Ireland is Israel's second biggest trading partner - we need to look at why

Irish Examiner

2 days ago

Last weekend, Al Jazeera reported a list of Israel's largest trading partners. Most members of the top 10 were not surprising.
In 2024, the USA was by far the most significant, alongside prominent allies the UK, Germany, and the Netherlands. China features in third place. However, Israel's second most significant trading partner shocked many observers: its most 'vocal' European critic, Ireland.
From the perspective of those of us who have been advocating for a comprehensive boycott of Israel against its apartheid, occupation, and genocide of Palestinians, this is a bewildering and disappointing statistic.
What are we trading with Israel?
Israel's exports to Ireland have exploded since 2021. In 2020, exports to Ireland totalled just €198 million. In 2021, this figure skyrocketed to €1.44 billion, growing year on year to €3.26 billion in 2024.
What's behind these numbers, and how do they help explain the Government's inaction on the genocide in Gaza - from their unwillingness to fully enact the Occupied Territories Bill (OTB), to stop the sale of Israeli war bonds through the Central Bank, or to close Shannon Airport to the US army?
Since the Celtic Tiger, Ireland's economic growth is explained through our tax-friendly facilitation of multinational companies, particularly finance, tech, and pharmaceutical sectors. What has been less interrogated is the extent to which Ireland's dependence on a handful of these US-based companies (with close ties to Israel) influences Ireland's internal and external policy, including on Gaza.
The recent figures on exports to Ireland from Israel represent an astonishing growth in trade. In a country so well-known for creative finance and tax arrangements, it might seem reasonable to assume the jump is due to services. But according to financial reporting, the €3.26bn is in goods - not services.
The question, though, shouldn't be what are 'we' buying, but which companies are buying? Of the €3.26bn in exported goods, €3.02bn is 'electronic integrated circuits and microassemblies,' mostly used in tech and pharmaceutical manufacturing. All other goods total around €230m, similar to 2020.
Who is buying these Israeli goods, and why?
One answer may lie in Leixlip, and multinational computer chip manufacturer Intel's Ireland plant. The HSN code for electronic integrated circuits is 8542. When you search that on economic databases, by far the largest exporter of these products from Israel is Intel. Like other multinationals, transfers between national subsidiaries is extremely common, as components are transferred between facilities for fabrication.
Leixlip's sister factory is located in Kiryat Gat, Israel, only a few kilometres north of Gaza, with well-reported projects and personnel collaboration between facilities.
The Intel plant in Leixlip, Co Kildare. Leixlip's sister factory is located in Kiryat Gat, Israel, only a few kilometres north of Gaza.
Whether the plant in Leixlip is relying on components from its Israeli counterpart, or using Ireland to transfer goods internally to take advantage of Irish tax benefits - or maybe both - there is little doubt that a huge chunk of this statistic is coming from the activities of Intel and similar companies.
The point is that this trade is about an economic relationship more so than about specific goods or services consumed or performed in Ireland. Intel's global headquarters remain in California, where most of these profits continue to accumulate, even if its global finances and fabrication supply chains are filtered through Ireland as one stopping point between Israel and the US.
Dependency
Intel has been a boycott target, but its entrenchment in the Irish political economy goes much deeper than anything we can meaningfully stop buying. Beyond specific numbers, this is worth historicising: Intel is remembered as the 'whale' that the IDA finally landed in 1989, after 30 years of foreign direct investment (FDI)-led industrialisation policy.
By the end of the century, Ireland was the world's second largest exporter of software behind the US, with software products accounting for 12% of the country's exports. Seán Lemass and TK Whitaker's late-1950s economic pivot is usually heralded as the origin of Irish modernisation and prosperity, but Intel bore the fruit of its success.
Sociologist Denis O'Hearn has shown, however, that this founding myth of modern Ireland often elides the decisive role of the US in shaping post-War Government policy. The US wanted Ireland to end protectionism and open itself to free trade, particularly with more economically-protected Europe.
This meant favourable conditions for US companies, including grants for factories, machinery, low-cost electricity, and tax relief on profits. Why did the US have such a say in Irish economic policy?
As elsewhere, it was through economic instruments such as trade and debt, as well as more overt forms of political and military intervention. This was what dependency theorists in Latin America and Africa were coming to understand throughout the 1960s.
While countries across the Third World gained formal independence, they found themselves subject to new forms of economic dependence at the hands of the US and former European colonial powers. As Brazilian economist Theotonio Dos Santos explained in 1970: "[b]y dependence we mean a situation in which the economy of certain countries is conditioned by the development and expansion of another economy to which the former is subjected."
As the US took on a greater role in shaping Ireland's economic policy, it also influenced our foreign policy. In 1957, Frank Aiken, Minister for Foreign Affairs, came under criticism for positions he took up on behalf at the UN General Assembly.
