U.S. Secretary of State John Kerry is expected to unveil a framework for negotiations between Israel and the Palestinians within weeks. Amid growing pressures from economic boycotts, Kerry said the current status quo in the West Bank is \u201cillusionary\u201d and unsustainable. He had warned Israel of a glum response should it reject his peace plan.<\/p>\n
\u201cFor Israel, there\u2019s an increasing delegitimization campaign that has been building up. People are very sensitive to it,\u201d Kerry told<\/a> a security conference in Munich on Feb. 1. \u201cThere are talk of boycotts and other kinds of things. Are we all going to be better with all of that?\u201d<\/p>\n His comments drew angry responses from Israeli politicians. \u201cI would advise John Kerry and some Israeli leftists to at least hide their smiles when they talk about threats of boycotts on Israel,\u201d Dani Dayan, Israel\u2019s chief foreign envoy to the Yesha Council, an umbrella organization of Israeli settlement municipal councils, wrote<\/a> on Twitter. In a veiled reference to Kerry\u2019s comments, Naftali Bennett, who heads the pro-settler Habayit Hayehudi party, added<\/a>, \u201cWe expect our friends around the world to stand beside us, against anti-Semitic boycott efforts targeting Israel, and not for them to be their amplifier.\u201d<\/p>\n This is not the first time Kerry warned about impending boycotts. Last August, he cautioned that Israel could face a boycott campaign \u201con steroids\u201d if it continues the current settlement campaign that is entrenching Israelis on the occupied West Bank.<\/p>\n But never has the issue of boycotts caused so much vexation inside Israel\u2019s corridors of power. Israeli politicians have been trading barbs about who is fueling the situation. Bennett accuses Justice Minister Tzipi Livni of fanning the flames of boycott by warning about its potential risks<\/a>. Livni rejects the charge, saying it\u2019s rather Bennett and his right-wing governing coalition\u2019s support for the construction of settlements that is inciting boycotts and threatening Israel\u2019s economy.<\/p>\n The internal debate has also reached Israel\u2019s highest court<\/a>, which on Sunday heard arguments for and against an existing anti-boycott legislation. Approved in July 2011, the law targets individuals or entities that call for boycotting Israel or its settlements with monetary sanctions. While the state defended the law, human rights groups called for its annulment, saying it violated freedom of expression. The court initially froze the law<\/a> in December 2012 amid protests, asking the state to explain why it should be upheld.<\/p>\n \u2018Tip of the iceberg\u2019<\/b><\/p>\n Officials are warning against the potential economic consequences of boycotts linked to Israel’s settlements. On Jan. 30, Israel\u2019s Finance Minister Yair Lapid told<\/a> the local Army Radio that the implications will be felt by all Israelis alike. Even a limited boycott that reduces exports to Europe by 20 percent could cost the economy nearly $5.7 billion annually, Lapid added, saying it would ensure that every \u201cIsraeli citizen will feel (the consequences) straight in the pocket<\/a>.\u201d<\/p>\n Israel\u2019s mainstream media have also caught up to the issue. \u201cIt is beginning to have an impact on Israeli consciousness,\u201d Dahlia Scheindlin, a Tel Aviv\u2013based public-opinion researcher and political analyst, told Al Jazeera in an email interview last week. \u201cIt will help push Israelis towards (peace negotiations), because it is now coming from such diverse and mainstream sources, including governments, not just radical Palestinian activists.\u201d<\/p>\n In the past, Prime Minister Benjamin Netanyahu<\/a> brushed off boycotts as unethical and unjustified. But now he appears to be eyeing these latest developments more carefully. On Feb. 9, he convened a high-level ministerial meeting to discuss the growing threat of boycotts and sanctions against Israeli entities linked with the settlements. Livni and Lapid, who had openly voiced their concerns about boycotts, were excluded from the meeting. The ministers reportedly discussed<\/a> possible courses of action, including how to encourage anti-boycott legislation in \u201cfriendly\u201d countries. Nonetheless, the meeting \u2014 the first of its kind convened to discuss the economic ramifications of boycott initiatives \u2014 signals a sea change in the government’s collective psyche.<\/p>\n The ministerial meeting was prompted by the decision last month by PGGM, the second largest pension fund in the Netherlands, to divest from five of Israel\u2019s largest banks, citing their financial dealings with companies involved in settlement construction. PGGM is the second Dutch company to sever ties with Israeli businesses in the past three months. In December, the Dutch water company Vitens began divestment from its Israeli counterpart, Mekorot, because of Mekorot\u2019s operations in settlements. And the Dutch bank ING has asked Israeli banks to provide information about their dealings with illegal settlements.<\/p>\n Even if the boycotts don\u2019t force Israel to accept Kerry\u2019s framework deal, its belligerent attitude is increasingly untenable.