In Ireland in the 1870's, a landlord called Captain Charles Cunningham Boycott was so cruel to his tenants that the community agreed to stop dealing with him. The act of choosing not to trade with an individual or company was named after this unpleasant man.
The principle of boycotting is probably most famous in relation to the anti-apartheid boycott applied against South Africa.
However, when this idea was applied by the Arab League against Israel (in the 1970's) the U.S. legislated to prevent the participation of U.S. citizens, companies (and foreign subsidiaries) in other nation's economic boycotts or embargoes. (see http://www.bxa.doc.gov/ComplianceAndEnforcement/oacrequirements.html)
The anti-boycott legislation contained in the Export Administration Regulations applies to all U.S. citizens, U.S companies and their foreign affiliates, and relates to the sale, purchase, or transfer of goods or services (including information) within the United States or between the U.S. and a foreign country.
In particular, these laws make it illegal to refuse to do business with any country (or company who does business with a repressive regime) which is not officially blacklisted by the U.S State Department. So, it is illegal for any U.S citizen or company to refuse to trade with
1. Companies like Caterpillar (who are building Israel's illegal version of the Berlin Wall).
2. Members of the "Global Climate Coalition" (Esso, Ford, Texaco, Mobil and Amoco) who spread disinformation about Global Warming in order to maintain their high profits at the world's expense, and who trade with repressive regimes.
3. Any of the numerous repressive regimes that the U.S is pals with (including Israel).
And the penalty - a fine of up to $50,000 or five times the value of the exports involved (whichever is greater) and imprisonment of up to five years.
On 2nd July 2004, the Presbyterian Church in the USA voted to begin investigating the possibility of divestment from companies doing business in Israel, and to place a boycott on certain Israeli goods. The idea was inspired by the boycott in South Africa which helped to stop Apartheid. While pro-Israeli groups have become incensed by any comparison drawn between the situation in the middle-east and apartheid, Archbishop Desmond Tutu described the violence of the apartheid regime as "a picnic" in comparison with the utter brutality of Israel's occupation of Palestine.
The Church has been threatened with legal action by a number of pro-Israeli groups, despite clarifying that "the assembly (in 2004) authorized exploration of a selective divestment of church funds from those companies whose business in Israel is found to be directly or indirectly causing harm or suffering to innocent people, Palestinian or Israeli. It did not approve a blanket divestment from companies that do business in Israel, as their detractors claim.
They have clarified their view that "the security of Israel and the Israeli people is inexorably dependent on making peace with their Palestinian neighbours, by negotiating and reaching a just and equitable solution to the conflict that respects international law, human rights, the sanctity of life, and dignity of persons, land, property, safety of home, freedom of movement, the rights of refugees to return to their homeland, the right of a people to determine their political future, and to live in peace and prosperity."
On 27th January 2005, the Israeli Committee Against House Demolitions (ICAHD) issued a statement on a direct strategy of divesting from Israel. The statement targeted the occupation itself, rather than simply Israel. ICAHD called on the international community to work as a whole to hold Israel accountable for its many violations of international law. (http://www.icahd.org/eng/)
However, some groups persist in claiming that these actions are against U.S. law, and anti-Semitic. It should be remembered that both Israel's Supreme Court and the International Court of Justice had ruled that the wall being built through Palestinian land was illegal. Furthermore, Israel would have more UN Resolutions against them than any other nation state if the U.S didn't veto them all. (for a truly scary list of the vetoes have a look at http://www.jewishvirtuallibrary.org/jsource/UN/usvetoes.html)
I consider the stance taken by the Church and the ICAHD to be decent and reasonable, and certainly not anti-Semitic.
Those who seek to portray these actions as anti Semitic argue that "Israel is the only country in the Middle East that has laws specifically protecting every resident from discrimination regardless of the religion practiced or citizenship. In the Arab world, however, Jews are subject to the Dhimi laws, a set of laws that not only allow, but prescribe specific methods of discrimination against Jews. Many Arab Israelis live harmoniously in Israel, and Israel openly welcomes Israeli Arabs who want to live in peace. Israeli Arabs are even represented in the Knesset, Israel's parliament." (http://www.boycottwatch.org/abi/divest002.htm)
This is a very "convenient" reading of history. Since the 1948 war, the (undemocratic) Arab regimes were the central factor in protecting the newly emerging "Jewish state". Many of Israel's Arab neighbours moved Palestinian refugee camps away from the Israeli borders to prevent infiltration (or the return home) of Palestinians. Meanwhile, Israel's best buddy (the U.S.) has systematically backed undemocratic and repressive regimes (e.g. the Hashemite Kings in Jordan, the Saudi Kings in Arabia, Mubarak of Egypt, Saddam Hussein in Iraq prior to the Gulf War, and the Emirates in the Gulf States), and undermined or removed popularly elected governments (e.g. removing Musadiq in Iran in the early 1950s, invading Lebanon in the late 1950s, protecting the Hashemites in Jordan in the late 1950s, and undermining Nasser in Egypt).
Even if the recent developments between Israel and Palestine lead to lasting peace (and I sincerely hope they do), the principle of the Boycott should be protected in any "Democracy".
As recently as 2003, a Missouri company was fined $6,000 for not reporting a customer's question to the federal government. So what was this dangerous request - "Are any of these products made in Israel, or made of Israeli materials" (http://www.unknownnews.net/0626-2.html)
The boycott is one of the most powerful (and peaceful) tools available to individuals. In both the U.S and the U.K there is little to choose between each political party, your vote can do very little to change the world for the better. Withdrawing your economic support from a company is all you have left when the presidency can be bought (as in the U.S) and the Prime Minister holds the special relationship with a bully as more valuable than the will of the people (as in the U.K).
Thankfully, those of us who live in the U.K still have the right to make ethical decisions without being reported to the government - so much for the land of the free!