Israel eyes scrapping free trade deal with Turkiye

Israel eyes scrapping free trade deal with Turkiye
Pro-Palestinian activists and supporters wave flags and carry placards during a National March for Palestine in Istanbul on February 17, 2024. (AFP)
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Updated 18 May 2024
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Israel eyes scrapping free trade deal with Turkiye

Israel eyes scrapping free trade deal with Turkiye
  • War in Gaza has stirred public reaction significantly ahead of March 31 local elections

ANKARA: After Israeli Finance Minister Bezalel Smotrich announced on Thursday that Israel intends to scrap its free trade agreement with Turkiye and impose a 100 percent tariff on other imports from the country in retaliation for Ankara’s recent decision to halt exports to Israel, eyes are now turning to imminent implications for regional trade.

The plan, which aims to reduce Israel’s dependence on Turkiye, has not been finalized yet and will have to be submitted to the Cabinet for approval.

If approved, all reduced tariffs on goods imported from Turkiye under the current free trade agreement would be abolished, while a tariff of 100 percent of the value of the goods would be imposed on all imported products, in addition to the existing tariff.

Experts note that trade ties between the two countries had been mostly insulated from political disagreements in the past. Trade continued when diplomatic relations hit rock bottom, especially between 2010 and 2020, a politically tense period during which parties chose not to burn “trade bridges.”

But this time, Turkiye’s continuation of trade relations with Israel while at the same time being vocal in denouncing its war in Gaza stirred public reaction significantly ahead of the March 31 local elections, when large crowds and some Islamist breakaway parties criticized the government for not taking a hardline stance against Israel and for not matching rhetoric with action.

In late April, Turkiye, whose bilateral trade with Israel was worth about $7 billion a year, announced it would impose trade restrictions on 54 products exported to Israel until a permanent ceasefire in Gaza was declared.

The product range was diverse, from cement to dry food, iron, steel, and electrical devices.

However, companies have three months to fulfill existing orders via third countries.

In his statement, Smotrich described Turkiye’s move as a serious violation of international trade agreements to which Ankara is a signatory.

He added that Israel’s latest decision would last as long as President Recep Tayyip Erdogan remained in power.

Turkiye and Israel have had a free trade agreement since the mid-1990s, making Ankara a key commercial partner for Israeli importers. Relatively cheap imports were transited quite quickly, and Turkiye was Israel’s fifth-largest source of imported goods.

Israel mainly imported steel, iron, motor vehicles, electrical devices, machinery, plastics, and cement products, as well as textiles, olive oil, and fruits and vegetables from Turkiye, while Turkiye mostly bought chemicals, metals, and some other industrial products from the Middle Eastern country, with Turkiye’s trade with Israel tilted in Ankara’s favor.

“Since Erdogan announced that Turkiye would impose a trade ban on imports and exports from Israel, Israeli officials have been trying to determine how best to respond,” Gabriel Mitchell, a policy fellow at the Mitvim Institute, told Arab News.

“The first was Foreign Minister Israel Katz, who criticized Turkiye’s decision and later announced that Turkiye had lifted many of the restrictions. This put pressure — once again — on Erdogan to show the Turkish public that he is willing to ‘put his money where his mouth is’ with Israel and forced the Turkish government to deny these rumors,” he said, adding that it also compelled “Erdogan to be even more vocal in his criticism of Israeli policy.”

According to Mitchell, Smotrich — who is a minister but not a member of the Likud party — saw this as an opportunity to make his own headlines in proposing the move to cancel the free trade agreement.

As this move requires Cabinet approval, Mitchell said he would be very surprised if it were approved.

“It would be an escalatory step and undoubtedly have serious short-term economic consequences,” he said.

“It is important to bear in mind the domestic situation in Israel. There is increasing pressure on Netanyahu, and as a result, the more radical voices feel that by pushing populist policies, they are in a win-win situation: Either their policy is adopted, and they get credit for the idea, or it is rejected by others in the government, and they can criticize them for being soft,” Mitchell added.

“Erdogan is very unpopular in Israel — arguably the most unpopular regional leader — so some believe that while there are voices in Israel that would oppose the decision, there are many that would go along with it without really understanding the economic implications.”

Mitchell also noted a caveat, saying that the free trade agreement would be canceled until Erdogan steps down.

“I don’t understand what that means, given that such agreements are made bilaterally. Who is to assume that in 2028, Erdogan will no longer be president, and whoever succeeds him will be interested in signing a free trade agreement with Israel? It is a risky approach,” he said.

“My final point, and it is worth considering, is that Smotrich also wrote (in) a letter to Netanyahu that ‘representatives of Turkiye’s president, the anti-Semitic enemy of Israel, Erdogan’ were involved in the hostage negotiations — so it all gets mixed up and confused,” Mitchell added.

