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An Israeli Pivot to Eurasia?
02.12.15 14:24 Economics

On November 29, Israel suspended contact with the European Union on the Middle East peace process. The move marked the latest political salvo fired in an ongoing Israel-European Union feud over Brussels’ new product labeling policy for Golan and West Bank settlement exports.  That dispute also obscures one of Jerusalem’s recent diplomatic achievements: in mid-November, Israel entered into a free trade zone with the Moscow-led Eurasian Economic Union (EEU), a bloc comprised of Russia, Belarus, Armenia, Kazakhstan, and Kyrgyzstan.

Expanding Israel-EEU relations come at a critical juncture for Jerusalem. Russia is now two months into a military intervention across Israel’s northern border in Syria. Meanwhile, Kazakhstan and the other Central Asian republics are seeking openings with an Iran less restrained by international sanctions following the P5+1 nuclear accord.

Just days after the EEU-Israel agreement was signed, Turkey shot down a Russian Sukhoi Su-24 jet near the Turkey-Syria frontier. Moscow responded with a sanctions package against Ankara. Russia listed Israel as a potential substitute to compensate for Turkish exports impacted by sanctions. Thus, for Russia, Israeli entry into a free trade zone with the Eurasian Union comes at an opportune time.

Russia-Israel ties are fairly strong today, a striking contrast to Jerusalem’s bitter Cold War rivalry with the Soviet Union. The two countries boast healthy trade relations and political ties are remarkably strong too – Israel broke with its Western allies and abstained on a United Nations resolution that supported Ukraine’s territorial integrity. While Moscow maintains close relationships with Iran and Syria, Israel appears intent on looking the other way—provided Russia’s actions in the Middle East do not immediately threaten Israeli security. To this end, Russia and Israel established a coordination mechanism to prevent confrontations over Syria. In the aftermath of the shootdown, Jerusalem made a point of distinguishing its behavior vis-à-vis Russia from Turkey’s recent actions.

In this context, Israel’s relationship with the Eurasian Union’s primary power makes sense. Israel’s ties with the EEU’s second largest member merit broader explanation as well. At a superficial level, positive relations between Israel and Kazakhstan may appear strange. After all, most Muslim-majority countries do not recognize Israeli statehood. Deeper analysis reveals that there is firm grounding for the Israel-Kazakhstan relationship, especially as Jerusalem experiences frustration with Brussels over the Palestinian question.

Unlike the EU, Kazakhstan takes a fairly passive approach to the Israeli-Palestinian dispute. The government’s official stance adheres to the standard two-state mold supported by most countries, with the Kazakh Foreign Ministry simultaneously enshrining Israeli security and Palestinian self-determination. However, Kazakhstan’s policy stops at mild rhetoric. Astana avoids the diplomatic activism that marks American or EU engagement with Israelis and Palestinians. This position is not unlike China’s Israel policy. Beijing maintains positive trade relations with Israel and has even collaborated with Jerusalem on defense projects. This cooperation runs in parallel with official Chinese recognition of an independent (albeit theoretical) State of Palestine and a rather unimaginative “four-point peace plan.”

The Central Asian republics achieved independence at roughly the time religious fundamentalist groups like Hamas and Islamic Jihad began to replace the largely secular-nationalist Palestine Liberation Organization as Israel’s chief opponent. The ex-Soviet Central Asian countries are all home to majority Muslim populations, but their governments have fashioned strictly secular regimes (sometimes even suppressing the peaceful practice of Islam).Kazakhstan and its neighbors may look to radical Palestinian groups and see in them their own domestic Islamist threats (real and exaggerated) like the Islamic Movement of Uzbekistan and Hizb ut-Tahrir.

It follows that Israel enjoys a robust security relationship with Kazakhstan. Over two decades into Kazakh statehood, Israeli contractors continue to help modernize Astana’s Soviet-era military inventory. Israeli firms like Rafael, Israel Military Industries, Israel Aerospace Industries, and Elbit Systems are present in the Kazakh defense sector, supplying everything from UAVs to communications equipment. In January 2014, Israel and Kazakhstan reached a military cooperation agreement, providing an official basis for ongoing arms sales, as well as future technology development and joint training exercises.

Jerusalem and Astana cooperate in other critical areas outside military exchanges. Kazakhstan provides Israel with over a quarter of its oil needs. Israel assists Kazakhstan in developing civilian technologies in areas like agriculture, public health, and water management. Beyond practical cooperation, Israel benefits from claiming a Muslim nation as a friend – a rare satisfaction for Jerusalem.

There are limits to Israel-Kazakhstan cooperation, however. Iran is the most conspicuous area of divergence between Astana and Jerusalem. The Kazakh government consistently resists demands from both Iran and Israel to take a side in their longstanding disputes. In sharp contrast with Israel, Kazakhstan greeted the nuclear deal between Iran and the P5+1 powers with praise. Kazakhstan greatly values its relationship with Iran and perceives Tehran as a natural partner on a range of projects. In the area of Europe-bound natural gas exports, Iran could provide the Central Asian republics with an alternative path to Russian-controlled pipelines and the ever-controversial Trans-Caspian route. Astana already cooperates with Tehran on other infrastructure projects. December 2014, Kazakhstan, Turkmenistan, and Iran inaugurated a new railway link, which could carry 20 million tons in trilateral trade by 2020 (compared to 3 million tons in 2014).

Beyond obstacles to Israeli cooperation with the Eurasian Economic Union’s members, there is tangible ceiling for the relationship’s potential benefits. Israel’s present trade with EEU constituent states only accounts for about 7.96 percent of total exports (primarily exports to Russia). These ties are greatly overshadowed by trade with the European Union, a 508 million-person market that purchases over 25 percent ($14 billion USD) of Israel’s annual exports. Less than two percent of exports to the EU originate in West Bank settlements. A free trade zone with the EEU is certainly a victory for Israel, and will likely increase commercial exchanges with the economic bloc. Still, for Jerusalem, the agreement could ultimately demonstrate more symbolic political value than practical utility. Given its extensive connections to Europe, Israel may eventually feel compelled to make amends with Brussels.

 
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