Recognizing a Palestinian state sends powerful message, unlikely to impact trade - opinion

In the theater of international relations, symbolism often takes center stage, casting shadows on the pragmatic ties that bind nations. The recent recognition of a Palestinian state by Spain, Norway, and Ireland exemplifies this dynamic – a significant political gesture, but one that remains largely symbolic with minimal immediate economic repercussions.

Israel’s economic interdependencies with these nations are robust. Spain, for instance, imports vital technological and chemical products from Israel, including cyclic hydrocarbons and refined petroleum, amounting to $1.2 billion in exports from Israel in 2022.

On the flip side, Spain exports cars, ceramics, and pharmaceuticals to Israel, contributing to a dynamic trade relationship worth $2.32 billion annually. Similarly, Ireland depends heavily on Israeli hi-tech components and pharmaceuticals, reflecting a bilateral trade that reached $3.86 billion last year.

However, political landscapes are as fluid as the markets they influence. A shift toward right-wing governments could alter the diplomatic equations, potentially recalibrating these nations’ stances towards Israel and Palestine.

This is not unprecedented. Take the Netherlands, where political shifts have previously impacted its foreign policy toward Israel. Such changes underscore the fragility and variability of political alliances. Moreover, the backdrop of this recognition is colored by preexisting social movements.

Norway’s sovereign wealth fund has divested from Israeli companies, reflecting a broader trend of boycotts by academics, artists, and trade unions – an indicator of deeper, longstanding societal sentiments rather than reactions to recent events alone.

Addressing the issues

The Israeli ambassador’s efforts to address these issues with the Norwegian government have often been met with bureaucratic deflection, highlighting the complex layers of international diplomacy and domestic pressures.

In essence, while the move to recognize a Palestinian state sends a powerful message, its immediate economic impact on Israel-Spain, Israel-Norway, and Israel-Ireland relations is likely minimal. The interdependence built on trade and investment provides a resilient buffer against abrupt economic shifts.

However, the evolving political climates and preexisting social movements present a nuanced and unpredictable landscape for future relations. The real challenge lies not in the symbolic gestures but in navigating the pragmatic ties that sustain these relationships amid an ever-changing geopolitical arena.

The writer is dean of the School of Economics at the College of Management.