Roundup: EU-Israel relations strain further over settlement goods labelling

Relations between the European Union and Israel strained further after Israel slammed the 28-country union's decision to impose special labelling on products made in Jewish settlements.

Israel reacted strongly, with its Prime Minister Benjamin Netanyahu Wednesday saying the EU should be "ashamed of itself" for taking this "immoral decision."

"TECHNICAL ISSUE"

EU Commission Vice-President Valdis Dombrovskis told reports Wednesday in Brussels that the new guidelines were a "technical issue," aimed at clarifying existing rules on the origin of products.

Under the guidelines, agricultural and cosmetic goods that were produced in the West Bank, including east Jerusalem, the Gaza Strip, and the Golan Heights, will now carry the words "Israeli settlement."

Israel captured these territories during the 1967 Mideast War, and later annexed the Golan Heights (originally a Syrian territory) and east Jerusalem, in a move never recognized by the international community.

The West Bank settlements are illegal under international law and the international community opposes them, saying their construction undermines prospects of establishing a Palestinian state alongside Israel.

The new guidelines, coming after four years of deliberations, was widely seen as a demonstration of growing European displeasure over Israel's continuing expansion of the settlements and its treatment of the Palestinians.

Israel has been conducting a vocal campaign against the labelling scheme ever since it was first proposed in 2012.

The EU already banned settlement products from granting customs exemptions that are given to goods produced within Israel's official borders, and last year decided that European funds could not be used to finance science cooperation in West Bank settlements.

"DARK MEMORIES"

On Wednesday, Israel reacted furiously, immediately summoning the EU ambassador and suspending series of dialogues on human rights and international organizations.

"We regret that the EU has chosen, for political reasons, to take such an exceptional and discriminatory step, inspired by the boycott movement," the Ministry of Foreign Affairs said in a statement.

Netanyahu said the labelling "brings back dark memories" of the Nazi-era, while on Tuesday Yuval Steinitz, Energy Minister and a senior cabinet member, said it is a "disguised anti-Semitism."

Triggering fresh tensions between Israel and the EU, the move was widely seen as rising pressure on Israel to renew the peace talks with the Palestinians.

"This will not advance peace," Netanyahu said from Washington, where he was staying on an officials visit.

In a media blitz throughout the day, he and other officials charged that the primary victims of the labelling would be the thousands of Palestinian employees who work in the settlements and might lose their jobs if settlement businesses are hurt.

But Palestinian officials welcomed the move. PLO Secretary-General Saeb Erekat called it a "significant move toward a total boycott of Israeli settlements, which are built illegally on occupied Palestinian lands," Palestinian news agency Ma'an reported.

"The EU has once again moved from the level of statements to taking concrete policy decisions," he said. "We believe that more actions are necessary to hold Israel accountable for the crimes it continues to commit against the land and people of Palestine."

SETTLEMENTS "PARALYZE" PALESTINIAN ECONOMY

"From an economic point of view, it's a non-issue," said David Simha, President of the Israeli-Palestinian Chamber of Commerce and Industry.

"The numbers are so small that it will not affect business," he said, adding though that the change of atmosphere between Israel and its principal trade and science cooperation partner "was not a good thing."

Simha noted that the new guidelines are not mandatory and estimated that some countries, which are more critical of the Israeli policy in the occupied territories, might use them more than others.

According to the Israeli Ministry of Economy, settlements goods make up less than two percent of Israel's 13 billion euros (13.95 billion U.S. dollar) to Europe each year.

However, the World Bank has estimated that in 2008, the value of European imports of goods that were entirely or partially produced in the settlements was 5.4 billion dollars.

About 15,300 Palestinians work in some 890 factories in West Bank settlements, according to the Ministry of Economy, where they are reportedly being paid a minimum wage of about 1,200 dollars per month, about twice as much as the Palestinian minimum wage.

But according to Sari Bashi, director of the Israel-Palestine office of Human Rights Watch, "the settlements and the restrictions on freedom of movement and Palestinians' access to their lands, have paralyzed the Palestinian economy and made Palestinians dependent on manual labor in the settlements."

The World Bank estimates that restrictions on movement and lack of access to agricultural lands in "Area C" alone cost the Palestinian economy more than three billion dollars each year.

The so-called "Area C" covers about 60 percent of the West Bank and is under full Israeli control.

Human Rights Watch documented numerous cases, in which Palestinian farmers could not access their fields because of security restrictions imposed due to the settlements, and their children ended up working in settlements because their families lost their source of livelihood.

In other cases, business owners could not operate their business after Israel failed to issue them licenses.

Bashi said that the "very disturbing" labor practice is often documented in the settlements, including employing children in violations of youth protection laws, under dangerous circumstances, and violations of Israeli minimum wage law.

The new guidelines came amidst a six-week-long wave of Palestinian unrest, which has seen the death of at least 78 Palestinians and 12 Israelis.

The violence started in east Jerusalem's flashpoint al-Aqsa mosque compound and swiftly spread to the West Bank, Gaza and Israel.

Israel accuses Palestinian leadership of inciting attacks against Israelis, while Palestinians say the hostilities are an unavoidable result of almost 50 years of occupation. Endit