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Palestinian Sweets Flowing Into Israel in Danger of Souring

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June 19 (Bloomberg) -- In the world of Israeli-Palestinian trade, there’s no parking politics and violence at the door.

With three Israeli teens kidnapped in the West Bank and Israel shunning the new Palestinian government, Palestinian exports to Israel are in danger of becoming the next casualty. As Israel vowed to “cripple” the Hamas group it blames for the abductions, West Bank Palestinians allowed rare entry to Israel for a trade fair this week fretted that inflamed tensions may take a toll on hard-won ties.

“While there’s little progress on peace prospects, business-to-business cooperation has been growing,” said Osama Abu Ali, head of export development at the Palestine Trade Center in Ramallah, which represents more than 300 businesses. “We are watching the deteriorating security situation with concern.”

Palestinian exports to Israel rose to almost $700 million last year from $455 million in 2007, according to United Nations trade data. They’re critical to the aid-reliant Palestinian economy, accounting for about 80 percent of Palestinian sales abroad, according to a Bank of Israel report released June 17.

The Palestinian economy is sapped in part by Israeli restrictions on the movement of Palestinian people and goods, and civil service salaries equaling two-thirds of the $3.6 billion budget. Unemployment in the West Bank and Gaza Strip is 21 percent, and one in four Palestinians lives on less than $2 a day.

Praised Abduction

Even before the June 12 kidnapping, ties between the sides had been strained over the collapse of peace talks and Palestinian President Mahmoud Abbas’s formation of a joint government with Gaza’s Hamas rulers. The Islamist movement, labeled a terrorist group by the U.S. and the European Union, has praised the abduction without claiming responsibility.

Israel has raided hundreds of locations in the West Bank since the abductions, arresting about 280 Palestinians, most of them from Hamas, the military said. Israeli leaders have warned of an extensive operation against Hamas.

The atmosphere was prickly at the trade fair in Nazareth, organized by the Peres Center for Peace and Pal-Trade.

Palestinians walked out on one panel to protest the lack of Arabic translation, returning only after translation was provided. Organizers canceled a dinner, saying it would look too festive given the kidnapping, and the mayor of a neighboring Jewish town sought to call off the entire conference. Businesspeople from Hebron couldn’t attend because the Israeli military sealed the city looking for the kidnappers.

‘Total Nightmare’

“This situation isn’t helpful,” said Younis Sa’adi, a sales manager at Ramallah-based Sinokrot Global Group. Many of the marketing materials he brought were confiscated by Israeli border police, he said.

Some Palestinians deplore the concept of tightening business ties, especially at a time when activists are campaigning to penalize Israel with boycotts and other economic sanctions.

“It is quite strange that people talk about cooperation when the Israeli army is attacking our homes and restricting our movement,” said Mustafa Barghouti, a Palestinian politician who supports sanctions. “The Israeli occupation is actually costing the Palestinians dearly. We can’t talk about cooperation unless we are liberated.”

Exports Restricted

While Israel heavily restricts exports from the West Bank and Gaza, it has torn down hundreds of military checkpoints it erected in the West Bank after the Palestinian uprising against Israel broke out in late 2000. That’s cut the amount of time it takes to bring goods to market and made it easier for Palestinian businesspeople to travel throughout the territory.

“During the uprising, moving goods around was a total nightmare,” said Kareem Shbeeb, Marketing & Sales Manager at Near East Industries & Trade Co. Ltd., which sells olive oil and soap. “Things have been getting better.”

The Palestinian businessmen in Nazareth, equipped with business cards and flyers, came to the fair trying to parlay the greater ease of movement into new export prospects.

Hebrew Labels

There is “enormous financial potential” in increasing partnerships with Palestinian businesses,’’ said Ido Sharir, chief executive of the Peres Center.

Sinokrot promoted its candies and pickles, and Nablus-based Al-Molook pasted labels in Hebrew as well as Arabic on its tahini-based products. Maryam and Yousef Hathnawi, whose Jenin-based Hathnawi Co. markets honey and natural oils, said they hoped the event would help them boost sales within cities with Arab populations in Israel such as Haifa and Nazareth.

“Just a few years ago, we were spending hours moving goods around in multiple trucks and even on donkeys sometimes just to get through the various checkpoints,” said Shbeeb, the Nablus-based businessman. “Things are far from ideal now but I sure hope we won’t be going back to those times.”

To contact the reporter on this story: David Wainer in Tel Aviv at dwainer3@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net Amy Teibel, Jack Fairweather

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