Business Treatments between Israel and Some Arabic Countries - Research Paper Example

Business Treatments between Israel and Some Arabic Countries Introduction An international treaty can generally be described as an official agreement between two or more nations with the intention of bringing them into certain sort of legal binding in terms of carrying out business. These sorts of treaties can be regarding multiple business types for instance, oil agreements, import and export of goods and services, or shared investments between two or more international business men. These treaties mostly comprise basic written protocols based on which the trade practices get carried out. These written protocols are mostly set by law abiding bodies or the government itself. For instance, in the cases of oil exchange between two or more nations, the international trade agreements are mostly set by governments. This sort of trade agreements are considered to be of prime benefits for incumbent nations. These international business treaties also contribute to the international openness factor along with playing a significant role of economic growth variables. For instance, oil trade agreements between Israel and Kuwait or Saudi Arabia or Qatar among other nations can ensure greater benefits in the long run. At the same time, apart from merely oil treaties, multiple import and export businesses also occur between these nations which include exchange of food products, beverages, electronics and heavy machinery among others. The prime focus of this discussion will be regarding the evaluation of various legal aspects related with international trade between two nations. Moreover, this discussion will be taking into consideration three crucial factors namely the international oil agreements, import and export of goods and shared investments and the specific legal aspects associated with these. 2. Discussion 2.1. Legal Aspects and Obligations between Israel and Some Arabic Nations in terms of Oil Agreements. For this part of the discussion, the instance of Egypt as one of the Arab nations has been highlighted. Multiple reports describe that Egypt has been counted as one of the business partners successfully carrying out business with Israel. The trade relationship between these two nations started with the signing of the peace treaty. This peace treaty can be considered as the first legal agreement meant for bringing these two nations into peaceful business conduct (American-Israeli Cooperative Enterprise, 2014). Apart from Egypt, other Arab nations such as Algeria, Iraq, Somalia, and Syria cannot be accounted in terms of carrying out any sort of trade relationship with Israel since there seems to be multiple instabilities regarding the relationship between Israel and the Arab nations. The evidence of such instability can be comprehended from the fact that a majority of the Arab nations stated a ban to the films of Steven Spielberg after he made a donation of US$1million to Israel with the intention of supporting the nation during the Lebanon Conflicts (Hill, 2010). With respect to the discussion regarding oil trade in between Israel and Egypt, it can be ascertained that apart from other Arabic nations, the trade agreement has been in place amid these two nations. The oil trade agreement between these two nations follows a strict norm stating that Israel should carry out oil purchases from Egypt on regular periods. This trade practice has also attained a declining phase due to Palestinian violence which occurred during the period of 2000. However, in the current scenario, the former peace relationship between Israel and Egypt also seems to be in its final stage. This can be stated based on a matter of fact that Egypt has terminated its natural gas treaty with Israel. This has led to the deterioration of the situation to a further extent. One major factor which seemed to have contributed to this matter is the sabotaging of the natural gas pipeline between Egypt and Jordon (Al Arabiya News, 2012). Apart from Egypt, Israel has also established successful peace relationships with Jordon (Haberman, n.d.). Even after all these, the trade relationships between Israel and every partnered Arab nation have never seen any sign of prosperity. For instance, in a recent news projection, it was seen that the amount of import Jordan made from Israel came down by a significant declining figure (The Middle East Monitor, 2014). These entire above mentioned factors signify the legal aspects currently active in terms of oil exchange agreements between Israel and other Arab nations specifically Jordon and Egypt. However, not much pertinent data can be obtained from secondary sources due to the fact that the relations between Israel and a majority of the Arab nations are still in an unstable state (EBSCO Publishing, 2014). However, as a matter of fact more amounts of data might be available in the coming days. The factor contributing to this future chance is regarding the minimization of instability of the Middle East which might provide a golden opportunity to Israel in terms of developing its relationship with the Arab nations (Jewish Telegraphic Agency, 2014). 2.2. Legal Aspects and Obligations between Israel and Other Arab Nations In Terms Of Imports and Exports of Goods. As already discussed above, signing up of the peace treaty between Egypt and Israel has come along a long way in terms of improvising the relationship between these two nations. Till 2011, the marketing scenario between these two nations was such that about 117 exporters who exported a majority portion of their production to Egypt were setup in Israel. During that period, the exchange of goods and services between Israel and Egypt gradually went up by 60%, which is an aggregate value of about US$236 million (Azulai, 2012). One interesting matter of fact regarding the international trade between these two nations is that a majority of the trade processes were carried out through every day crossing of the borders between these two nations. The reason for such kind of trading style was that, the Israeli traders were not provided visa in Egypt. Despite this lack, still this international trading appears