Arab League Boycott of Israel Page: 4 of 6
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the Israeli car market would have been 12% smaller leading to a $790 price increase per
car. Total welfare loss for the study year, 1994, would have been $89 million.9 Thus it
appears that since intra-regional trade is small, and that the secondary and primary
boycotts are not aggressively enforced, the boycott may not currently have an extensive
effect on the Israeli economy.
U.S. Activity to End the Arab League Boycott of Israel
The U.S. government officially opposes the boycott and works to end its
enforcement. For many years, language has been included in the foreign operations
appropriations acts concerning the boycott. Section 535 of the Foreign Operations,
Export Financing, and Related Programs Appropriations Act, 2006 (P.L. 109-102), states
that it is the sense of Congress that (1) the Arab League boycott is an impediment to peace
in the region and to United States investment and trade in the region; (2) the boycott
should be revoked and the CBO disbanded; (3) all Arab League states should normalize
relations with Israel; and (4) the President and the Secretary of State should continue
vigorously to oppose the boycott and encourage Arab states to assume normal trading
relations with Israel. U.S. embassies and government officials are to raise the boycott
with host country officials, noting the persistence of illegal boycott requests and the
impact on both U.S. firms and on the countries' ability to expand trade and investment.
The U.S. government also works to end the boycott through negotiating bilateral
trade agreements and through WTO accession agreements. In 2005 and 2006,
respectively, Bahrain and Oman agreed to drop the boycott as a provision of their free
trade agreements (FTA) with the United States. (The President has yet to submit to
Congress the proposed Oman FTA.) The United States is also negotiating an FTA with
the United Arab Emirates, and their enforcement of the boycott has been a contentious
issue during the negotiations. Finally, Saudi Arabia officially dropped the boycott as a
condition of joining the World Trade Organization in December 2005. However, it
appears that these countries may continue to sporadically enforce the boycott despite their
pledges to abandon it. U.S. companies continue to receive requests to participate in the
boycott from all of these countries, and Saudi Arabia has discussed increasing boycott
efforts against Israel despite their WTO obligations.10
U.S. Antiboycott Laws. The United States passed antiboycott legislation in the
late 1970s to discourage U.S. individuals from cooperating with the secondary and
tertiary boycotts."1 These laws are currently included in the Export Administration Act
9 Chaim Fershtman and Neil Gandal, "The Effect of the Arab Boycott on Israel: The Automobile
Market," Tel Aviv University, January 1996.
10CRS Report RS21846, U.S.-Bahrain Free Trade Agreement; CRS Report RL33328, Proposed
U.S.-Oman Free Trade Agreement and CRS Issue Brief IB93113, Saudi Arabia: Current Issues
and U.S. Relations. See also CRS Issue Brief IB82008, Israel: Background and Relations with
the United States.
" Although U.S. legislation and practices were designed to counteract the Arab League boycott
of Israel, in practice, they apply to all non-sanctioned boycotts.
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Arab League Boycott of Israel, report, May 19, 2006; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc808579/m1/4/: accessed January 20, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.