Continuing its strong rhetoric, Turkiye recently announced that it would join South Africa’s genocide case against Israel at the International Court of Justice.

From its side, Israel filed a complaint to the Organization for Economic Cooperation and Development against Turkiye over the latter’s decision to suspend trade with Israel.

Sinan Ulgen, director of the Istanbul-based think-tank EDAM and a visiting fellow at Carnegie Europe, says Israel’s latest decision should be seen as an economic and political response to the Turkish government’s earlier decision to impose a trade embargo on Israel.

“The economic impact can be significant, especially on some of Israel’s critical products imported from Turkiye, such as construction materials, including cement. However, this does not mean Israel couldn’t import these items from other countries.

“But for Israel, it would be a costly trade diversion, and it will increase the internal cost of these products and possibly have an impact on domestic inflation,” he told Arab News.

Israel imports about a third of its cement and almost 70 percent of its iron construction materials from Turkiye.

“Another consequence is that unlike Turkiye’s decision to impose a temporary trade embargo with conditions, Israel is now moving in the direction of essentially imposing a permanent and lasting measure, which is to cancel a free-trade agreement that has been in place since the mid-1990s,” Ulgen said.

After the Turkish boycott of all trade with Israel, prices, especially in the housing sector, are expected to increase gradually, pushing up the cost of living in Israel.

Ulgen noted, however, that Turkish products could still indirectly reach Israel through third countries, for example, by transiting from the EU because Turkiye and the EU have a customs union. However, alternative transportation trade routes that circumvent the restrictions can be longer, more complex, and costlier.


Palestinians say Israeli troops kill teen in West Bank

Updated 5 sec ago
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Palestinians say Israeli troops kill teen in West Bank

Palestinians say Israeli troops kill teen in West Bank
Naeem Abdullah Samha, 15, was killed “by occupation (Israeli army) bullets” in the city of Qalqilya
He was rushed to hospital but was pronounced dead of his wounds there

JERUSALEM: The Palestinian health ministry said Israeli forces shot dead a Palestinian teenager in the occupied West Bank on Thursday, amid escalating violence in the territory since the war in Gaza began on October 7.
The Israeli military did not immediately respond to an AFP request for comment.
Naeem Abdullah Samha, 15, was killed “by occupation (Israeli army) bullets” in the city of Qalqilya, the Palestinian health ministry in Ramallah said in a statement.
The Palestinian official news agency Wafa, citing local sources, reported that Samha was shot in the chest.
He was rushed to hospital but was pronounced dead of his wounds there, the agency said, which gave no reason for the shooting.
The West Bank, which Israel has occupied since 1967, has for more than a year experienced a rise in deadly incidents, but particularly since the Israel-Hamas war erupted on October 7.
Israel has carried out near-daily raids in the West Bank in what it says is a bid to thwart militant groups.
At least 547 Palestinians have been killed in the West Bank by Israeli troops or settlers since the Israel-Hamas war broke out, according to Palestinian officials.
Attacks by Palestinians have killed at least 14 Israelis in the West Bank over the same period, according to an AFP tally of Israeli official figures.
The West Bank is home to about 490,000 Israeli settlers who live in communities considered illegal under international law.

Netanyahu criticism on US weapons deliveries ‘vexing’: White House

Israeli Prime Minister Benjamin Netanyahu attends a cabinet meeting at the Bible Lands Museum in Jerusalem. (AFP)
Israeli Prime Minister Benjamin Netanyahu attends a cabinet meeting at the Bible Lands Museum in Jerusalem. (AFP)
Updated 13 min 14 sec ago
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Netanyahu criticism on US weapons deliveries ‘vexing’: White House

Israeli Prime Minister Benjamin Netanyahu attends a cabinet meeting at the Bible Lands Museum in Jerusalem. (AFP)
  • Netanyahu said that “it’s inconceivable that in the past few months, the administration has been withholding weapons and ammunitions to Israel”

WASHINGTON: Israeli Prime Minister Benjamin Netanyahu’s criticism this week over US weapons deliveries to his country is “vexing,” the White House said on Thursday.
“Those comments were deeply disappointing and certainly vexing to us, given the amount of support that we have and will continue to provide,” National Security Council spokesman John Kirby told journalists.
In a video statement, Netanyahu said that while he appreciated America’s support during the Gaza war, “it’s inconceivable that in the past few months, the administration has been withholding weapons and ammunitions to Israel.”
The United States however has said that there is only one shipment of 2,000 pound bombs that is under review because of concerns about their use in densely populated areas.
Kirby separately said that US National Security Adviser Jake Sullivan is due to meet his Israeli counterpart Tzachi Hanegbi and Strategic Affairs Minister Ron Dermer on Thursday.
Washington is Israel’s main military backer, but the White House has voiced frustration over the rising civilian death toll in Gaza, where Israel has conducted more than eight months of operations against Hamas.
The war was triggered by an unprecedented October 7 attack by Palestinian militants on southern Israel, which resulted in the deaths of 1,194 people, mostly civilians, according to an AFP tally based on Israeli official figures.
Israel’s retaliatory offensive in Gaza has killed at least 37,431 people, also mostly civilians, according to the health ministry in the Hamas-ruled territory.


