31/10/2012 11:29 GMT | Updated 31/12/2012 05:12 GMT

Trading Away Peace

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.