Trading Away Peace

31/10/2012 16:29 | Updated 31 December 2012

This week a coalition of 22 NGOs including Christian Aid and FIDH issued a report that was
the first to compare available export data from Israeli settlements and from Palestinians,
highlighting that the EU imports 15 times more from illegal Israeli settlements than from

These findings reveal an inconsistency at the heart of EU policy.

I have long been involved in work on the Israel-Palestine conflict both through my work
as an MP and as a trustee for Medical Aid for Palestinians and I can confidently say that
the expansionist settlement project represents one of the most significant obstacles to a
peaceful two-state solution. The NGOs signing this report are being gratifyingly strategic:
it is critical of Israeli government policy - a view shared with many Israelis - but is also a
well-informed study which exposes the way in which the EU is contributing to the economic
viability of illegal settlements

The EU states that "settlements are illegal under international law, constitute an obstacle
to peace, and threaten to make a two-state solution impossible", but continues to provide a
primary export market for settlement products. The EU spends hundreds of millions of euros
in aid each year to support Palestinian state building but then undermines this assistance by
trading with illegal settlements, thus contributing to their viability and expansion.

We need to be sure to align the rhetoric with action.

Settlement farmers and manufacturers benefit from wide-ranging Israeli government
subsidies and enjoy easy access to international markets via government-built roads that
bypass Palestinian populated areas.

In stark contrast, the Palestinian economy is severely constrained by Israeli restrictions
on access to markets and natural resources, the annual cost of which has been estimated
at EUR 5.2 billion or 85% of the total Palestinian GDP. As a result of these restrictions,
Palestinian exports have declined from over half of Palestinian GDP in the 1980s to less
than 15% of GDP in recent years, effectively negating any benefits of the EU's preferential
trade agreement with the Palestinians.

This has helped create a situation where the Palestinian Authority is dependent on large
amounts of funds from the EU and other foreign donors and is currently facing an acute
fiscal crisis.

Adding to the contradictions at the heart of EU policy towards Israel's illegal settlements, the
EU has failed to fully exclude settlements from the benefits of its cooperation programmes
and bilateral agreements with Israel. In several cases, EU public funds for research and
development have been used to directly support activities in settlements. The newly ratified
EU-Israel Agreement on Conformity Assessment and Acceptance of Industrial Products
(ACAA), is another example of EU's failure to insist on a firm distinction between Israel
proper and the illegal settlements.

European consumers have a right to know where the produce they are buying has come
from and to decide whether or not to purchase goods from settlements. This is even
enshrined in EU consumer protection law. And yet, in most EU member states, this right is
being denied and produce is labelled incorrectly as coming from 'Israel' or unclearly as from
the 'West Bank' without any distinction as to whether it is grown by Palestinians or Settlers.

Writing the introduction to the report, former EU Commissioner for External Relations, Hans
van den Broek warned that "the window of opportunity for peace between Israel and the
Palestinians is closing before our eyes. The EU now faces a fundamental challenge and
possibly last chance to translate its principled positions into effective action. If Europe wants
to preserve the two-state solution, it must act without delay and take the lead".

There is a growing awareness among European governments of the need to close the
gap between their rhetoric on settlements and their practice. The British and Danish
governments have already taken concrete steps by adopting guidelines for correct labelling
of settlement products. But there is much more that national governments and the EU can
do to ensure their policies do not directly or indirectly support settlements and the associated
injustices. This report gives them a handy checklist.