Thirteen American state attorneys general have warned Britain and the Netherlands that their sanctions policies concerning Israeli settlements could trigger economic countermeasures on American soil. In a letter sent to the British and Dutch ambassadors in Washington and made public on Monday, the attorneys general, led by Iowa’s Brenna Bird, demand that both governments “rescind or halt implementation of the recently enacted trade sanctions against Israel or any component of Israel”. The warning carries real weight: many of the signatory states have laws barring their agencies from doing business with companies that boycott Israel, which means British companies could face exclusion from state contracts or divestment by public investment and pension funds.
To be clear about the present position: these are threatened consequences, not confirmed losses. The sources reviewed do not identify any British company already excluded from a state contract or any completed divestment arising from the warning. The attorneys general state that they “reserve our right to pursue such remedies if you persist in your anti-Israel campaign”. But a formal warning of this kind, from the chief legal officers of thirteen American states, is not a gesture to be waved away. It puts the Labour Government on notice that a policy announced from the Commons despatch box now carries a credible threat of economic consequences for British businesses operating across the Atlantic.
The signatories are the attorneys general of Iowa, Alabama, Louisiana, Arkansas, Mississippi, Missouri, Florida, Montana, Georgia, Ohio, Oklahoma, South Carolina and Kansas, as listed by the Washington Free Beacon, which published the letter, and by JNS. Bird underlined the commercial stakes in a statement issued through her office: “By limiting trade markets and imposing sanctions, Iowa’s economy will be hurt by countries choosing to align their policies with terrorist organizations instead of our closest ally in the Middle East.”
The questions Miliband must answer
The central question raised by the letter is not rhetorical. Has the Labour Government properly assessed the potential commercial and diplomatic consequences of its sanctions policy before imposing it?
The letter itself spells out the mechanism. Many American states have enacted anti-boycott legislation, laws that in several cases date back years. Under those statutes, companies deemed to participate in a boycott of Israel can be disqualified from public contracts or excluded from public investment portfolios. The statutes differ from state to state, and their existence does not mean every British company is automatically disqualified from anything: each state enforces its own law against companies on its own terms, and state-level enforcement, public investment decisions and federal trade action are three distinct mechanisms with distinct triggers. But the exposure is real, and it was foreseeable. Any British Government undertaking a sanctions policy that touches trade with Israel had, on the face of it, every reason to model it before acting. The Government has not publicly demonstrated how it assessed that exposure before announcing the measures.
The attorneys general also identified a federal route. They argue that the harm threatened to American commerce “may warrant remedies under U.S. trade law”, citing the provision at 19 U.S. Code § 2411, which empowers the United States Trade Representative to act against foreign measures that unjustifiably burden American commerce. It should be stated plainly what that provision is and is not. It is a federal trade-law mechanism available to the US authorities; it is not an automatic power that state attorneys general can invoke to impose national trade sanctions. But the letter signals that the signatories are prepared to press for federal action, and that possibility alone is material to British exporters.
What representations has the Foreign Office made to the American states or to the United States Trade Representative? What steps does the Government intend to take to protect British companies from contract exclusions or divestment decisions taken under state anti-boycott laws? The Foreign Secretary has published no answers to either question. Businesses that trade with America, one of the United Kingdom’s most important investment partners, are entitled to know whether ministers anticipated this resistance and what they plan to do about it.
The contrast between the Government’s stated aims and the risks now being catalogued by American officials is sharp. When Ed Miliband announced the policy in the Commons on 8 September, he insisted the measures would “target illegal settlements and settlement expansion, not Israel”, according to the Foreign Secretary’s oral statement. The Government said the sanctions were aimed at settlement expansion, violence by extremists and protecting the viability of a two-state solution, as the House of Commons Library briefing on UK-Israel relations records. Yet the American attorneys general read the same policy as aligning Britain with “the policy objectives of terrorist organizations like Hamas and Hezbollah”, language that will travel far beyond their letterheads. A Foreign Secretary who sought to draw a careful legal line has found that line contested in the most consequential marketplace in the world.
What the sanctions actually cover
Accuracy about the policy’s status matters, because the Government has been careful with its own language and its critics should be careful with theirs. The package announced on 8 September consists of a new sanctions regime and an import ban on goods from the settlements, announced alongside eleven other countries, as The National reported. The measures are directed at settlement activity rather than at Israel as a whole, and the Government presented them as a response to settlement expansion and extremist violence. Some of the measures were newly announced in September; their full implementation, like the proposed import restrictions, is a matter of staged process rather than a single stroke. The American letter refers to “recently enacted trade sanctions”, and the dispute concerns both what is already in force and what is to come. Where each element stands matters commercially, and the Government should say so explicitly rather than leave exporters guessing.
That precision, however, does not weaken the scrutiny. It sharpens it. If the measures targeting settlements are meant to be surgical, the Government has not explained why a policy of that refinement required no published assessment of the reaction it would provoke from American states whose anti-boycott statutes reach companies far removed from any West Bank hilltop. The Wall Street Journal has already noted that the sanctions regime has struck entities as far afield as the Cayman Islands, and Aaron Schapiro of London’s Arele’s Kosher Wines told the Jerusalem Post that if the import ban takes effect, “we will lose more than half of our inventory”, as the Jerusalem Post reported. Narrowly drawn policies with broad footprints are precisely the kind that require an impact assessment.
