Irksome EU labeling of settler goods could snowball into BDS avalanche
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Irksome EU labeling of settler goods could snowball into BDS avalanche

Just 0.7% of exports to the EU come from settlements, but as Israel grapples with new boycott pressures, labeling of these products could become the next big blow

Raphael Ahren is the diplomatic correspondent at The Times of Israel.

In this Thursday, Jan. 9, 2014 photo, a Thai worker sits in a back of a truck loaded with flowers in the fields of the West Bank Jordan Valley Jewish settlement of Petsael. (AP/Oded Balilty)
In this Thursday, Jan. 9, 2014 photo, a Thai worker sits in a back of a truck loaded with flowers in the fields of the West Bank Jordan Valley Jewish settlement of Petsael. (AP/Oded Balilty)

In April, 16 European Union foreign ministers called for the implementation of a labeling regime for settlement goods, spurring then-foreign minister Avigdor Liberman to compare them to Nazis.

“They can … label all products from Judea, Samaria and the Golan Heights with a yellow star,” he said using the Biblical terms for the West Bank.

MK Yair Lapid phoned EU foreign policy chief Federica Mogherini to complain about the foreign ministers’ demand, terming it a “stain on the EU.” The demand for labeling of settlements is a call for a “de facto boycott of Israel,” Lapid lamented, adding that this “dangerous process” could “bring disaster to the Israeli economy.”

As a former finance minister, Lapid likely knew he was exaggerating the move’s immediate, short-term impact on the nation’s economy. But he also plainly recognized that the introduction of a labeling regime for Israeli products from areas the EU considers illegally occupied has the potential to seriously hurt the State of Israel in the long run. Indeed, it could bolster the international sense of Israel as a pariah state, some experts warn, and trigger an avalanche that would end in a global boycott of Israeli products.

In this Tuesday, February 11, 2014 photo, Israeli workers inspect barrels in a winery in the West Bank settlement of Psagot. (photo credit: AP/Dan Balilty)
In this Tuesday, February 11, 2014 photo, Israeli workers inspect barrels in a winery in the West Bank settlement of Psagot. (photo credit: AP/Dan Balilty)

Efforts to boycott Israel have been steadily gaining strength for years but are currently dominating the national agenda as never before, with senior politicians and activists elevating the imperative to fight against the so-called BDS (Boycott, Divestment and Sanctions) movement to top priority.

This week, Israelis talked about little else. Last Friday, the Palestinians attempted to boot Israel out of world soccer, before abandoning the bid at the eleventh hour. On Tuesday, the UK’s National Union of Students formally endorsed BDS. On Wednesday, the CEO of mobile communications giant Orange said he would love to pull out of the Israeli market. On Thursday, the French company officially announced that it will cut ties with its Israeli subsidiary Partner.

While this onslaught of anti-Israel activity is part of a long-term pattern, the threat has never felt more tangible. The prospect of Israel being kicked out of FIFA rattled Israelis more than any damning United Nations report or union boycott had done. And the Orange squash then exacerbated the sense of siege.

The EU’s labeling plan, however, is a threat of a whole different order, a case of democratic governments gearing up to target the settlement enterprise and its relatively minor exports, but with potential repercussions for the entire Israeli economy — and for Israel’s perceived legitimacy. And many insiders believe that, sooner or later, the EU will indeed go ahead with the labeling regime.

The poet Erez Biton, who won this year’s Israel Prize for literature, in his acceptance speech called on Israeli society to unite around the rejection of the EU’s scheme. “Those who label products today are liable to label people tomorrow,” he predicted ominously.

