The Arab League boycott of Israel is a systematic effort by Arab League member states to isolate Israel economically in support of the Palestinians to prevent Arab states and discourage non-Arabs from providing support to Israel and adding to Israel's economic and military strength. Historically, the boycott was also designed to deter Jewish immigration to the region.
While small-scale Arab boycotts of Zionist institutions and Jewish businesses began before Israel's founding as a modern state, an official organized boycott was only adopted by the Arab League after the 1948 Arab-Israeli War. The implementation of the boycott has varied over time among member states with a number of member states of the Arab League no longer enforcing the boycott.
Ad-hoc boycott attempts of Jewish businesses
According to Divestment Watch, whose stated mission is "leading the fight against the Divest-from-Israel campaign", Arab boycotts of Jewish interests started as early as 1922, 26 years before the establishment of Israel. The original boycott forswore with any Jewish owned business operating in the British Mandate of Palestine. Palestinian Arabs "who were found to have broken the boycott ... were physically attacked by their brethren and their merchandise damaged" when Palestinian Arabs rioted in Jerusalem in 1929. Another, stricter boycott was imposed on Jewish businesses in following the riots that called on all of the Arabs in the region to abide by its terms. The Arab Executive Committee of the Syria-Palestine Congress called for a boycott of Jewish businesses in 1933 and in 1934, the Arab Labor Federation conducted a boycott as well as an organized picketing of Jewish businesses. In 1936, the Palestinian Arab leadership called on another boycott and threatened those who did not respect the boycott with violence, however, this boycott was unsuccessful as Jewish lawyers, physicians, and hospitals were too heavily integrated into Palestinian society.
Aiming to isolate the Jewish community economically, on December 2, 1945, the newly formed Arab League Council declared a formal boycott: "Jewish products and manufactured goods shall be considered undesirable to the Arab countries." All Arab "institutions, organizations, merchants, commission agents and individuals" were called upon "to refuse to deal in, distribute, or consume Zionist products or manufactured goods."  The official explanation for the boycott was to support the Palestinian Arabs against Zionism, however, in practice, the Arab states used the boycott to prevent Jewish products from entering Arab countries and stunting the development of the local economies. While the boycott was officially against Jewish products, Arab products from Palestine were also boycotted. Palestinian Arabs' complaints to the Arab Higher Committee and the Arab League as well as Palestinian Jews' complaints to the British about the application of the boycott mostly fell on deaf ears.
Organized boycott of Israel
Officially, the Arab League boycott covers three areas:
- Products and services that originate in Israel (referred to as the primary boycott and still enforced in many Arab states)
- Businesses in non-Arab countries that do business with Israel (the secondary boycott)
- Businesses shipped or flew to Israeli ports (the tertiary boycott)
At one point the boycott was observed by the entire Arab League. Today, only Lebanon and Syria adhere to it stringently. The boycott list was maintained by a special office within the Arab League called the "Central Boycott Office." Each participating Arab League state had its own national office. The Central Boycott Office has always been headquartered in Damascus, although there was no meeting of the coordinating committee from 1993 to 2002 due to the fact there was no quorum.
The secondary boycott threatened companies outside the Arab world "from investing in Israel, building plants, granting franchises, or any cooperation beyond trade. Companies that violated the instructions of the boycott offices were blacklisted." The products of foreign artists, filmmakers, and musicians are also boycotted if they are considered to be too close to Israel.
In addition to goods and businesses, many Arab states refuse to allow entrance to anyone who uses an Israeli passport or who has any Israeli stamp in his or her passport. The stamp may be a visa stamp, or a stamp on entry or departure. It can also include a stamp of another country which indicates that the person has entered Israel. For example, if an Egyptian departure stamp is used in any passport at the Taba Crossing, that is an indication that the person entered Israel.
Countries that do not accept Israeli passports
- Algeria 
- Bangladesh 
- Brunei 
- Djibouti 
- Iran 
- Kuwait 
- Lebanon 
- Libya 
- Malaysia (Clearance permit needed from the Ministry of Internal Security). 
- Pakistan 
- Saudi Arabia 
- Sudan 
- Syria 
- United Arab Emirates 
- Yemen 
Although it cannot be estimated to what extent the boycott hurt Israel's economy, the boycott cannot be said to have affected it to the extent the Arabs intended. Israel's economy has performed relatively well since 1948, achieving a higher GDP per capita than that of all Arab countries but Bahrain, Kuwait, United Arab Emirates and Qatar, the boycott nevertheless has undoubtedly harmed Israel. The Israeli Chamber of Commerce estimates that with the boycott Israeli exports are 10 percent less than they would be without the boycott and investment in Israel likewise 10 percent lower.
