In the Shadow of Delegitimization: Israel’s Sensitivity to Economic Sanctions | iNSS

The increased activity of the BDS movement has prompted various attempts to estimate the economic damage liable to result from the delegitimization campaign against Israel. An analysis of Israeli trade and investment patterns shows that the BDS movement’s ability to damage the Israeli economy depends primarily on the extent to which various governments are motivated to exert economic pressure on Israel for political reasons, or alternatively, to thwart such pressure. The memorandum cites economic, political, legal, and technical limitations that can significantly hamper the BDS movement in effectively applying most of the economic penalties it advocates. The scope of the immunity provided by these limitations, however, is liable to decline rapidly if governments decide to connect Israel’s policy on the Palestinian issue more closely with their economic relations with Israel. The findings of the study indicate that an increase in the intensity of the Israeli-Palestinian conflict has a negative impact on Israeli exports to the European Union countries, but does not affect exports to Israel’s other important trade partners. So far the effects of the conflict on trade with European Union countries have not been macro-economically significant, but this linkage is liable to increase and spread to trade with%