The United States of Sanctions
The Use and Abuse of Economic Coercion
According to conventional wisdom, the deterioration of U.S.-Israeli relations is the result of personal animosity between Israeli Prime Minister Benjamin Netanyahu and U.S. President Barack Obama. But ill-will is more of a symptom than a cause. In fact, the increased friction reflects a new Israeli grand strategy. Rather than seeking to minimize differences with the United States over Iran and Palestine, as previous Israeli governments had done, Netanyahu has worked to diversify Israel’s international partnerships, cultivating new friends—from India to China to Saudi Arabia—so that Israel is less dependent on the United States.
When in danger, small countries with powerful allies usually draw closer to their friends. Seeking U.S. help to fend off Soviet territorial claims, Turkey sent troops to Korea in 1950 to support the anti-communist cause. Decades later, fearing a Russian invasion after the Rose Revolution in 2003, Georgia named one of the main avenues in its capital after George W. Bush and deployed troops to Iraq and Afghanistan.
One might have expected that, as Iran inched closer to the nuclear threshold, Israel would have followed Georgia’s example, perhaps naming a street in Tel Aviv after Obama or, at the very least, heeding the recommendation of many Israeli national security elites who urged cooperation with the United States on the Iran nuclear deal. Rather than accommodating Washington, however, Netanyahu thumbed his nose at Obama in the United Nations, Congress, and other venues.
With the United States both more demanding and less useful than before, Israel has focused on its other partners instead.
The nuclear deal with Iran is not the only point of disagreement. Over the past several years, Israel has contradicted U.S. policy at many other turns. For example, it eagerly joined the Chinese-led Asian Infrastructure Investment Bank against the United States’ wishes. And it abstained on a crucial UN vote condemning Russia’s annexation of Crimea, which Washington backed. With Netanyahu’s new grand strategy, these frictions are likely to persist.
The growing gap between Israel and the United States is caused by two political shifts—one within Israel and one in its neighborhood. First, it is more and more difficult to square the United States’ persistent focus on a two-state solution with the realities of coalition building in an increasingly right-wing Knesset. Second, the collapse of many of Israel’s long-term regional opponents led the Israeli government to zero in on the Iranian threat at a time when Washington is reluctant to intervene in the region. With the United States both more demanding and less useful than before, Israel has focused on its other partners instead.
Two decades ago, Israel faced a wide array of regional security challenges, but today the country’s security establishment focuses on Iran above all. Many of the threats that once worried Israelis—and pushed the government to rely on the United States’ diplomatic and military clout—are no longer serious concerns. Since the Second Lebanon War, Israel’s conventional military edge over potential rivals has grown substantially. The Iron Dome defends Israeli cities from rocket attacks. And, despite recurring violence, the security fence has generally protected Israelis from suicide bombers and mitigated the threat of a third intifada.
Further, the chaos that has roiled the Middle East over the past decade has improved Israel’s security outlook. Many governments that once menaced the country, such as Saddam Hussein’s in Iraq or Muammar al-Qaddafi’s in Libya, are no longer threats. Bashar al-Assad’s regime still clings to power in Syria, but the devastating civil war means that his military now poses far less of a threat to Israel. And the region-wide clash between Sunni and Shia has divided Israel’s longtime enemies. Hezbollah, for example, is deeply embroiled in Syria’s civil war. Hamas, meanwhile, has been weakened by a split with its long-time patron, Iran. Both groups’ ability and resolve to wage open conflict against Israel has decreased, at least in the short run.
As many of Israel’s regional opponents collapsed, the Iranian threat assumed center stage. In turn, Netanyahu has oriented Israel’s foreign policy toward countering the existential danger of an Iranian nuclear attack and the more immediate danger of Iranian-sponsored terrorism. For the most part, Israelis have supported Netanyahu’s strategy, particularly his opposition to the Iran nuclear deal. Somewhat less welcome, though, has been the resulting disagreement with Washington, which characterizes Iran as just one of many problems in the region. And less noticed has been the increasing agreement with Arab states, such as Saudi Arabia, which remain single-mindedly focused on Tehran.
Political shifts are not only a matter of Middle Eastern politics—there is a domestic element as well. Netanyahu’s reelection to a fourth term as prime minister this March demonstrates Israeli domestic politics’ rightward drift. Locked in a close race with a center-left challenger who advocated freezing settlement construction, Netanyahu won reelection in part by promising not to establish a Palestinian state. He formed a governing coalition with Naftali Bennett’s right-wing Bayit Yehudi party, two ultra-Orthodox parties, and one centrist party. The result is a coalition that is far to the right of what Washington would prefer.
Changing regional and domestic realities have pushed Netanyahu to develop Israel’s relations with rising powers through trade, arms sales, and diplomacy.Netanyahu’s coalition reflects broader trends in Israeli public opinion. Whereas in 2010, 48 percent of Israelis surveyed by the non-profit Israeli Democratic Institute ascribed equal importance to the “Jewish” and “democratic” components of Israeli national identity, that number reached a low of 24 percent in 2014. Moreover, the ultra-orthodox element of Netanyahu’s coalition reflects that community’s demographic growth and political power as a parliamentary bloc.