Arab countries suffer economically from the boycott as well. In its report on the cost of conflict in the Middle East, Strategic Foresight Group estimates that Arab states have lost an opportunity to export $10 billion worth of goods to Israel between 2000-2010. Moreover, the Arab states of the Persian Gulf and Iran together stand to lose $30 billion as the opportunity cost of not exporting oil to Israel in the second half of this decade.
Because of the boycott, certain products which were ubiquitous elsewhere in the world, such as Pepsi, McDonald's and most Japanese cars were not to be found in Israel until the boycott began waning in the late 1980s. A similar situation existed in the Arab world which boycotted the products of companies that were selling in Israel as in the case of Coca-Cola.
Despite the boycott, Israeli goods often do make it to Arab markets in boycott countries. Typically, the Israeli goods are sent to a third country and then reshipped to an Arab state. Cyprus is the greatest transshipment point. In 2001, Cyprus imported $164 million in Israeli goods, but only exported $ 27.5 million to Israel. It is probable that the bulk of that enormous Israeli trade surplus ends up in the Arab world. Naturally, Israeli products are not heavily boycotted in the Palestinian territories and often make it into the larger Arab world through the Palestinians.
Weakening of the boycott
In the 1970s, American Jewish Committee spearheaded the fight to pass anti-boycott legislation to counter the Arab League boycott of Israel.
In 1977 the Congress of the United States passed a law that then-President Jimmy Carter signed, and according to which fines would be levied on American companies which cooperate with the boycott. For the surveillance after the implementation of this law, an office called the "Office of Antiboycott Compliance" was opened in the United States as part of the American trade ministry. Despite the fines, there were some American companies (like McDonald's) which preferred to pay the fine than break the boycott and endanger loss of business with the Arab world.
Egypt was the first nation to abandon the boycott, doing so in 1980. Jordan followed in 1995. The Palestinian Authority likewise agreed not to abide by the boycott in 1995. In 1994 several of the Arab states of the Persian Gulf abandoned the secondary and tertiary boycotts. The period also saw "low-level diplomatic relations between Israel and Morocco, Mauritania, Oman, and Qatar. Today, most Arab states, Syria being the exception, no longer attempt to enforce the secondary or tertiary boycotts although by now Coca-Cola can be found in Syria. As the boycott was relaxed (or rather, not as stringently enforced) starting in the late 1980s and early 1990s, many companies which previously stayed out of the Israeli market had entered it, e.g. McDonald's, Toyota, Nestlé, etc.
Though not an Arab state, Iran attempts to enforce the secondary and tertiary boycotts.
During the al-Aqsa Intifada there were calls for a renewal of the boycott and the boycott council finally met again. However, these meetings came to nothing. In 2005, shortly after the Gaza disengagement, Bahrain announced that it was completely withdrawing from the boycott. The withdrawal of Bahrain from the boycott was in order to ease the approval of free trade agreements between Bahrain and the United States. The decision to leave the boycott sparked harsh criticism of this move by the Bahraini public, and on October 11 the Bahraini parliament voted for a non-binding resolution asking for Bahrain to return to participating in the boycott.
In 2005, Saudi Arabia announced the end of its ban on Israeli goods and services, mostly due to its application to the World Trade Organization, where it is illegal for one member country to ban trade with another. However, as of summer 2006 Saudi boycott was not cancelled.   
On May 16, 2006, after four-day conference of the Arab Boycott Bureau in Damascus, Syria, a "source close to the conference" reported that "the majority of Arab countries are evading the boycott, notably the [Persian] Gulf states and especially Saudi Arabia. ... The boycott deteriorated a lot, regressed and even almost collapsed... We should not lie on each other, because the boycott is quasi... paralyzed." 
However, reporting by the Jerusalem Post has found that many countries and entities are still enforcing aspects of the boycott, including the UAE and its Dubai Ports World firm,  and the Sultanate of Oman. 
