UK bans trade with Israeli West Bank settlements

Vishala Sripathma (0:01)

Will sanctions succeed where diplomacy has failed?

Mike Huckabee (0:04)

I just don't think maybe the Brits are thinking through the implications of this policy they're about to enact, because when they do, are they willing to stop doing business with a number of US states in which they currently have commerce? Because that's what's gonna happen.

Vishala Sripathma (0:18)

It's World Business Report from the BBC World Service.

I'm Vishala Sripathma. On the way, we take a look at the growing economic pressure on the West Bank, as the UK, France and Canada slap economic sanctions on Israeli settlements there. Plus, Canada hits back in the trade war with the US. Some businesses are worried they'll pay the price, plus art thieves strike again in France.

So, the UK has announced fresh sanctions targeting Israeli settlements in the occupied West Bank, including a ban on trade with businesses there. The move is part of a joint declaration backed by a dozen countries increasing international pressure on Israel over the expansion of settlements in the territory. Israel has responded by announcing plans to close the British Consulate in East Jerusalem and unveiling a number of other measures in retaliation. Speaking in Parliament earlier, the British Foreign Secretary Ed Miliband said the UK was acting because it believes the current situation is making the prospect of a two-state solution increasingly difficult. Here's what he had to say.

Ed Miliband (1:32)

Ethnic cleansing is defined by the UN as a purposeful policy designed by one ethnic or religious group to remove by violent and terror-inspiring means the civilian population of another ethnic or religious group from certain geographic areas.

The British government agrees that there is ethnic cleansing of Palestinians in areas of the West Bank, perpetrated by settler terrorists. And all too often, the Israeli government has turned a blind eye to this, and worse, members of it have made statements and taken actions to support the forced displacement of Palestinians. Now, Madam Deputy Speaker, I recognize the gravity of saying this, but the truth is, the least the people who face such suffering deserve, and it should be the prelude to justice.

Vishala Sripathma (2:22)

So strong words there by the Foreign Secretary here in the UK. The US ambassador to Israel is Mike Huckabee. He says without a doubt, there will be repercussions.

Mike Huckabee (2:33)

I just don't think maybe the Brits are thinking through the implications of this policy they're about to enact, because when they do, are they willing, and I'm going to use the expression again, are they willing to find 25% of their pharmaceuticals somewhere else? Are they willing to stop doing business with a number of US states in which they currently have commerce? Because that's what's going to happen.

Vishala Sripathma (2:55)

Maulman Sinklot is a Palestinian local exporter in the Occupied West Bank who sells to the UK. Maulman believes ending trade with settlements could curb its growth.

Maulman Sinklot (3:05)

Settlers are very active in the Jordan Valley and increasingly active.

And they are not obeying any laws or rules or anything, even from the Israel army itself. They are going to the fields of the growers, they are stealing from them, and they are controlling more and more land.

Vishala Sripathma (3:21)

So differing reactions on what these sanctions might actually do.

Joining us now is Megan Sutcliffe, a geopolitical and security analyst with private intelligence firm Sibylline. Hi, Megan.

Megan Sutcliffe (3:33)

Good evening.

Vishala Sripathma (3:34)

Megan, thanks for joining us. Megan, in purely economic terms, how significant are these sanctions? Will it be felt by the Israel economy?

Megan Sutcliffe (3:44)

Well, it's not exactly clear the extent to which the ban on the import of goods from illegal settlements in the West Bank is going to be to the trading relationship between Israel and the UK and therefore the Israeli economy.

Israel and the UK engaged in approximately six billion pounds worth of trade in the last financial year, but it's not clear how much of that stemmed from activity in the West Bank. And it is even less clear how much of that stemmed from activity in illegal settlements in the West Bank, which are what are being targeted by the UK's measures today. This paints a complex economic picture. But when we're looking at the tensions that this has brought between the UK and Israel and the implication that will have for broader trade, unfortunately, the situation does not look particularly positive. Yes.

Vishala Sripathma (4:30)

And on that point about broader trade, could this widen? Can we see measures affecting the much larger UK-Israel trading relationship?

Megan Sutcliffe (4:41)

Unfortunately, that is something that is going to be increasingly likely if we see the UK moving forward and implementing these measures on the six- to nine-month timeframe that Ed Miliband outlined earlier today in the House of Commons.