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### Viewing cable 06COPENHAGEN352,

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06COPENHAGEN352 | 2006-03-21 05:27 | 2011-05-19 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Copenhagen
Appears in these articles: http://www.aftenposten.no/spesial/wikileaksdokumenter/article3965559.ece

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    VZCZCXYZ0001
    PP RUEHWEB

    DE RUEHCP #0352/01 0800527
    ZNR UUUUU ZZH
    P 210527Z MAR 06
    FM AMEMBASSY COPENHAGEN
    TO RUEHC/SECSTATE WASHDC PRIORITY 2128
    RUCPDOC/DEPT OF COMMERCE WASHDC

` `

    UNCLAS COPENHAGEN 000352

    SIPDIS

    SIPDIS

    SENSITIVE

    E.O: 12958: N/A TAGS: ECON PREL ETRD PHUM IS DA

    ¶1. (U) Summary: In the context of domestic Danish politics following the Mohammed cartoon crisis, it has become known that some Danish firms accept the use of anti-Israel clauses in trade agreements with certain Muslim countries. The government of Prime Minister Anders Fogh Rasmussen, despite considerable irritation with Danish business for pressing the government to distance itself more clearly from the publication of the cartoons, joined the business community in downplaying the use and significance of anti-Israel clauses. Unlike the United States, Denmark has no legislation explicitly prohibiting the use of such clauses in trade agreements. End Summary.

    ¶2. (U) Jyllands-Posten, the Danish newspaper which published the Mohammed cartoons, reported in late February that a handful of Danish firms have signed anti-Israel clauses when doing business in the Middle East. The story surfaced just when domestic political wrangling over the Mohammed cartoon crisis was escalating. On February 27, PM Fogh Rasmussen publicly accused broad circles in Danish corporations, culture and media of failing to support freedom of expression during the controversy. This opened a broad fissure between the government and business leaders, and exacerbated tensions between Fogh Rasmussen´s Liberal Party and its junior coalition partner, the staunchly pro- business Conservative Party. In this context, the allegations of craven Danish business practice, and the implication of government acquiescence, generated considerable public attention.

    ¶3. (U) The dairy producer Arla admitted having active contracts with clauses that no ingredients produced in Israel are used in the production of Arla´s exports to Arab countries and that shipments are not sent through Israel. Furthermore, it is clear that at least four Danish firms agreed to participate in some form of boycott of Israel in return for trade with Iraq in 2000-2001:

    -- Bruel & Kjaer, a manufacturer of sound and vibration equipment, signed a clause that its goods did not include any parts, raw materials, labor or capital of Israeli origin and that the goods did not pass through Israeli ports;

    -- The pharmaceutical producers Maquet and Leo Pharma signed clauses prohibiting trade or transport through Israel;

    -- Bukkehave, a firm supplying vehicles and spare parts to international organizations and companies working in developing countries, signed a clause to "abide by and comply in all respects with the rules and instructions issued from time to time by the Israel boycott office in Iraq."

    ¶4. (U) These companies downplay the significance of the clauses. Arla states that despite signing the clauses, it has never boycotted Israel and trade with Israel has been increasing. Leo Pharma no longer maintains these clauses but says they were previously a condition for selling medicine in the Middle East. Leo Pharma has maintained regular trade with Israel despite the clauses. Bukkehave states that the agreement was signed at a local level.

    ¶5. (U) Post approached some of the main business organizations in Denmark for their views on the prevalence of anti-Israel clauses. According to the Confederation of Danish Industries (DI), the use of such clauses is limited at present and is diminishing in line with increasing Arab WTO membership. DI Director Joergen K. Hansen said that "the boycott has on several occasions been discussed in parliament. DI has always been opposed to this form of special restriction and has supported attempts to find a solution at the EU level." DI paints a picture of an unofficial policy in some parts of corporate Denmark to sign the anti-Israel clauses but disregard them and continue trading with Israel, often through other subsidiaries in the group. Danish Shipowners´ Association official Ren Pihl Pedersen says the Danish shipping industry does not sign anti-Israel clauses and that "the problem has been on the decline for years and is almost non-existent at present."

    ¶6. (U) Ambassador Svend Roed Nielsen of the MFA´s Danish Trade Council says that the anti-Israel clauses have a long history but are rarely used at present except in trade with Syria and Libya. "We have informed companies that the boycott is clearly violating international trade standards but there is no Danish law prohibiting the companies from signing the clauses," Nielsen states.

    ¶7. (U) When asked by the Danish press for a public comment on the acceptance of anti-Israel clauses by Danish firms,
    the American Israel Public Affairs Committee (AIPAC) provided the following standard reaction: "Agreeing to boycott Israel in exchange for business in the Arab world reinforces Arab racism against Israel, demonstrates highly unethical business practices. and may be in violation of WTO rules. Danish companies should be particularly sensitive to this at a time when they are being targeted as well with unfair boycotts." In a follow-up comment to post, AIPAC´s Director of Media Affairs Joshua Block stated that "AIPAC sees the response as a pretty minor thing: a comment on something so basic as the Arab boycott."

    ¶8. (SBU) Comment: It may not be wholly coincidental that this story of questionable Danish business practice in the Middle East emerged just as political waters were roiling over the Mohammed cartoon crisis. Post´s inquiries support the view that the acceptance by the Danish business sector of anti-Israel clauses in trade agreements is limited and diminishing. In cases where they have been signed, firms appear to ignore these clauses in practice. Despite the absence of legal prohibitions, neither the government nor the Confederation of Danish Industries offers support or comfort to firms that have entered into such arrangements. Post will continue to monitor the issue.
    CAIN

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