<\/p>\n Boycotts and divestment initiatives are spreading across continental Europe. In January, Nordea and Danske Bank, two of Europe\u2019s largest financial institutions, announced their boycott of Israeli banks that maintain branches in the West Bank. Norway\u2019s multibillion Government Pension Fund Global (GPFG) has for the second time blacklisted<\/a> Africa Israel Investments and its construction subsidiary Danya Cebus because of their ties to West Bank settlements. The Norwegian fund, which invests the country\u2019s oil revenue surplus, first severed relations with the two companies in 2010<\/a>. Two other Norwegian financial entities, DNB and KLP, are reviewing their holdings with Israel.<\/p>\n These initiatives follow collective measures taken by the European Union last July to block funds, including grants, to Israeli entities operating in the West Bank. The EU ambassador to Israel, Lars Faaborg-Andersen, recently warned that individual countries within the bloc are closer to taking steps to single out and add identifying labels for goods manufactured in the settlements.<\/p>\n The boycotts are not affecting only companies that operate across the Green Line \u2014 the de facto border between Israel and the occupied Palestinian territories prior to the 1967 war. Even firms inside Israel proper involved with groups that operate in or have commercial ties with the settlements are feeling the pressure. \u201cMore European companies are beginning to realize that settlements are the biggest obstacle to a negotiated solution,\u201d said Elisabeth Koek, a senior legal researcher at the Palestinian human rights group Al Haq. \u201cThis is only the tip of the iceberg when it comes to corporate entities extending their due diligence to include international humanitarian law considerations.\u201d<\/p>\n Israel\u2019s dilemma <\/b><\/p>\n The rise in boycott and divestment initiatives highlights, in part, the success of the BDS (boycott, divestment and sanctions) movement, a grassroots-based Palestinian campaign that calls for the end of occupation and equal treatment of Palestinian citizens of Israel. \u201cThe BDS movement [has] reached a tipping point in the Western mainstream,\u201d said Omar Barghouti, a Palestinian human rights activist and co-founder of the movement. \u201cA growing number of Western artists and bands now refuse to perform in Israel.\u201d<\/p>\n Barghouti also pointed to growing support for academic boycott of Israel in the U.S., Germany and Ireland as key indicators of this \u201cqualitative leap.\u201d Germany recently<\/a> withdrew from all research and technology agreements with Israeli companies and research entities that are linked to settlements.<\/p>\n Last month, a controversy over actress Scarlett Johansson\u2019s role<\/a> as a \u201cbrand ambassador\u201d for the Israeli appliance maker SodaStream threw the boycott movement into the limelight. Johansson\u2019s association with the anti-poverty charity Oxfam America gave the BDS movement a huge publicity boost, forcing her to resign from Oxfam, where she served as a global ambassador for the last eight years.<\/p>\n Israel understands the potential impacts of the growing divestment initiatives. About 33 percent of its exports go to the EU. Exports from the settlements to Europe are estimated to be around $300 million annually<\/a>.<\/p>\n Tel Aviv faces an important dilemma on how to deal with a growing boycott movement. It can ignore it and risk having the popular debate dominated by BDS supporters, or it can engage with the boycotts, possibly giving the movement a broader platform. In the meantime, Israel has chosen to remain silent. In response to emailed queries on Feb. 3, the Foreign Ministry said it has \u201cno comment on this issue.\u201d<\/p>\n Even if the boycotts don\u2019t force Israel to accept Kerry\u2019s framework deal, its belligerent attitude is increasingly untenable. According to a global public opinion poll by BBC\u2019s GlobeScan<\/a>, in the last few years Israel consistently trailed only North Korea as the most unpopular country in the world. Barghouti attributes the \u201cerosion\u201d of Israel\u2019s worldwide standing to two factors: the BDS movement and the dramatic rise of a fanatic right in Israel. Some Israeli politicians are now coming to grips with this waning global influence. \u201cLet\u2019s not kid ourselves … the world listens to us less and less,\u201d Lapid told<\/a> a Tel Aviv security conference.<\/p>\n Whatever Kerry has planned, the economic and educational boycotts may not be enough to pressure Israel into accepting his peace plan. But the cascading threats of boycotts and international isolation have already left Israel more frazzled than ever. \u201cThe rise of the boycott has planted in the national consciousness: that for Israel as the oppressor of the Palestinians, there\u2019s nowhere to go but down,\u201d Larry Derfner, former columnist for The Jerusalem Post, wrote<\/a> in the blog +972 about the psychological effect of the boycotts. \u201cThere\u2019s nothing to look forward to but more rejection, further isolation. And that\u2019s something Israelis can\u2019t live with.”<\/p>\n For now, this may just prove to be more of an incentive for change than the actual economic ramifications of the boycott.<\/p>\n __________________________<\/p>\n Dalia Hatuqa has been covering the Palestinian-Israeli conflict since 2000. She is a Ramallah-based print and broadcast journalist who has been published in The Economist, Foreign Policy, The Atlantic and other outlets. She has also been hosted on the BBC and Monocle as a commentator.<\/i><\/p>\n