Despite Netanyahu’s more recent softening of his pre-election statements, the prime minister sees little domestic political value in pushing for a two-state solution, and many Israelis question whether Palestinian authorities are willing to make the tough concessions necessary for any agreement. Particularly after the collapse of peace talks in 2014 and Palestinian Authority President Mahmoud Abbas’ renunciation of the Oslo Accords in September, Netanyahu has little incentive to take the politically costly interim steps that the United States advocates. As a result, Netanyahu finds continued U.S. pressure less than constructive.
Changing regional and domestic realities have pushed Netanyahu to develop Israel’s relations with rising powers through trade, arms sales, and diplomacy, in a deliberate effort to diversify Israel’s portfolio of international partners.
India is one such new partner. After Netanyahu won reelection, Indian Prime Minister Narendra Modi tweeted, in Hebrew, “Mazel tov.” The two share an anti-Islamist agenda and an interest in finding connections between India’s globalized technology titans and Israel’s start-ups. Arms sales are brisk; Haaretz reports Israel is India’s second-largest arms supplier, with estimated annual sales between $1 billion and $1.5 billion. And New Delhi abstained on a recent high-profile United Nations vote on the Palestinian question. In the past, India would have reflexively voted against Israel. No longer.
מזל טוב ידידי Bibi @Netanyahu אני זוכר את פגישתנו הנעימה בניו יורק בספטמבר האחרון
— Narendra Modi (@narendramodi) March 18, 2015
China, too, is building closer ties with Israel. The Israelis have a long history of selling arms to China, but today the two countries’ trade is growing rapidly on all fronts. China is now Israel’s second-largest trading partner, behind only the United States. In 2014, bilateral trade grew to $11 billion, with $4 billion in joint investments and acquisitions. And as the West debates whether to boycott and divest from Israel, China is negotiating a free trade agreement.
Israel’s relationship with Russia is more complicated, given that the two countries have conflicting interests in the Middle East. The Kremlin’s arms sales in the region—especially to Iran and Syria—anger Israel. Despite this, the two countries have maintained a businesslike relationship, facilitated by the growing influence of Russian-speaking immigrants in Israeli politics. Both countries’ leaders detest Islamist politics; both value a relationship that is based on a private resolution of differences. The hotline established between the Israeli and Russian militaries to avoid mid-air accidents in Syria is only the latest example.
Israel has also developed a quiet but increasingly real security partnership with Saudi Arabia. The rise of Iran means that Saudi Arabia now shares core security interests with Israel, and the two countries are widely rumored to cooperate on intelligence and other matters. Perhaps even more remarkably, Israel is now in talks with Saudi Arabia, the United Arab Emirates, Oman, Qatar, and Kuwait about selling them the Iron Dome system.
All of these new partners offer substantial benefits that the United States does not. First, the Arab partners—and the Saudis above all—are prepared to counter Iran with force. Whereas Washington has limited itself to negotiations, economic sanctions, and covert sabotage, the Saudis have been far more aggressive in pushing back against Tehran, sending troops into Bahrain, bombing Yemen, and arming Syria’s rebels.
Second, compared with the United States and other Western powers, Israel’s new friends are far less vocal about the Palestinian issue. China and Russia occasionally offer to mediate between the Israelis and Palestinians, but neither sees the conflict as a priority. Even among the Arab states, the issue has declined in importance. Egypt’s military is focused on stamping out Islamist groups at home, Jordan is struggling to manage a massive influx of Syrian refugees, and Saudi Arabia is fixated on Iran. In a region beset by immediate crises, the decades-old Palestinian question simply doesn’t rank highly.
Netanyahu’s grand strategy has the virtue of flexibility, but it also poses risks for Israel, at home and abroad. A strategy of tacking toward other powers threatens to alienate important segments of the American public and policy elite at a time when Israel still overwhelmingly depends on Washington for military ties and security guarantees. Beyond shared democratic values, Israel’s relationship with the United States depends on shared strategic interests. Consistently voting with Russia on key issues at the United Nations or developing cozy military ties with China may, in the long run, cause a true break between the United States and Israel.
The Chinese–Israeli relationship presents particular cause for concern. China is increasing its engagement with the Israeli tech sector, including through cooperation on cybersecurity, and is expanding defense ties. With growing tensions in the South China Sea, the Israeli–Chinese relationship is an area where Israel’s interests may meaningfully diverge from those of the United States. The notorious disagreement over Israel’s attempt to sell the Phalcon early warning system to China in 2000, as well as more recent reports that Israel’s head of defense exports sold U.S. missile technology to China, demonstrate the conflicts that are likely to arise as Israel grows closer to China.
For now, as the United States and Israel prepare for Netanyahu’s visit to the White House on November 9, relations appear to be on the mend. The two countries have resumed talks regarding a ten-year military aid package, which Israel had suspended in late June amid disagreements about the Iran deal. The White House was likewise quick to walk back U.S. Secretary of State John Kerry’s recent comments that seemed to attribute the ongoing wave of Palestinian terrorism to Israeli settlement activity.
Yet the structural factors that drove apart Israel and the United States remain. The two sides may claim that there is “no daylight” in their relationship. But the reality is that, given the two countries’ different positions, Israel will spend its time developing useful new partners rather than trying to keep Washington happy. So long as this grand strategy guides Israeli statecraft, daylight will shine between Washington and Jerusalem.