EU Decides ‘Made in Israel’ Labels not to be Used on Products Made in Palestinian Territories

The European Union (EU) now requires goods produced in illegal settlements to be labeled separately from those made in pre-1967 Israeli borders, according to new regulations announced on Wednesday. The decision came after roughly three years of deliberation and strong Israeli resistance.

The EU repeatedly denied Israeli claims that this regulation is considered a boycott of Israel. The EU already has legal requirements to label the sources of imported goods and the new regulations only implement these laws after customers requested more clarity on the sources of goods produced in settlements.

The details are laid out in an interpretative notice and fact sheet released by the European Commission (EC), explaining that the Golan Heights and the West Bank, including East Jerusalem, are not part of the Israeli territory according to international law, making the label ‘product from Israel’ for goods produced in these regions “incorrect and misleading”.

Products made in these settlements cannot be labeled “product from the West Bank,” for example, unless they are made in Palestine and not Israeli settlements. Otherwise, the labels must include something along the lines of “(Israeli) settlement.”

The decision triggered powerful backlash and fierce criticism from Israel. The EU ambassador to Israel was quickly summoned to Jerusalem and informed that many diplomatic meetings in the next few weeks were suspended.

Prime Minister Benjamin Netanyahu stated that the EU “should be ashamed” and considered its move a double standard that discriminated against Israel even though the other 200 disputed territories worldwide were not treated the same way.

The Israeli Foreign Ministry issued a statement condemning the decision and stating that it could “have implications for Israel-EU relations”. Many other Israeli officials condemned the decision, calling it anti-Semitic and comparing it to the marking of Jewish products in the Nazi era.

The regulations are only mandatory for specific types of goods and voluntary for others, affecting only a fraction of Israeli exports to Europe – its largest trading partner – and about 1% of Israel’s trade, according to the EC fact sheet.

This makes their expected economic impact relatively small but Israel’s reaction is partly meant to limit their application and future expansion. Daniel Levy, Middle East director at the European Council on Foreign Relations told the New York Times that the regulations could have “devastating” effects at worst if applied to the many Israeli companies that operate on both sides of the 1967 borders.

The Foreign Ministry also considers the decision to be politically motivated. The EU has been pushing for these guidelines since 2012 and postponed them in 2013 at the request of the United States, which was mediating peace negotiations between Israel and Palestine at the time. When negotiations fell through, pressure for labeling rose again, according to the Guardian.

In April this year, foreign ministers from 16 EU countries signed a letter to the EU’s foreign policy head, Federica Mogherini, following up on a similar letter sent to her predecessor in 2013. The letter, released by Israeli newspaper Haaretz, saw the expansion of illegal settlements in the occupied territories as a threat to the prospects of a peace agreement and emphasized that consumers should be able to know the origins of the goods they are purchasing.

The UK, Denmark and Belgium already implement their own guidelines for labeling goods produced in Israeli settlements.

The Palestinian Authority welcomed this decision and considered it the beginning of a European shift from statements to action, Haaretz reported. However, several representatives from the Boycott, Divest and Sanction (BDS) movement have considered these labels insufficient.

Rafeef Ziadah, member of the Palestinian BDS national committee’s secretariat, told the Guardian in September that the EU should have banned these products entirely if they truly considered the settlements where they were produced to be illegal.

The regulations might have negative consequences for the sizeable number of Palestinian workers employed by Israelis, as Netanyahu’s statement mentioned. Yet a union leader affiliated with the BDS movement told the New York Times that such costs were worth the gains and that supporting Palestinian workers requires the end of Israel’s “deliberate destruction of the Palestinian economy” and exploitation of its people.

Aside from the statements of individual senators, the United States has not released an official statement on the issue.