After a unanimous vote Monday by the Illinois House of Representatives to pass a bill prohibiting the state from investing its pension funds in companies that boycott Israel, Prof. Eugene Kontorovich of Northwestern University wrote in an analysis for The Washington Post that the significance of the bill’s passage “cannot be underestimated.”
European countries have in recent years been whispering dark threats in corporate ears about the “legal and economic risks” of doing business with Israeli companies. The vagueness of these warnings is a testament to their legal groundlessness. But such scare tactics could not help but affect, at the margin, corporate decision-making. Now, the EU will – if it is honest – have to warn businesses of the legal and economic risks of consciously refusing to do business with such Israeli companies.
More generally, the Illinois bill is part of a broad political revulsion over the long-simmering BDS movement (“Boycott, Divestment, and Sanctions” – the strategy of economic warfare and delegitimization against Israel). While BDS has gotten most of its successes with low-hanging fruit like British academic unions and pop singers, the anti-boycott efforts are getting an enthusiastic reception in real governments, on the state and federal level. And that is because the message of the BDS movement – Israel as a uniquely villainous state – is fundamentally rejected by the vast majority of Americans.
Kontorovich noted that in addition to the Illinois bill, both the United States House of Representatives and Senate have passed non-binding amendments to trade bills that would discourage boycotts of Israel. The message of these amendments, Kontorovich wrote, is that “they clearly establish that in the eyes of America, the BDS is not like the civil rights protests, as its supporters love to claim, but rather more like the anti-Jewish boycotts so common in Europe in the 20th century, and in the Arab world until this day.”
An effect of the law, Kontorovich told The Tower, is that it will give companies doing business with Israel a defense against the BDS movement. “Companies don’t want to boycott Israel,” he said. “In fact, companies targeted by the BDS movement are currently doing profitable business with Israel, but are afraid of the tactics of the BDS movement that want them to stop. This allows companies a good response to the BDS movement. The Illinois law will give protection to businesses—such as Caterpillar—and help save jobs in Illinois. The law, if it has any effect on the performance of the pension fund, will be a positive one.”
The Illinois State Senate unanimously passed the anti-boycott bill last month. Gov. Bruce Rauner tweeted that he will sign the bill into law when it reaches his desk.
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