Put conditions on Israel’s OECD entry

Israeli accession to this group of nations must be contingent on a commitment to embark on a credible peace process

* Avi Shlaim and Simon Mohun
* guardian.co.uk, Friday 7 May 2010 09.35 BST

In the absence of any last-minute objections, Israel will be welcomed as a member of the Organisation for Economic Co-operation and Development at its annual ministerial council in Paris on 26-28 May.

A successful outcome to the long-standing Israeli campaign to be admitted to the OECD would be hailed by Israeli government ministers as a major diplomatic triumph at a time when they have come under growing global criticism for the policy of building settlements on occupied Palestinian land.

It is vital therefore that the OECD makes Israeli accession conditional on tangible improvements in its human rights record and a commitment to embark on a credible peace process.

In November 2007, a process was set in motion with the ultimate goal of admitting Israel to the prestigious club of developed high-income democracies.

The working committees charged with examining whether Israel meets accepted standards have quietly finished their work and submitted their findings.

The committees did raise a number of “technical questions”: over intellectual property issues, over foreign bribery involving the defence industry and, last but not least, over the small issue of the territorial scope of Israel’s economic data, under which Israel insists on including settlers in the occupied territories, while excluding their Palestinian inhabitants.

However, all these have now been broadly resolved to the satisfaction of all 30 member countries of the OECD – even of the UK, which was the first to question the inclusion of statistics from the occupied territories.

The issue of statistics has apparently been resolved by inserting a simple disclaimer, according to which the OECD will use Israeli data but add that its use “is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law”.

So quietly has the process progressed that at no stage have the political ramifications of Israel’s accession been open to public debate. That the benefits for Israel would be immense is evidenced by the energetic lobby for Israeli accession by the Bank of Israel’s governor, Stanley Fischer, and by the strongly pro-Israel American Israel Public Action Committee .

Stated OECD values include “a commitment to pluralist democracy based on the rule of law and the respect of human rights”.

Israel’s numerous breaches of human rights principles and of international humanitarian law, whether during the Gaza offensive in the winter of 2008-09 or through the continuous expansion of its settlement project in the West Bank, clearly contravene this commitment.

The blockade of Gaza, severely restricting the flow of food, fuel and medical supplies to its 1.5 million inhabitants, is a form of collective punishment, clearly proscribed under international law – yet these issues have not been brought up at all in the accession process.

The OECD Convention also stipulates that members “avoid developments which might endanger their economies or those of other countries”, and “reduce or abolish obstacles to the exchange of goods and services”. But, as evidenced by a recent IMF report, Israeli policies toward Palestinians in both the West Bank and Gaza are characterised by crippling restrictions on their economies.

In its report, the IMF concluded that “a breakthrough in the peace process and removal of restrictions on a wider scale are essential for a durable and regionally balanced growth in the Palestinian territories”.

President Obama has recently declared his wish for a new “Middle East order” based on a growing recognition that Israeli-Palestinian peace is key to US interests in the region. But it is unclear whether Israel has heard the message.

Indeed, since his visit to the US last month and despite the requests made by the Obama administration, prime minister Binyamin Netanyahu has repeatedly declared that construction will continue in East Jerusalem – a policy that makes the chances of restarting negotiations very faint.

Netanyahu can feel justified in his claim, made years ago, that prosperity can be achieved in Israel even without a peace deal. According to Israeli analysts, Israel will reach an unprecedented per capita GDP of $30,000 this year, and Israeli government debt is expected to decline. As reported recently by Israeli media, part of this wealth is the illegal fruit of Israeli economic activities in the occupied territories.

Traditionally, political agreements and trade agreements are reached on separate if closely linked tracks. While politics may limp and falter, business must be allowed to proceed smoothly. The Israeli OECD accession process is a perfect example of how such separations can become counterproductive.

Making Israel’s accession to the OECD conditional on concrete improvements in human rights on the ground might send a clearer message to Israel that the international community is consistent and serious about Middle East peace.

More generally, if the US and the EU learn to use their trade relations with Israel as leverage, they may discover that the much-sought-after incentive for peace is to be found there, if nowhere else.

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