The European Union’s decision this week to require produce from West Bank settlements and the Golan Heights to be labeled as such isn’t likely to have a direct impact on Israeli exports, but some sources said they were worried the new rules could harm sales of all Israeli products.
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Ohad Cohen, who heads the foreign trade administration in the Economy Ministry, said only about $50 million in annual exports from the West Bank, including East Jerusalem, and from the Golan would likely be affected. That compares to total exports from these areas of $150 million to $200 million a year.
Total Israeli merchandise exports to the 28-member European Union were about $15 billion last year, so the labeling will affect just 0.3% of trade. But Meir Tzur, chairman of the Israel Farmers Federation, said he was concerned that products designated “Made in Israel” could end up being affected, too.
“The fear is that the European consumer is no expert on geography and that he won’t be able to distinguish between products from the territories and those from inside the Green Line, so all Israeli agricultural exports could end up being hurt,” he said.
The EU move comes amid heightened concern about the impact of the global boycott, divestment and sanctions, or BDS, movement. Although the movement has little to show for it in hurting Israeli exports, the labeling requirement will make it easier for consumers who want to avoid buying products from the settlements.
“Product labeling will strengthen the radical elements advocating a boycott against Israel and denying Israel’s right to exist, contradicting positions the EU publicly opposes,” Israel’s Foreign Ministry said on Wednesday.
Sources said the biggest exporters likely to be affected by the labeling rules are the Golan wineries, notably the internationally renowned Golan Heights Winery, growers in the Jordan Valley and Ahava Dead Sea Laboratories cosmetics.
Growers will feel the brunt of the guidelines, which were published on Wednesday and apply to fresh fruit and vegetables, honey, olive oil, eggs, poultry and organic products. They also apply to cosmetics, but not packaged foods and non-cosmetic manufactured good.
“A lot of products aren’t required to be labeled, like electronic components and raw materials that go inside other products,” noted Cohen.
In addition, the Foreign Ministry estimated that 30,000 Palestinians employed in the West Bank by growers and others affected were at risk of losing their jobs.
While there is no EU official wording about how settlement products must be labeled, the EU said in a five-page circular issued Wednesday that they must carry the word “settlement” on the tag when sold in European shops.
“An indication limited to ‘product from the Golan Heights’ or ‘product from the West Bank’ would not be acceptable. Even if they would designate the wider area or territory from which the product originates, the omission of the additional geographical information that the product comes from Israeli settlements would mislead the consumer as to the true origin of the product.
“In such cases the expression ‘Israeli settlement’ or equivalent needs to be added, in brackets, for example,” the document said, suggesting wording such as “Product from the Golan Heights (Israeli settlement)” or “Product from the West Bank (Israeli settlement).”
If an Israeli grower refuses, a retail outlet can attach the label itself, as the European Commission has sufficient information about where goods come from.
Tzur’s concern were echoed by Zvi Alon, managing director of Israel’s Plants Production and Marketing Board.
“Fruit and vegetable exports to the EU amount to more than half a million tons a year, which is worth 600 million to 700 million shekels. Exports from Judea, Samaria and the Golan are relatively small and the impact will be marginal,” he said, urging the government to take step to promote exports to insure against the fallout.
In all events, the fallout from the labeling rules is likely to be small. The EU isn’t banning any products and t hree EU members — Britain, Belgium and Denmark— already require labeling that differentiates between products from Israel proper and those from the West Bank.
The difference now is that all 28 EU member states will have to enforce similar labeling. Penalties for violators will be up to the member states, although the EU said they had to be “proportionate.”
The EU says it is not telling consumers what not to buy. Those who do not want to buy Israeli settlement goods probably already avoid them, and those that support the settlements may now more actively seek out settlement produce.