Monday, December 26, 2005

Israel, Arab World Engage in Hidden Trade

I really hope this isn't true, but if it is I really should not be as suprised as I am. Shekel over all.

From ABC:

Staff members at a Riyadh hospital got a surprise when they looked at the fine print on the paper cups they were using. Workers in a storeroom at a Dubai hospital were similarly shocked when they took a close look at the tags on a large shipment of uniforms, towels and sheets.

The labels said "Made in Israel," according to recent newspaper reports from Saudi Arabia and the United Arab Emirates, both of which have laws that ban imports from the Jewish state.

Experts say the camouflaged trade, with just a small portion receiving publicity, has been going on for years between Israel and its officially hostile Arab neighbors.

The hidden trade is worth about $400 million a year about two and a half times what Israel sold to its official Arab trading partners, Egypt and Jordan, in 2004 said Gil Feiler, the director of Info-Prod Research, a Tel Aviv consultancy specializing in Arab markets, and an economic professor at Bar Ilan University.

Others say such estimates are significantly inflated.

"All the figures are very sexy for the press, but the reality is much less than what is written," said Dan Catarivas, foreign trade director at the Israeli Manufacturers' Association.

The true amount of Arab imports from Israel is impossible to establish because neither side makes it public, with Israeli-made goods moving to Arab customers through third countries Cyprus or the Netherlands, for example, which list the shipments as local exports.

An Arab lawyer who specializes in trade, Omar Obeidat of Al-Tamimi & Co. in Dubai, said the Arab League boycott of Israel is well enforced, despite the hidden trade through third countries.

"The only person who can confirm is the Israeli party to this covert operation," Obeidat said, when asked to estimate the worth of goods flowing to Arab nations.

Feiler, who has written a business guide to Israel in Arabic, refused to give more than rough outlines of the trade, which he supports.

Israeli exports to Arab countries, he said, are mostly from three categories: agricultural equipment, such as for irrigation a field in which Israel leads the world; animal vaccines and "technological knowledge and components." He refused to elaborate on the latter.