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US Trade Representative National Trade Estimate Report On The Arab
League
By Fred Taub
April 3, 2000
(Arab
League boycott of Israel is impediment to U.S. trade in region)
 The
Office of the U.S. Trade Representative (USTR) March 31 released its annual
report on foreign trade barriers, which outlines both problems and progress in
efforts to remove barriers to trade and investment.
The "2000 National
Trade Estimate Report on Foreign Trade Barriers," (NTE) covers 54 major U.S.
trade partners.
A PDF version of the entire report can be found on the
web at: http://www.ustr.gov/reports/nte/2000/contents.html:
Following is the text of the section on The Arab League:
(Begin
text)
THE ARAB LEAGUE (Boycott of Israel)
The Arab League
boycott of the state of Israel is an impediment to U.S. trade and investment in
the Middle East and North Africa. Arab League members include the Palestinian
Authority and the following states: Algeria, Bahrain, Comoros, Djibouti, Egypt,
Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Qatar, Saudi
Arabia, Somalia, Sudan, Syria, Tunisia, the United Arab Emirates (UAE), and
Yemen. However, not all Arab League members participate in the boycott.
The primary aspect of the boycott prohibits the importation of
Israeli-origin goods and services into boycotting countries. The secondary and
tertiary aspects of the boycott discriminate against U.S. and other foreign
firms that do business with both Israel and boycotting countries and directly
affect U.S. exports to the region. The secondary boycott prohibits any entity
in Arab League states from engaging in business with U.S. or other foreign
firms that contribute to Israel's military or economic development. The
tertiary boycott prohibits business dealings with U.S. and other firms that do
business with blacklisted companies. Such firms are placed on a blacklist
maintained by the Damascus-based Central Boycott Office (CBO), a specialized
bureau of the Arab League.
The CBO uses a variety of means to determine
compliance with the boycott, including analyzing information obtained through
questionnaires sent out to third-country individuals and firms. If the CBO
suspects that a firm has engaged in proscribed activities, it may recommend
that the Israel Boycott Offices of the member states add the firm to the
blacklist. Boycott offices of Arab League states are supposed to meet in
Damascus twice a year to consider adding foreign firms to (or removing foreign
firms from) the blacklist. There has been no regional boycott meeting since
April 1993 because of the inability to assemble a quorum, and some states have
dismantled their boycott offices entirely. However, the semiannual Arab League
Ministerials have sometimes discussed boycott issues.
While the legal
structure of the boycott in the Arab League remains unchanged, its enforcement
varies widely from country to country. Some member governments of the Arab
League have consistently maintained that only the Arab League as a whole can
revoke the boycott. Other member governments support national discretion on
adherence to the boycott, and a number of states have taken steps to dismantle
their adherence to some aspects of it. More specifically, Egypt has not
enforced any aspect of the boycott since 1980, pursuant to its 1979 Treaty of
Peace with Israel. Jordan formally terminated its adherence to all aspects of
the boycott effective August 16, 1995, when legislation implementing its Treaty
of Peace with Israel was enacted. The Palestinian Authority agreed not to
enforce the boycott in a 1995 letter to then-U.S. Trade Representative Kantor.
The Gulf Cooperation Council countries (Bahrain, Kuwait, Oman, Qatar,
Saudi Arabia, and the United Arab Emirates) announced in September 1994 their
non -adherence to the secondary and tertiary aspects of the boycott (a decision
that Kuwait had announced previously).
In 1996, both Oman and Qatar
ended boycott enforcement and established reciprocal trade arrangements with
Israel. Other Arab League members that have stopped enforcing the boycott
include: Mauritania, Morocco, and Tunisia, which have recognized Israel through
establishment of limited diplomatic relations; Yemen, which formally renounced
observance of the secondary and tertiary aspects of the boycott in 1995; and
Algeria, which still adheres in principle but not in practice to the boycott.
In Lebanon, the primary boycott is generally enforced, but Lebanese officials
selectively enforce the secondary and tertiary boycotts.
While the
boycott is no longer an issue in most Arab League countries, it remains a
substantive impediment to doing business in those countries which still rigidly
impose its terms. In this respect, Syria continues to be among the strictest
adherents to the boycott. Although it allows goods to be imported with a
positive, rather than negative, country of origin certificate, Syria strictly
monitors and controls entry into its ports by ships that have made calls in
Israel, and it often requires certifications of commercial activity in Israel
by companies seeking to register trademarks or acquire import licenses.
Under U.S. antiboycott legislation enacted in 1978, U.S. firms are
prohibited from providing any information about business relationships in
response to a boycott request and are required to report receipt of any such
request to the U.S. Department of Commerce's Office of Antiboycott Compliance.
U.S. antiboycott laws also prohibit U.S. persons from taking certain other
actions, including refusal to do business with a blacklisted company.
Encouragingly, the number of boycott-related requests to U.S. firms to take
prohibited actions continues to fall across the region. Boycott compliance
requests most often reflect obsolete references in procurement or import
documents, or a reluctance to make overt changes in document templates, rather
than official policy. Although there have been exceptions, requests that
foreign firms comply with secondary and tertiary boycott certifications are
typically withdrawn when challenged. The fact that the de jure status of the
boycott and U.S. law remain unchanged, however, make s the boycott a continuing
problem for firms that may have to report boycott -related requests.
Where enforced, the boycott serves as a ban or zero quota on the
products of a blacklisted firm. While it is unevenly applied, the boycott
results in economic harm to U.S. firms in terms of lost sales, foregone
opportunities, and distortion of investment decisions that are difficult to
quantify accurately. The United States continues to oppose the boycott.
Embassies and visiting officials raise the boycott with country officials,
noting the persistence of prohibited boycott requests and the impact on both
U.S. firms and on the countries' ability to expand trade and investment.
(End text)
(Distributed by the Office of International
Information Programs, U.S. Department of State. Web site:
usinfo.state.gov)
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