In November, 2006, The Jerusalem Post reported that "According to material compiled by the US Commerce Department's Bureau of Industry and Security, ... Arab states made a total of 201 boycott-related requests in all of 2005, or fewer than 17 per month. By contrast, US firms have reported receiving 120 boycott-related requests in just the first six months of this year, for an average of 20 per month, marking an increase of nearly 20 percent over the rate recorded last year." and "it appears that at least seven Arab countries, including ostensible US allies such as Bahrain, the United Arab Emirates (UAE), Kuwait and Iraq, are enforcing the terms of the Arab boycott more energetically this year than in 2005. At the top of the list is the UAE, which made 40 boycott-related requests during the period of January to June, followed by Syria, with 20."
Foreign reactions to the boycott
The United States adopted two laws that seek to counteract the participation of U.S. citizens in other nation's economic boycotts or embargoes (although these laws do not restrict the ability to engage in disinvestment campaigns.) These "antiboycott" laws are the 1977 amendments to the Export Administration Act (EAA) and the Ribicoff Amendment to the 1976 Tax Reform Act (TRA). The antiboycott provisions of the Export Administration Regulations (EAR) apply to all "U.S. persons," defined to include individuals and companies located in the United States and their foreign affiliates, and prohibit them to participate in unsanctioned boycotts against other nations, punishable by fines of up to $50,000 or five times the value of the exports involved or jail term of up to 10 years.
Conduct that may be penalized under the TRA and/or prohibited under the EAR includes:
- Agreements to refuse or actual refusal to do business with or in Israel or with blacklisted companies.
- Agreements to discriminate or actual discrimination against other persons based on race, religion, sex, national origin or nationality.
- Agreements to furnish or actual furnishing of information about business relationships with or in Israel or with blacklisted companies.
- Agreements to furnish or actual furnishing of information about the race, religion, sex, or national origin of another person.
Of all the Western countries, only the United Kingdom failed to pass legislation against the Arab boycott. Despite this, many companies in Western nations practice some degree of compliance with the boycott.
- ↑ Turck, Nancy (April 1977). "The Arab Boycott of Israel". Foreign Affairs (Council on Foreign Relations) 55 (3): 472–493.
- ↑ 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 Feiler, Gil. "Arab Boycott." The Continuum Political Encyclopedia of the Middle East. Ed. Avraham Sela. New York: Continuum, 2002. pp. 54-57
- ↑ Background: US Anti-Boycott Law and the Divest-from-Israel campaign (Divestment Watch)
- ↑ Boycott Watch Contends: Divest-from-Israel Campaigns May Violate the Federal Antiboycott Law (Boycott Watch) July 28, 2004
- ↑ Feiler, Gil. "From boycott to economic cooperation ...." Google Books. 2 September 2009.
- ↑ The Arab Boycott by Mitchell Bard (JVL)
- ↑ "Important Note: Travelers holding passports that contain visas or entry/exit stamps for Israel are likely to be refused entry into Lebanon." (Lebanese Ministry of Tourism)
- ↑ "Arab and foreign arrivals to Syria should have the following: A Passport valid for a period not less than one month after the elapse of the period of the entry visa, provided that the passport is issued by a state recognized by Syria, does not carry an Israeli visa, and the name of the passport owner is not listed among those forbidden from entering Syria." (Syrian Ministry of Tourism)
- ↑ Jews of Yemen
- ↑ Cost of Conflict in the Middle East report by Strategic Foresight Group, January 2009
- ↑ Saudi Arabia Continues Boycott of Israel By David Krusch. Jewish Virtual Library. August 2, 2006
- ↑ Saudi Ambassador Says Trade Boycott of Israel Will Not End By ELI LAKE. New York Sun June 21, 2006
- ↑ PDF (42.1 KiB) CRS Report for Congress by Martin A. Weiss. Order Code RS22424. April 19, 2006
- ↑ Arabs evading economic boycott of Israel
- ↑ Dubai ports firm enforces Israel boycott by Michael Freund (The Jerusalem Post) February 28, 2006, Updated March 7, 2006. Accessed July 21, 2006
- ↑ Boycott of Israel still in effect, Omani official tells ’Post’ by Michael Freund (The Jerusalem Post) June 8, 2006. Accessed July 21, 2006
- ↑ Arab states step up anti-Israel activity by Michael Freund (The Jerusalem Post) Nov. 2, 2006
- ↑ "Office of Antiboycott Compliance". U.S. Bureau of Industry and Security. http://www.bis.doc.gov/AntiboycottCompliance/oacrequirements.html#whatsprohibited.
- ↑ Impact of U.S. Policy on the Arab League Boycott of Israel by Adam B. Cordover