marginal to majority of the Israeli traders (Azulai, 2012). In this regard, commercial trade relationship between these two nations has also been generating a number of job opportunities for the traders within these two nations. Moreover, as a legal aspect, the Israeli government passes on the responsibility of safeguarding the livelihood and interests of these traders to the Egyptian government. In addition, the Israeli industrial chemicals and fertilizer products are in high demand within the Egyptian markets. However on the contrary part, the exports from Egypt to Israel seem to have dropped drastically by 50% i.e. an amount of about US$180 million. The main reason identified for the trade decline is the termination of the natural gas to Israel by Egypt. Regardless of these facts, Egypt seems to continue increasing its level of goods import from Israel (Azulai, 2012). The legal aspects in terms of imports and exports of goods and services can further be understood through a clear picturization of the current relationship state between these two players. Taking into consideration the relevant news facts, it can be stated that the relationship between these two nations currently seems to be in a stable mode. Besides, in accordance with the statements made by the Chairman of Export Institute Mr Ramzi Gabbay, Egypt will continue importing high significant percentages of textiles raw materials from Israel (Azulai, 2012). With reference to the discussion made above, Egypt has been visioning this trade relationship as a source of employment generation. Moreover, Mr Ramzi Gabbay also stated that until and unless there seems to occur any sort of political interference which might hamper this trade pact, both the nations will continue maintaining healthy relationship between them. Furthermore, Egypt also implements certain legal obligations regarding carrying out of the trade practices. For instance, the traders from Israel are not permitted to enter the manufacturing sites of Egypt. Moreover, the traders are required to undergo periodic meetings regarding their trade practices (Azulai, 2012). Apart from the above mentioned facts, another legal obligation which was established to ensure the sustenance of the Israel-Egypt trade relationship is that Egypt will be permitted to continue exporting goods to the United States along with no import charges applied as long as Israel shares a certain percentage of that entire export with Egypt. However, this legal aspect received multiple negative criticisms from the Egyptian population who were against this trade agreement. Multiple comments also got raised regarding the provision of these sorts of economic leverage to Israel by Egypt (Service, 2004). Adding further facts in the context of maintaining warm relations with Israelis, it can be said that any statements or activities which project the collective working of Egyptians with Israelis are considered as dirty or abusive in Egypt. However, this factor can act as a negative deterrent for this trade relationship since it might raise multiple emotional complicacies. This might further add up to breakout of multiple riots (Service, 2004). Jordan in the similar fashion as that of Egypt also went along in terms of signing up trade agreements with Israel with the prime intention of enjoying the side benefits from such a business pact. Correspondingly, these benefits entail multiple employment opportunities, financial benefits and political support among others. Nonetheless, in accordance with the political bodies of Jordan, the signing up of the trade pact does not lower their concerns regarding the Israeli- Palestinian issues. This might appear as a major setback in terms of fortifying the relationship between Jordan and Israel. Adhering to this pact, both the nations have put down significant efforts with regard to decimating political issues through economic solutions. Apart from just carrying out trade pacts within themselves, these two nations has also signed off multiple but separate trade agreements with European Union and the United States for carrying out cross boundary business (Reuters, 2004). As a conclusive part of this agreement, a number of Israeli industries have established production centers in Jordan due to the benefits received from the Qualified Industrial Zones (QIZ) (Reuters, 2004). Further facts conclude about the nature of the trade agreement which got signed up between Israel and Jordan. These facts mostly highlight multiple products and areas which were considered for carrying out this business effectively (State of Israel, 1995). The agreement also took into consideration the customers’ expectations, product information, exchanging techniques and uplifting of trade barriers among others. Besides, previously the Jordanian parliament almost boycotted the Israelis in every possible manner. Thus, for carrying out this business treaty, the Jordanian Parliament passed out a legislation norm with the intention of ending up the Israel economic boycott (State of Israel, 1995). 2.3. Types of Shared Investments between the Businessmen of Israel and Some Arabic Countries Along With the Various Associated Legal Obligations With regard to the trade agreements signed between Israel and some Arab nations, multiple businesses attained the chances of flourishing. For instance, in terms of signing up of the trade agreement between Israel and Egypt, businesses such as textile industries, oil industries and power industries developed and profited by significant amounts. However, due to the fact that the conflictive nature of the Arab nations and Israel has been in existence since long so no evidences can be drawn regarding the shared investment between two businessman belonging from Israel and Middle Eastern nations. Even though multiple other shared trade businesses have got established between Israel and Middle Eastern nations such as Egypt and Jordan as a result of getting along with the trade agreements, however all these business are subsequently controlled by the governmental bodies. For instance, the natural gas exchange between the Egypt and Israel can be mentioned. In this regard, the oil and gas manufacturing industry was