Businesses fret over Palestinian U.N. vote
U.S. President Barack Obama meets with Palestinian President Mahmoud Abbas on September 21, 2011 in New York City.
Steve Chiotakis: A top Palestinian official says President Mahmoud Abbas will push forward with a vote on full entry into the United Nations. And the U.S. is expected to veto the proposal at the U.N. Security Council.
After that, Palestinians vow to then go to the U.N. General Assembly, where a majority of countries are expected to vote in favor. Now for businesses on both sides of the debate, there are a lot of possible economic repercussions.
And reporter Daniel Estrin is with us now from Jerusalem with that. Good morning, Daniel.
Daniel Estrin: Good morning.
Chiotakis: Who are Israel's main trading partners? What would happen to them if this U.N. vote goes forward as planned?
Estrin: Israel's biggest trade partners are the U.S. and European Union countries. The economy in Israel is pretty robust. Half of exports are in the high-tech sector. Israel exports computers and software, and also technologies like drip irrigation for agriculture; defense systems, which Israel's military often developed in connection with Israeli industry. So, the U.S. and Europe also trade with the Palestinians but to a lesser extent.
Now, there's a fear in Israel that Palestinian statehood recognition in the U.N. could lead to public pressure on companies to stop doing business with Israel. And that could deal a serious blow to the Israeli economy. But in many ways, its very hard to simply boycott all Israeli products, because then you'd have to boycott things like laptop computers because many big name computer companies build their products with chips developed in Intel labs in Israel.
Chiotakis: Would this U.N. vote, Daniel, mean a change on the ground for the Palestinian economy?
Estrin: Well that depends on how the politics of this vote play out.
I asked Palestinian businessman Ibrahim Barham how he'd feel the day after if the Palestinians do win the vote. And he said it would make him feel more confident to invest in the Palestinian economy.
Ibrahim Barham: Myself and most of the Palestinian businesspeople will look for it positively and we're gonna invest more in our economy and we are going to feel more secure because we can see that things are going to change, so we are going to see good fortune for us as businesses to invest more.
But there are other factors here too. Congress has been debating for months about scrapping millions of dollars in aid to the Palestinians if they go through with this U.N. statehood bid. And an Israeli diplomat has also hinted Israel could withhold transferring tax money it collects on behalf of the Palestinians. Israel has done it a few times before, so without all that money the Palestinian economy could collapse.
Chiotakis: All right. Daniel Estrin joining us from Jerusalem. Daniel, thank you.