This is about territories that Israel occupied after 1967 war, not about the British Mandate. The EU and Israel signed an upgraded free trade agreement in 1995 covering the exports of goods produced in the territories of the two parties. The West Bank (and Gaza) are NOT part of the territory of the State of Israel, however you want to twist and turn it. So, of course different trade rules apply.
ISIS group seizes villages north of Aleppo city (AP)
from the article: EU court: No customs breaks for Israeli goods from settlements