Cyprus rejects Hezbollah claim on Israel and airports

Cyprus rejects Hezbollah claim on Israel and airports
Updated 15 min 54 sec ago
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Cyprus rejects Hezbollah claim on Israel and airports

Cyprus rejects Hezbollah claim on Israel and airports
  • “Cyprus is not involved, nor will it become involved, in any military conflicts,” government spokesperson Konstantinos Letymbiotis said
  • He called Nasrallah’s comments “not pleasant,” adding that “all necessary diplomatic steps will be taken“

NICOSIA: Cyprus on Thursday rejected as “groundless” allegations by the Iran-backed Hezbollah movement that airports on the east Mediterranean island might be used by Israeli warplanes if the Israel-Hamas war spreads.
Hezbollah chief Hassan Nasrallah in a televised address on Wednesday threatened Cyprus in the event that total war erupts in the region.
“Opening Cypriot airports and bases to the Israeli enemy to target Lebanon would mean that the Cypriot government is part of the war, and the resistance will deal with it as part of the war,” he said, referring to Hezbollah.
The government in Nicosia swiftly denied any Cyprus military involvement in Israel’s war against Hezbollah ally Hamas.
“Cyprus is not involved, nor will it become involved, in any military conflicts,” government spokesperson Konstantinos Letymbiotis told state radio on Thursday.
He called Nasrallah’s comments “not pleasant,” adding that “all necessary diplomatic steps will be taken.”
The island is home to two British military bases, but these are on sovereign UK territory and not controlled by the Cyprus government.
The British Akrotiri air base on the south coast has been used by the Royal Air Force which has joined the US Air Force in targeting Houthi rebels in Yemen who have attacked shipping in the Red Sea and Gulf of Aden.
The Houthis say they are doing so in solidarity with the Palestinian Hamas movement.
Over the past decade, Cyprus has built stronger ties with Israel, particularly in the search for new energy sources and in tourism.
Cyprus is the European Union’s easternmost member, and is less than 200 kilometers (125 miles) from Lebanon.
President Nikos Christodoulides has denied there has been any Cypriot involvement in the Israel-Hamas war except as “part of the solution” as a staging post for humanitarian aid to the Gaza Strip via a maritime corridor.
“Cyprus is not part of the problem. As it is widely acknowledged, its diplomatic footprint is part of the solution,” government spokesman Konstantinos Letymbiotis added in a separate written statement on Thursday.
“Any public allegations that refer to an involvement of Cyprus through its infrastructure or its territory in the event of a confrontation that relates to Lebanon are totally groundless,” the statement said.
“Cyprus has never facilitated and will not facilitate any aggressive action or attack against any country.”
On the street, reactions to the Hezbollah leader’s remarks were mixed.
“It’s a very tense moment all over the world,” Brazilian tourist Glaussia, 54, told AFP, not giving her last name.
She added that it was important that “everybody make an effort for peace.”
Nicosia resident Costas stressed that his country’s only involvement in the current conflict was to provide “humanitarian help to the people over there.”
He said the government would not become involved in the war in any military capacity.
“Cyprus is a credible enabler of stability, and an acknowledged regional hub for humanitarian operations, based on excellent relations with all the countries in the region,” government spokesman Letymbiotis said in his statement.


UN experts say firms sending arms to Israel could be complicit in abuses

UN experts say firms sending arms to Israel could be complicit in abuses
Updated 20 June 2024
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UN experts say firms sending arms to Israel could be complicit in abuses

UN experts say firms sending arms to Israel could be complicit in abuses
  • The group of 30 experts, including several UN Special Rapporteurs, said arms manufacturers supplying Israel should halt their transfers of war materiel
  • The UN experts said on Thursday the risk to arms firms had increased since the International Court of Justice ordered Israel last month to halt its military offensive in Rafah

GENEVA/LONDON: A group of United Nations experts on Thursday warned arms and ammunitions manufacturers against taking part in the transfer of weapons to Israel, saying it could make them complicit in human rights abuses and violations of international law.

The group of 30 experts, including several UN Special Rapporteurs, said arms manufacturers supplying Israel should halt their transfers of war materiel, “even if they are executed under existing export licenses.”

“These companies, by sending weapons, parts, components, and ammunition to Israeli forces, risk being complicit in serious violations of international human rights and international humanitarian laws,” the experts said in a statement.

There was no immediate comment from Israel which has repeatedly denied carrying out abuses during its Gaza operations, saying it is acting to defend itself and is fighting Hamas militants, not the Palestinian population.

