UK: Settlement Products Are Not Made in Israel'

LONDON - The British Department for Environment, Food and Rural Affairs (DEFRA) has ordered an end to Israeli goods produced in the West Bank, Gaza Strip and Golan Heights being labeled "Produce of Israel."

A letter sent out last week by David Holliday, chief horticultural marketing inspector to "all interested parties," said "advice from the Foreign and Commonwealth Office and Department of Trade and Industry is that produce from these occupied territories ought not be labeled as `Produce of Israel,' because these territories are not recognized as part of Israel."

As a solution, Holliday's letter says that "it has been agreed that in this particular case, and in order to give as much information as possible, these products should be labeled with their region of production, rather than a country of origin that may be misleading."

This is the first time the British government has issued instructions that clearly differentiate between Israel and the occupied territories, after deflecting pressure from pro-Palestinian organizations and MPs over the last year.

The letter has stunned the Israeli Embassy here. Diplomatic and financial sources here expressed their disappointment and amazement at the instructions, calling it the most prominent example of discrimination against Israel, since, to the best of their knowledge, similar orders have not been issued concerning products from other disputed areas, such as Cyprus or Kashmir.

The sources believe that labeling the product with the region of produce rather than country of origin will confuse the consumer - the exact opposite of what the order hopes to achieve.

A spokesman for DEFRA said in response that the step was "not a form of action" against Israel, and was not done out of political motivations, nor did it herald a shift in British policy.

Israel's sales of food products total around 100 million pounds sterling annually. The majority of goods produced in the territories comes from the Gush Katif bloc in the Gaza Strip and the Jordan Valley, but is a marginal amount of Israeli exports. The DEFRA decision is not expected to have any economic implications for Israel, but is mainly a symbolic and diplomatic decision.

According to figures obtained by Ha'aretz, there was actually an increase in the balance of trade between Israel and Britain in the months January-April 2002, despite the pessimistic forecasts in Israel, and a campaign to boycott Israeli goods here.

Israel is now Britain's number one trade partner in the Middle East, after falling to third place last year, behind Saudi Arabia and the United Arab Emirates.