing its attitude to Israel, do you want Britain - Israel’s greatest friend - in there, opposing boycotts, opposing the campaign for divestment and sanctions, or do you want us outside the room, powerless to affect the discussion that takes place?”
Why BDS and Brexit Go Hand in Hand
Laura E. Adkins is the Forward’s Deputy Opinion Editor and runs Scribe, the Forward’s Contributor Network. She holds a B.A. in Economics from NYU and grew up in Southwest Missouri. She writes about data, orthodoxy, kosher wine and builds interactive maps — though usually not all at the same time. Contact Laura at email@example.com, like her page on Facebook, or follow her on Twitter.