Labeling Israeli products: Minor problem or strategic threat?

A measure in the pipeline is the proposed labeling of a list of Israeli products from the occupied territories.

The Battir valley, a World Heritage UNESCO site, where the IDF had wanted to built 500 meters of the West Bank security barrier. (photo credit: TOVAH LAZAROFF)
The Battir valley, a World Heritage UNESCO site, where the IDF had wanted to built 500 meters of the West Bank security barrier.
(photo credit: TOVAH LAZAROFF)
The push in EU for some kind of sanctions against Israel for not taking any steps to restart the dormant peace process is gaining momentum.
A measure in the pipeline is the proposed labeling of a list of Israeli products from the occupied territories.
In a letter (April 13) to the EU high representative of foreign affairs and security policy, Federica Mogherini, 16 foreign ministers out of 28 EU member states asked her taking the lead on labeling settlement products.
What they are asking for, as they did already in 2013 of her predecessor Catherine Ashton, is that EU issue guidelines on the labeling. In their view it is an “important step in the full implementation of EU’s longstanding policy, in relation to the preservation of the two-state solution.” To this is added a consumer protection aspect. European consumers must have confidence in knowing the origin of goods they are purchasing in supermarkets and shops.
But the consumer aspect shouldn’t be overrated. The main reason for EU to issue guidelines for labeling produce from the settlements is political. In the EU’s view the settlements are illegal and an obstacle to peace. It has no interest in supporting the economy of the settlements by misleading labeling.
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As long as there was some hope in the peace process, the EU suspended its guidelines on labeling. Now with the new Israeli government, made up of right-wing and Orthodox parties, when whatever peace hope there was has faded away and announcements are made on new construction in the settlements, the EU has obviously lost patience with Israel.
That said, it should be recalled that Israel already has agreed with the EU that products from the occupied territories will have to be distinguished for customs purposes and not benefit from preferential duty-free treatment according to the EU-Israel Association agreement. Such a technical agreement was adopted in 2004 without prejudice to the political positions of the two parties to the agreement.
Israel could easily agree to this because of the insignificant role of settlement produce in Israel’s trade with EU. According to a recent estimate it only amounts to less than 300 million euro, or one percent of the total EU-Israeli trade in 2013. Another reason was that there was no labeling on the products.
The information on the origin of the products – including postcodes – was stated in the customs documents.
This might change now. The UK was the first EU member to advise retailers to label agricultural products from the settlements. In December 2009 the UK department of environment, food and rural affairs issued technical advice to retailers to label food grown in the settlements, for among other reasons to distinguish it from Palestinian products.
The British advice said that traders and retailers “may wish” to indicate whether the product originated from an Israeli settlement or from Palestinian producers. This could take the form, for example, of “Produce of the West Bank (settlement produce)” or “Produce of the West Bank (Palestinian produce),” as appropriate. To what extent it affected consumer demand in UK is not known.
The Dutch government, which announced in 2014 – and later backtracked – that it would issue similar advice proposed that products should be labeled “Israel settlements in the Golan Heights, East Jerusalem, the West Bank or in the Palestinian territories.”
Belgium issued a notice in August 2014 that made labeling of food and agricultural products compulsory, with for example the following label: “Product of the West Bank (Israeli settlement).”
The choice of label obviously lies in the hands of the EU and retailers in the member states. Labels like those above are stating a fact about the origin of the products. Israel does not want “to call the child by its name.” However, from an Israeli point of view EU-wide guidelines on labeling, which Israel could influence, are preferable than having EU member states choosing their own labels.
The Israeli export of agricultural produce from the settlements is marginal and any reduction of its size because of a decrease in consumer demand would not damage the Israeli economy. However, the effect on the rest of the export cannot be ignored.
From labeling settlement products, the path to boycotting not only them but Israeli export in general might be short. When you start to distinguish between products from within and outside the Green Line, you might raise doubts about the origin of all Israeli products. The labeling plays also into the hands of the Boycott, Disinvestment and Sanctions movement.
The EU will keep telling Israel that this was never the intention and that labeling settlement products is not part of any boycott campaign against Israel. It will be up to the consumers to decide if they want to buy products from settlements or not. This is not the whole truth since EU also plans to limit the jurisdiction of Israeli authorities to certify that certain food products comply with health safety requirements. Without certification, no export of those settlements products will be possible.
The Israeli government is obviously upset. The new minister of public security, strategic affairs and information, Gilad Erdan, has reportedly established a task force to tackle the problem.
At least he has acknowledged that a minor issue from a purely economic viewpoint might become a potential strategic threat against Israel.
Israel should try to influence the wording of the labeling. If no agreement can be reached, Israel has two alternatives: either announce some confidence building measures and restart the peace process, hoping that this will persuade EU to suspend again the labeling, or completely halt the export of settlement products that require labeling. Most settlement products do not require labeling.
The first choice is very unlikely considering the composition of the current government that blames – partly correctly – the Palestinian Authority for the deadlock in the peace process.
There remains the other alternative. It should not be any problem for Israel to consume the products from the settlements domestically or export them to non-EU countries. Why risk the Israeli export? If no settlement products are exported, there won’t be any embarrassing labeling.
The author is a former official at the European Commission.