mostly controlled by the government. In addition to this, it was due to the political pressure from the government which had led to the closure of the gas treaty between the two nations. This decision from the Egyptian government has also resulted in raising the risk of repulsion from the Israeli government (Kirkpatrick, 2011). Adding to all the above points, the attack of the Israeli Embassy in Cairo and vice versa also projects a clear picture about the unstable relationships between Egypt and Israel which further adds up to the fact that there might not exist any sort of shared investment business between the businessmen of these two nations (Kirkpatrick, 2011). Moreover, multiple other evidences exist which prove that there seems to be no chance of establishing any sort of shared investment between two nations (American-Israeli Cooperative Enterprise, 2014). One such evidence being the restrictions put up by the Egyptian government regarding the provision of VISA to the Israeli traders who travel through the borders between these two nations with the intention of trade practices in Egypt. Besides, these traders are also restricted in terms of going into the manufacturing and production setups within Egypt. Thirdly, the boycott from other Arab nations in terms of investing in Israel further lowers the chances of establishing shared investment businesses within Israel. One crucial factor which decorates the situation to the maximum possible extent is the abuse in the context of working with Israeli traders in Egypt. The nation generally abuses and at times even boycotts individuals or business groups which appear to have some sort of trade relationship with the Israeli traders (Flame, n.d.). 3.0. Conclusion From the foregoing discussion of the facts, one conclusive point came out into the picturization that in order to attain a better share within the global market, Israel should start indulging into trade practices with a number of Arab nations apart from just continuing its trade relationships with Egypt and Jordan. The Israeli government should bring about control within their internal political issues which till date has significantly cost them in terms of establishing healthy relationships with the Middle East nations. However, the issues concerning caste, community, society and nationality seem to be common in every Middle Eastern nation. Yet, as a sign of benefit, Israel has successfully established multiple business agreement with other nations such as Turkey and India among others. Based on Gross Domestic Product (GDP) reports of Israel, it can be concluded that this nation invests a significant percentage of its national earning in maintaining its military force. As a result of such scenario, Israel fails to attain much development within its industrial standards and expansion. If seen from a recommendation perspective, Israel should make efforts with regard to developing its relationship with oil producing giants such as Saudi Arabia and Kuwait among others. Since from the past records, it has been quite evident that the GDP growth rates of oil based nations are much more in comparison with other nations. Also, a picturization of the reasons for destruct between the Arab nations and Israel has also been drawn. One such reason being the political support to Palestinians offered by the Israeli government. Multiple news articles as described in the above sections also state in similar context. Thus, for the final conclusive point, Israel should lower its trade barriers along with its political issues and invite nations to establish their business within it. Through this way, the nation will succeed in terms of attaining huge investments and annual turnovers leading to its overall development in the international domain. 4.0. References Azulai, Y. (2012). Israel Export Institute chairman Ramzi Gabbay: The current situation is simply too good for both sides. Retrieved from http://www.globes.co.il/en/article-1000760280 Al Arabiya News. (2012). Israel says Egypt’s termination of gas deal violates Camp David peace accord. Retrieved from http://www.alarabiya.net/articles/2012/04/23/209622.html American-Israeli Cooperative Enterprise. (2014). Israel-Egypt relations: a review of bilateral ties. Retrieved from http://www.jewishvirtuallibrary.org/jsource/Peace/egyptisrael.html EBSCO Publishing. (2014). An overview of relations between Israel and Palestine. Retrieved from http://connection.ebscohost.com/politics/israel-palestinians/overview-relations-between-israel-and-palestine Flame. (n.d.). The Arab boycott of Israel does it give any clues to Arab intention? Retrieved from http://www.factsandlogic.org/ad_45.html Hill, A. (2010). Steven Spielberg was target of Arab league boycott, wikileaks cable shows. Retrieved from http://www.theguardian.com/film/2010/dec/17/wikileaks-steven-spielberg-arab-league Haberman, C. (n.d.). The Jordan-Israel Accord: The Overview; Israel and Jordan Sign a Peace Accord. Retrieved from https://www.nytimes.com/learning/general/onthisday/big/1026.html Jewish Telegraphic Agency. (2014). Dempsey: Instability in region creates opportunity for Israeli-Arab alliances. Retrieved from http://www.jta.org/2014/03/31/news-opinion/united-states/dempsey-instability-in-region-creates-opportunity-for-israeli-arab-alliances Kirkpatrick, D. D. (2011). Protest of thousands in Cairo turns violent. Retrieved from http://www.nytimes.com/2011/09/10/world/middleeast/10egypt.html?_r=0 Reuters, S. S. (2004). Israel, Jordan sign free trade agreement. Retrieved from http://www.haaretz.com/news/israel-jordan-sign-free-trade-agreement-1.122555 Service, H. (2004). Egypt and Israel sign trade agreement. Retrieved from http://www.haaretz.com/news/egypt-and-israel-sign-trade-agreement-1.143818 State of Israel. (1995). Ministry of Trade communique on Israel-Jordan Trade Agreement. Retrieved from http://mfa.gov.il/MFA/ForeignPolicy/MFADocuments/Yearbook10/Pages/Ministry%20of%20Trade%20communique%20on%20Israel-Jordan%20Trad.aspx The Middle East Monitor. (2014). Jordanian imports of Israeli goods decreased. Retrieved from https://www.middleeastmonitor.com/news/middle-east/9358-jordanian-imports-of-israeli-goods-decreased Read More