The UN experts said on Thursday the risk to arms firms had increased since the International Court of Justice ordered Israel last month to halt its military offensive in Rafah in the southern tip of the Gaza Strip, in a landmark emergency ruling in South Africa’s case accusing Israel of genocide.

“In this context, continuing arms transfers to Israel may be seen as knowingly providing assistance for operations that contravene international human rights and international humanitarian laws and may result in profit from such assistance,” the experts said.

Israel has rejected the genocide accusations as false and grossly distorted.

Also on Thursday, British weapons manufacturers were warned that their selling of military equipment to Israel could lead to criminal charges for failing to prevent war crimes amid the Israeli offensive in Gaza.

Four anti-arms trade campaign groups, including the Campaign Against Arms Trade (CAAT), highlighted “potential criminal liability for atrocity crimes currently taking place in Gaza” in a letter to 20 UK firms who contribute parts or software used in F-35 fighter jets being used by the Israeli air force to bomb the Hamas-held Palestinian enclave.

The letter cited a section in the 2001 International Criminal Court Act, where it is states it is an offense under English and Welsh law “to engage in ‘conduct ancillary’ to a war crime or a crime against humanity” in foreign jurisdictions.

The firms targeted by the activists include the UK arm of Lockheed Martin, BAE Systems and Northrop Grumman, the Guardian reported.

The UN human rights office said on Wednesday that Israeli forces may have repeatedly violated the laws of war and failed to distinguish between civilians and fighters in the Gaza conflict. Israel dismissed the findings as flawed.

Israel’s air and ground offensive has killed more than 37,400 people in the Hamas-ruled Palestinian territory, according to health authorities there.

Israel launched its assault after Hamas fighters stormed across the border into southern Israel on Oct. 7, killing around 1,200 people and taking more than 250 people hostage, according to Israeli tallies.

* With Reuters


Hezbollah fires rockets at Israel after fighter killed

Hezbollah fires rockets at Israel after fighter killed
Updated 20 June 2024
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Hezbollah fires rockets at Israel after fighter killed

Hezbollah fires rockets at Israel after fighter killed
  • Hezbollah announced that one of its fighters had been killed
  • A source close to the group told AFP he was killed in the Deir Kifa strike

BEIRUT: Hezbollah said it fired “dozens” of rockets into northern Israel Thursday in retaliation for a deadly strike in south Lebanon, a day after a fiery speech from the group’s leader.
Israel and Hezbollah, a powerful Lebanese movement allied with Hamas, have traded near-daily cross-border fire since the Palestinian militant group’s October 7 attack on Israel which triggered war in the Gaza Strip.
Fears of a regional war rose after Hezbollah chief Hassan Nasrallah warned Wednesday “no place” in Israel would be spared in case of all-out war against his group, and threatened the nearby island nation of Cyprus if it opened its airports to Israel.
Hezbollah on Thursday said that “in response to the assassination that the Israeli enemy carried out in the village of Deir Kifa,” fighters targeted an Israeli barracks “with dozens of Katyusha rockets.”
Lebanon’s official National News Agency (NNA) had reported one dead after an “enemy drone” struck a vehicle in south Lebanon’s Deir Kifa area.
Hezbollah announced that one of its fighters had been killed. A source close to the group, requesting anonymity, told AFP he was killed in the Deir Kifa strike.
The Israeli military said an air strike “eliminated” a Hezbollah operative in the Deir Kifa area, saying he was “responsible for planning and carrying out terror attacks against Israel and commanding Hezbollah ground forces” in south Lebanon’s Jouaiyya area.
Elsewhere, Israeli fighter jets struck “a Hezbollah surface-to-air missile launcher that posed a threat to aircraft operating over Lebanon,” the army statement added.
The exchanges between the foes, which last went to war in 2006, have escalated in recent weeks, and the Israeli military said Tuesday that “operational plans for an offensive in Lebanon were approved and validated.”
After the Hezbollah leader’s threats against Cyprus, Lebanon’s foreign ministry said Thursday that “relations between Lebanon and Cyprus are based on a rich history of diplomatic cooperation.”
Contacts and consultations continue between the two countries “at the highest levels,” a foreign ministry statement said, without making specific reference to Nasrallah’s remarks.
In a conversation with his Cyprus counterpart, Foreign Minister Abdallah Bou Habib expressed “Lebanon’s constant reliance on the positive role that Cyprus plays in supporting regional stability,” the NNA reported.
Cypriot President Nikos Christodoulides had denied his country’s involvement in the war and said it was “part of the solution.”
The cross-border violence has killed at least 479 people in Lebanon, most of them fighters but also including 93 civilians, according to an AFP tally.
Israeli authorities say at least 15 soldiers and 11 civilians have been killed in the country’s north.