The European Union's new foreign affairs chief Federica Mogherini listens to Israeli Foreign Minister Avigdor Liberman during a press conference in Jerusalem, November 7, 2014. (photo credit: AFP/Thomas Coex)
The European Union’s foreign affairs chief Federica Mogherini listens to Foreign Minister Avigdor Liberman in Jerusalem, November 7, 2014. (AFP/Thomas Coex)

If labeling is introduced, the immediate financial blow to the nation’s economy may turn out to be marginal. It is unclear just how many European consumers care enough about the occupation to avoid products from the West Bank. Perhaps very few would turn down delicious and cheap dates, for example, based on their origin. And those who do take a conscious decision to avoid Israeli products from the settlements likely wouldn’t be waiting for the EU to place labels on them.

Furthermore, while pro-Palestinian activists would delightedly highlight the labeling, it would also mobilize supporters of Jewish settlements. These could include European Jewish communities or non-Jewish consumers who want to strengthen Israel because they believe it stands on the frontline of the West’s battle against radical Islam.

So much for immediate, direct impact. But that’s not the full story.

In 2014, EU imported NIS 60b. from Israel proper

Exports from Jewish settlements — which consist mostly of agricultural products since there are no major technological companies — are minuscule compared to those from Israel proper.

According to the most recent available statistics from the Israel Manufacturers Association (from 2012), exports from the West Bank, East Jerusalem and the Golan Heights amount to $100 million a year. That is about 0.7 percent of the approximately $14 billion the EU annually imports from within the Green Line (in 2014, it was exactly €13,070,556,887; or about NIS 57 billion).

There are 14 industrial zones with 800 factories and agricultural facilities in the West Bank, according to Yigal Dilmoni, a spokesman for the Yesha Council of Jewish settlements.

If these companies were to lose money due to labeling or a boycott, the 15,000 Palestinian workers they employ, who earn more than twice as much working for Jews as they would in the Palestinian Authority, would also be among those hurt, Dilmoni said. In that sense, he argued, labeling will not contribute to solving the Israeli-Palestinian conflict but rather destroy one area in which peaceful coexistence currently exists.

“I don’t know how the world would react to the labeling,” Dilmoni said. “Yes, it could cause us some losses, but we will overcome it.”

Singling out products made by Jews in the West Bank while ignoring other conflict regions, Dilmoni charged, “is a new kind of anti-Semitism. Whoever does such a thing doesn’t really care to solve the conflict, but will only make it worse.”

The Europeans evidently beg to differ. Last month, Mogherini told the EU foreign ministers that the details of the scheme would be “finalized in the near future.” She reiterated that message during her visit to Israel last month, an EU source in Israel said.

Protest against Israeli products at a British Tesco supermarket, July 2014. (screen capture: YouTube/Kashif Raza)
Protest against Israeli products at a British Tesco supermarket, July 2014. (screen capture: YouTube/Kashif Raza)

It is not precisely clear what the EU has in mind when it talks about promoting a labeling regime, but some of its parameters can be gauged.

The European Commission will publish “an interpretative note that is not legally binding,” a reliable EU source told The Times of Israel Thursday. In other words, European vendors will be allowed to choose whether to attach special labels to West Bank products or leave them as they are, marked as “Made in Israel.” Voluntary or not, it may be assumed that many, if not all, member states will adopt the commission’s recommendation; they might consider it “morally binding.”

What exactly would the labels for settlement goods say? Again, this is not clear. “Made by Israeli settlers in Occupied Palestinian Territory” would probably deter more European consumers than a simple “West Bank: Israeli goods.” But there are pointers: Alongside Belgium and Denmark, the UK has already implemented voluntary guidelines on labeling. In some British supermarkets, there are already labels on products that read “Produce of the West Bank (Israeli settlement produce).”

Britain’s Department for Environment, Food and Rural Affairs already states on its website that it “considers that traders would be misleading consumers, and would therefore almost be certainly committing an offence, if they were to declare produce from the OPT [Occupied Palestinian Territory] (including from the West Bank) as ‘Produce of Israel’.”

In 2012, the South African government instructed retailers to label settlement products as coming from the “Occupied Palestinian Territory (OPT).” After a protest from the Jewish community, the text to be used on labels was changed to “West Bank: Israeli goods” or “East Jerusalem: Israeli goods.” Jewish leaders celebrated their victory, hailing the new terms as “essentially neutral and descriptive,” but official Jerusalem was unhappy. Labeling as such is discriminatory, no matter how it is done, the Foreign Ministry complained at the time.

