The French government last week decided that the recent anti-boycott law will not be applicable to Arab-imposed restrictions on trade with Israel. The government managed to overturn the practical applications of the law, approved by Parliament on June 7, by issuing an “executive directive” instructing the state-controlled Foreign Trade Insurance Commission that the law does not cover French trade in the Middle East.
The law, proposed by both opposition and majority members, outlawed all boycotts if based on national origin, race or religion. The law also included a paragraph enabling the government to over-rule Parliament “if the national interests demand it”.
The government has decided to act in a more direct manner. French exports are insured by a state-controlled commission which guarantees industrialists and businessmen the payment of their exports. Since the law was passed last month, the commission has refused to approve contracts which include anti-Israeli boycott conditions.
Last week, the government published an executive directive in the official gazette lifting the law’s provisions on trade with the Middle East. The directive says, “exporting firms should be helped to conquer new markets, especially in oil-producing countries engaged in an industrialization process”.
The directive adds: “In order to balance our foreign trade and halt unemployment the country’s export drive must be considered a national priority”. The government’s directive will enable the commission, known as COFACE, to resume underwriting French exports to the Middle East even if the contracts contain an anti-Israeli boycott condition.
The “Free Trade Movement,” a pro-Israeli organization, announced that it will challenge the government directive in the Supreme Court. The “Free Trade Movement” says it will prove that the government’s action is not necessary as “other countries, which have resisted Arab boycott demands, have not suffered economic difficulties and even managed, as Holland has done, to increase their exports to the Arab world”.
The French Zionist Organization has also protested against the government directive which it describes as “another instance of the government’s anti-Israeli bias”.
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