Embodying an active policy of neutrality, Aiken sought to stand above imperialist blocs and alliances. But this was in stark contrast with a new economic policy to woo US industry and investment.
"Does this entice anybody or make them more amenable to come to us and help us here if we take up that attitude, when we act in an independent and, I may say, irresponsible fashion?" questioned one Fine Gael TD in the Dáil. The resonances with today are undeniable.
So what?
A few things in the past week highlight how Ireland's ongoing dependency is shaping the State's inaction on Gaza.
First, the OTB was finally tabled by the Government, excluding services. Second, an action to the Dáil to stop Israeli war bonds being sold through the Central Bank was blocked by a majority 87 Government and independent TDs. Third, the Taoiseach publicly referred to Israel's actions in Gaza as a 'genocide,' placing the blame on the shoulders of Netanyahu's right-wing Government.
These three events solidify the gap between rhetoric and action that protects Ireland's economic complicity. For all the performative statements by Government officials and TDs, meaningful sanctions on the Israeli economy would jeopardise Ireland's economic position.
Palestinians inspect the damage at a UN school used as a shelter by displaced residents that was hit by Israeli military strikes, killing more than 15 people, in Jabaliya, northern Gaza Strip, last month. Photo: AP/Jehad Alshrafi
This is a result of dependency. Ireland's complicity in these systems is about facilitating economic relationships between companies and financial institutions rather than anything the majority of Irish people actually buy or materially benefit from.
As the Financial Times reports, the exclusion of services from the OTB by the Government is not to protect trade necessarily. Ireland's trade with the Occupied Territories is negligible, with goods amounting to only a few hundred thousand euro in the past five years.
By excluding services, though, the Government has shielded companies with EMEA headquarters in Ireland from being subject to Irish law for their operations in East Jerusalem, the West Bank, and the Golan Heights - like Airbnb, or insurance brokers, who advertise lets and services in these illegal settlements.
Thus, it is revealing that the Government has refused to leverage its strongest position: its role as a platform for multinationals between the US and Europe. The removal of services isn't about specific trade flows or company profits, but it surfaces contradictions about Ireland's role in the capitalist world system.
It also highlights the increasing misalignment between Government action and popular sentiment: 61% of Irish people support full sanctions on the Occupied Territories.
'Consequences'
Even worse, it illustrates the State's embedded complicity in imperialist war economies.
In November 2024, a report from The Ditch revealed that the US ambassador to Ireland, Claire Cronin, had written directly to the Tánaiste warning of "consequences" if Ireland enacted the OTB. In her email, the Ambassador cited more than 1,000 US companies located in Ireland that would be adversely affected by the passing of the OTB.
This is a clear example of the US using its economic dominance over Ireland to advance its own foreign policy goals, and raises the questions: who makes decisions, and who determines Ireland's foreign and trade policy?
We have to acknowledge that the lack of action by this Government is about the State's longer-term foreign and trade policy. Remember, top civil servants informed ministers that the OTB would be an act of 'economic terrorism.'
Of course we need to hold Government politicians to account and advocate boycotts and sanctions where we can. But if a different Government was in power tomorrow, without changing the model of economic development, would they be able to do anything materially different?
The Government's words of solidarity and condemnation, let alone paltry action, mean less than nothing when it is entrenched State policy to allow multinational companies to launder profits reaped from genocide and apartheid.
Without confronting this core facet of Irish State development policy, the treadmill of Government inaction will continue apace.
What is to be done?
Justifiably, people might feel bewildered and disempowered. It's about the entire Irish economic model, and not specifically boycottable targets; and at the same time, the Government acts at the behest of economic powers, rather than the people of Ireland. What can we do?
Dependency theory offers a starting point, and one that has been marginalised in mainstream Irish politics and economic thinking. If we are serious about taking more action on Gaza, we have to understand that the genocide has brought to the surface the contradictions of Ireland's position in the world and amongst sabre rattling empires.
Given Ireland's deep involvement in US-Israeli trade, industry, and finance, we are strategically placed to make a difference. The most tactical pressure points remain US warplanes going through Shannon, the sale of Israeli war bonds, the OTB, and the EU's economic relationships with Israel.
Each of these surface Ireland's long-standing dependency on the US and positioning between the EU. Shifting this dynamic will require enormous, concerted and focussed pressure.
Understanding Ireland's dependency as a defining feature of Irish economic development also allows us to see how the State's undemocratic actions to support global extractive industries, erode our neutrality, and fail on Palestine are part of the same political economic matrix.
These three fronts will converge at the national demo for peace and neutrality taking place in Dublin on June 14. This is an opportunity to show the Government that we want serious, meaningful action to untangle Ireland from its complicity in imperialist economic rivalries, wars, and genocides.
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