‘This is the first step, but there will be others’

The Europeans explain their desire to label West Bank settlement products as a way to support the “preservation of the two-state solution” and to ensure that “consumers are not being misled by false information.” The EU recognizes the State of Israel only inside its pre-1967 lines; therefore, officials argue, it would violate its consumer protection laws to label West Bank goods as “Made in Israel.”

If the immediate financial impact of the EU’s scheme might be negligible, many Israelis fear it could snowball: labeling of West Bank goods could lead to an import ban on those products, which could develop into a full-blown boycott of all Israeli products.

“This is the first step, but there will be others. This will lead to a boycott,” predicted Seev Hirsch, professor emeritus of international business at Tel Aviv University. The struggle against apartheid South Africa started with a boycott and eventually led to the downfall of the racist regime, he noted.

The EU “won’t take too long before it’ll start taking other steps,” he warned. “As an economic issue it’s a probably meaningless. But I don’t see it as an economic issue — it’s a political issue.”

The average European cannot be expected to distinguish between goods from Israel proper and the goods from settlements, and so might simply avoid them all

The immediate losses would be limited, agreed Mikhael Manekin, managing director of the left-leaning think tank Molad. But the insistence on the labeling issue underlines Europe’s preoccupation with what it considers Israel’s illegitimate occupation of Palestinians lands, and that ultimately negatively impacts Israel’s entire economy, he said.

In 2008, the EU and Israel planned to upgrade ties but the process foundered over European objections to Israel’s actions in the West Bank, he recalled. “As long as the EU’s focus is on Israel’s behavior behind the Green Line, we’re stuck in a position that’s not beneficial to Israeli interests,” Manekin said.

As soon as European consumers understand that West Bank products are singled out and thus seen as problematic, “it’s not about the settlements anymore,” Manekin said. The average European cannot be expected to distinguish between goods from Israel proper and the goods from settlements, and so might simply avoid them all. As time goes by, more and more consumers and industrialists will want to avoid the technical and moral headaches that are Israeli products, he said.

Manekin argued that EU labeling “has nothing to do with BDS or with radical anti-Israel sentiment,” is not anti-Semitic, and is not part of an effort to delegitimize Israel: “If settlement labeling teaches us anything, it is that there is an overwhelming consensus in the world that Israel’s control of the West Bank is illegitimate, he said. “It’s a measure against Israel’s presence in the West Bank.”

True or not, the spiraling concern in Israel is that labeling would have an increasingly resonant impact, and would emphatically bolster those who do seek to delegitimize Israel.

The Ahava factory in the West Bank settlement of Mitzpeh Shalem (photo credit: Flash90)
The Ahava factory in the West Bank settlement of Mitzpeh Shalem (photo credit: Flash90)

Social scientist Eithan Orkibi elaborated that Europeans care greatly about “fair trade,” and said that labels on settlement products are likely to place such products, in the minds of consumers, in the same category as cosmetic goods tested on animals or sneakers produced by children in Asian sweatshops. A lecturer at Ariel University, which is located in the heart of the West Bank and thus subject to special treatment from the EU, Orkibi has done extensive research into the psychology of the BDS movement.

“It is easy to create the impression that if you buy this or that product you cooperate with an evil empire,” he said. It doesn’t take much to convince consumers that they are making the world a better place by avoiding wine from the West Bank. “They’re getting a positive psychological reward,” he said.

Protesting occupation and supporting national liberation movements through nonviolent acts of resistance is about to become “a great cultural trend” in Europe, Orkibi predicted. In Israel, many young hipsters are turning to veganism, he said, while among young Europeans “it’s almost a trend to boycott Israel or settlement products.”

And the young Europeans of today, he noted, “form the core of Europe’s future elite.”

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