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U.S.-Israel Economic Cooperation: Fighting The Arab Boycott

Members of Congress consistently objected to Arab boycotts efforts to discriminate against American Jews and Israelis. In 1959, the Senate adopted an amendment opposing foreign aid to countries that discriminate against Americans on the grounds of religion. The primary motivation for this and other early legislative efforts was the Arabs' policy of refusing visas to American Jews and, more specifically, the Saudis' refusal to permit Jews to be stationed at the United States' base at Dhahran.

In 1960 Congress adopted the Douglas-Keating "Freedom of the Seas" amendment, which addressed itself to one of the aspects of the Arab boycott that violated international law. It said that "the peace of the world is endangered" when nations that receive assistance under the Mutual Security Act "wage economic warfare against other nations assisted under the Act; including such procedures as boycotts, blockades, and the restriction of the use of international waterways." Five years later, Congress adopted a broader regulation that held that U.S. policy opposed "restrictive trade practices or boycotts fostered or imposed by countries against other countries friendly to the United States."

In 1975, Sen. Frank Church made public for the first time a list of 1,500 American firms on the 1970 Saudi blacklist. Publication of the list made the public aware, for the first time, of the scope of the Arab boycott. Particularly shocking were revelations of U.S. government complicity; perhaps, the most serious of which was the admission that the Army Corps of Engineers excluded Jewish soldiers and civilians from projects it managed in Saudi Arabia.

In 1977, Congress adopted legislation encouraging, and in some cases requiring, U.S. companies to refuse to take actions that have the effect of supporting the restrictive trade practices or boycotts fostered or imposed by any foreign government against a country friendly to the United States or against any American. This law was adopted despite threats from the Arab world. As the Washington Post wrote (April 17): "No realistic person would assert that an anti-boycott law will not cost something . . . . But if there is a price to keep foreigners from compelling Americans to trample on their own basic values, surely it is worth paying and, as surely, thoughtful and responsible Americans will be willing to pay it."

In signing the anti-boycott bill into law, President Jimmy Carter said: "My concern about foreign boycotts stemmed, of course, from our special relationship with Israel, as well as from the economic, military, and security needs of both our countries. But the issue goes to the very heart of free trade among nations." Carter said the bill was intended to "end the divisive effects on American life of foreign boycotts aimed at Jewish members of our society. If we allow such a precedent to be established, we open the door to similar action against any ethnic, religious, or social groups in America."