EU labelling of Israeli settlement products – opening the door for boycott?

In November 2015, the European Union (EU) decided to make it mandatory for its member states to label some of the products produced in Israeli settlements. The decision has strained EU-Israeli relations and led to the EU’s exclusion from the Israeli-Palestinian peace process. The significance of the decision has been debated, but some argue that the EU is promoting the boycott of settlement products. What could the consequences of further boycott be?

The European Commission does not see it as a major decision, but as an interpretive notice, which should only be seen as a clarification of already existing EU legislation. As the indication of origin of products must not be misleading, the Commission notes that some products from Israeli settlements beyond the officially recognized 1967 borders have to be labelled “Israeli settlement”. The products for which it is mandatory to indicate origin are fruit, vegetables, wine, honey, olive oil, eggs, poultry organic products and cosmetics. Indication of pre-packaged foodstuffs and the majority of industrial products is, however, voluntary.

The Israeli government has reacted strongly, suspending diplomatic contacts with the EU concerning the peace process with the Palestinians. Israel claims that the decision is of a discriminatory nature, inspired by the ‘Boycott, Divestment and Sanctions’ (B.D.S.) movement, a global campaign calling for boycott of all Israeli products until Israel complies with international law. The European Commission, however, writes in the fact sheet attached to the interpretative notice that the EU does not support any form of boycott of products from Israeli settlements. They claim that the interpretive notice will only help member states to apply EU legislation and that “the indication of origin will give consumers the possibility to make an informed choice”.

Palm plantations in the Jordan Valley, part of the zone affected by the new EU direction. Photo: Trocaire – Flickr

Even though the decision in theory does not ban products from illegal Israeli settlements from the European market, it opens up for consumers to avoid these products as they can more easily make this “informed choice”. To what extent these products will be avoided is too early to tell. Origin rules that already exist in Britain, Belgium and Denmark have been reported to have a quite small impact on Israeli export. The Commission estimates that products from Israeli settlements represent less than 1% of the total Israeli export to Europe. So even though there will now be many more states labelling settlement products, further boycott from consumers would consequently not affect the EU-Israeli trade greatly. The interpretive notice might even have a positive effect on Israeli export to the EU in the long run. The boycott-minded consumers, who until now have avoided Israeli products altogether due to the uncertainty of their origin, may now consider buying Israeli products with the knowledge that they don’t come from occupied territory.

A major question is how an increase in European consumers avoiding settlement products will affect the settlement farmers and companies. The objective of the boycott is in most cases to demonstrate a lack of support for the settlements, and in the long run might even lead to settlers leaving Palestinian territory. But can further boycott from European consumers actually make this happen? For example, due to farmers diversifying into new markets in Asia and Russia, only 10-20 % of the Jordan Valley export goes to Europe. In other words, these farmers are not that dependent on the European market. And even if a consequence of the interpretive notice will be that the farmers have a harder time selling their products in Europe, there is a big chance that they will expand their market in Asia and Russia.

Still, there are examples of companies leaving the West Bank where boycott may have played a part. SodaStream, who makes soda water devices, left a settlement on occupied territory last year after a decline in growth and falling stock prices, moving into a factory on Israeli territory. The CEO of the company said boycotting had a “marginal” effect on the business, but SodaStream had been under fire in the media, and the B.D.S. movement takes credit for its withdrawal from the west bank. A consequence of the SodaStream move was that many of the 600 Palestinians employed by the company could not get Israeli work permits and lost their jobs. As there are about 25,000 Palestinians who work for Israelis in the West bank, often getting paid more than they would in Palestine, this argument is frequently used to criticise the boycotting of settlement products.

The boycott of SodaStream led to the company relocating from an occupied area. The effects of the move however still remains disputed. Photo: Mr.TinDC – Flickr.

As the EU claims to be opposed to the boycott, together with the diplomatic consequences of the interpretive notice, it seems unlikely that the EU will make further changes concerning the settlement products. However, regardless if you see the interpretive notice as a clarification of existing EU legislation or as a deliberate decision to encourage further boycott, it will make it easier for consumers to avoid settlement produce. If a remarkable number of consumers do boycott, there could be consequences that, at least in some cases, might be enough to change the situation in the occupied territories. These changes may concern both where companies choose to put their production and also the destination of their export.

Jonathan Söderlund Grosin

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