The diplomatic bill
Israel’s response to the September announcement was swift, and each measure was announced by Israel as a reprisal: the consulate closure and the expulsion from the Kiryat Gat centre were presented by Israel as responses to Britain’s sanctions, and the downgrade of Dutch diplomats as a response to The Hague’s own measures. Foreign Minister Gideon Sa’ar ordered the closure of the British consulate in Jerusalem, as reported by Al Jazeera. On 8 October, after the Israeli closure order took effect, Britain’s 188-year-old consulate in East Jerusalem was downgraded and rebranded as the “UK Mission, Jerusalem”, with twenty diplomats, including the consul general, required to leave, as the BBC and Jewish Telegraphic Agency reported. Israel also expelled British representatives from the International Gaza Support Centre at Kiryat Gat, the US-led multinational hub coordinating aid and planning for Gaza’s future, and revoked the diplomatic status of Dutch envoys to the Palestinian Authority after The Hague announced its own measures, as Reuters reported.
The diplomatic consequences extend beyond the symbolism of a downgraded mission. The consulate in East Jerusalem was Britain’s principal independent diplomatic presence in the Palestinian file, and the Kiryat Gat centre is where the practical future of Gaza is being worked out among the powers with standing to be in the room. Britain’s reduced presence in Jerusalem and exclusion from that centre affect its ability to gather information, build relationships and influence outcomes on the very questions the Government says the sanctions are meant to advance. It has not lost all access or all influence, and none should pretend otherwise. But when a government measures a policy’s success, it must be able to point to measurable progress: access preserved, channels open, objectives advanced. What ministers can demonstrably point to since 8 September is a downgraded mission, an emptied seat at the coordination table and a formal warning from thirteen American states. If the Foreign Secretary believes the policy is working, he should say precisely what evidence demonstrates it: neither his oral statement of 8 September nor the Commons Library briefing sets out any measure of the policy’s progress, and no such assessment is identified in the official material cited here.
GREAT BRITISH PAC REACTION
Great British PAC is demanding answers from Ed Miliband and the Labour Government on four matters that go directly to Britain’s economic interests, diplomatic standing and the protection of British businesses.
First, publish the economic impact assessment. Any assessment the Government has made of the risks the sanctions policy poses to British exports, investment, procurement access and employment should be published in full. If no such assessment has been conducted, the public is entitled to know that ministers imposed a policy touching trade with the United States, one of the United Kingdom’s most important investment partners, without modelling the commercial exposure that thirteen American state attorneys general have now put in writing.
Second, explain what protection British companies will receive. The states’ anti-boycott laws were enacted long before this Government took office and were easy to anticipate. What steps have ministers taken with the signatory states and with the United States Trade Representative to prevent retaliatory contract exclusions or divestment from hitting British firms? What support will be available to a British company barred from a state contract on the strength of a foreign policy it did not make?
Third, clarify the sanctions and their intended outcomes. The Government should set out, in plain terms, which measures are already in force, which are proposed and pending, and what evidence would demonstrate that each is effective. A policy that cannot say what success looks like cannot be judged on results, and a Foreign Office that will not publish its implementation timetable leaves exporters and consumers to absorb the uncertainty.
Fourth, account for the diplomatic consequences. The downgraded mission in Jerusalem and the exclusion of British representatives from the International Gaza Support Centre are documented facts, not political claims. The Government must explain how it intends to preserve British diplomatic influence in the Middle East and maintain working relationships with partners, including the United States, on which British security and trade depend.
Claire Bullivant, Chief Executive Officer of Great British PAC, said:
“Ed Miliband is fast becoming a one-man wrecking ball for Britain’s international standing. Here we have a Labour Government so desperate to parade its moral superiority on the world stage that it appears to have forgotten the most basic duty of any British government: to put Britain and the British people first.
“Thirteen American states are now threatening economic retaliation, British businesses could find themselves shut out of lucrative contracts, and our diplomatic influence in the Middle East has already taken a battering. And for what, exactly? What has Miliband achieved for Britain, apart from alienating allies, jeopardising British commercial interests and making our country look increasingly irrelevant?
“This is the trouble with Labour. They mistake grandstanding for statesmanship, virtue signalling for diplomacy and ideological posturing for leadership. They are perfectly happy to gamble with other people’s livelihoods, provided they get to feel morally superior while doing it.
“Britain used to produce statesmen who commanded respect around the world. Now we have ministers who seem incapable of understanding that foreign policy has consequences beyond the applause of their own political supporters.
“Ed Miliband should stop treating British foreign policy like a student union debating society and start explaining why British businesses may be left paying the price for his political theatrics.
“A serious government defends its allies, protects its businesses and advances its national interests. This Labour Government appears determined to do the precise opposite. Britain deserves leadership, not lectures, and certainly not another expensive lesson in the consequences of Labour incompetence.”
Labour is entitled to pursue its foreign policy objectives. It is not entitled to pursue them without accounting for the economic risks, the diplomatic consequences and the practical benefits to Britain. Ed Miliband announced his sanctions with the confidence of a man who expected applause. He is now receiving letters from the chief legal officers of thirteen American states. The Government should publish the evidence that its policy is proportionate, effective and consistent with protecting British national interests, or it should think again.
