"The 'Made in Israel' label is not as simple as it seems"
Ha'aretz Newspaper, September 24 2000
http://www.fiz.huji.ac.il/~damita/sito_pol/ISR_PAL/Amira_Hass24_9.htm
Israel exports products manufactured in the settlements but
labeled as Israeli products, thus illegally benefiting from
a trade agreement with the European Union.
By Amira Hass
Any moment now, a letter from the Belgian Finance Ministry
should be landing on the desk of the European Union Commission
in Brussels. The commission has been aware of the contents
of the dawdling letter for weeks or even months now. It is
"like a hot potato," according to one commission
source. Commission officials fear the moment this hot potato
lands in their lap and are still pretending that it does not
exist.The letter is supposed to inform the commission that
according to information received by Belgian customs authorities,
there is firm proof that Israel is violating its trade agreement
with the EU, giving its goods preferential status in European
markets.
The commission is responsible for the satisfactory implementation
of agreements signed by the EU and the violations could invite
a partial or complete suspension of the agreement. An official
letter of this kind obligates the commission to take immediate
steps to clarify the situation with Israel.
In an embarrassing turn of events over a year ago, a Belgian
customs official performed a rather ordinary technical action,
asking the Israeli customs authorities to send him post-verification
of a certificate of origin for cosmetics products made by
the Israeli Ahava company. According to the certificate of
origin in his possession, Ahava's products are manufactured
in the State of Israel. To the best of that anonymous clerk's
knowledge, there are clear boundaries to the State of Israel
and the preferential terms are granted only to products made
within them. But he also received a bundle of documents and
photographs that proved that the Ahava products are manufactured
beyond these borders. He thus asked an Israeli colleague to
re-verify the origin of the goods. The answer came a few months
later: Ahava products are manufactured in the State of Israel.
The obedient clerk brought the contradiction to the attention
of his superiors at the political level and the information
was leaked to the Belgian Parliament. Someone submitted an
oral parliamentary question on July 1 and the course of events
became known to all, including Belgian non-governmental organizations
and members of the European Parliament, who pressured the
political ranks to act in accordance with its declared position.
The pressure, however, had begun much earlier. In early March
of this year, 47 members of the European Parliament from different
parties submitted an oral question to the commission with
regard to the "irregular application" of the EC-Israel
trade agreements.
They defined the problem in the question: "Consistent
with the obligations of the member states under international
law, all EC trade agreements with Israel have limited their
scope of territorial applicability, on the part of Israel,
to the 'territory of the State of Israel,' excluding the occupied
territories, and, therefore, Israeli settlements."
This determination follows from Paragraph 83 of the trade
agreement - the association agreement between Israel and the
EU that was signed in 1995 and came into permanent effect
on July 1, 2000; and Paragraph 49 of the Geneva Convention,
to which all EU member countries are signatories. This paragraph
prohibits any occupying country from transferring or exiling
part of its civilian population into the area that it occupies.
This was not only the interpretation of the European MPs
who submitted the question, led by veteran left-wing activist
Louisa Morgantini of Italy. It is also the official interpretation
of the commission, as shown by a communication drafted in
May 1998: "Preferential access to Community markets for
exports originating in Israeli settlements in the West Bank
and Gaza Strip and those from East Jerusalem and the Golan
Heights contravene agreed rules of origin because under public
international law, these territories do not form part of the
State of Israel."
The communication also declared: "There are indications
that these exports are taking place. The European Community
will take steps to verify the accuracy of this information
according to the procedures that have been agreed upon with
Israel ... Should it be confirmed, such violations of the
rules should be brought to an end."
In 1995, ratification of the trade agreement between Israel
and the EU was imminent. It was formulated in parallel with
the Oslo talks and was evident of European satisfaction with
the policies of the Labor government and the expectation that
an end to the Israeli-Palestinian conflict was in sight.
But Mattin, a small Ramallah-based policy research and advocacy
partnership, which focuses on Palestinian economics and human
rights, began to nag the European Commission and a few EU
member countries, reminding them about the settlements and
their goods. The trade agreement was not ratified, as required,
by all 15 member states: France and Belgium refused to do
so. The preferential trade relations between the two parties
were, therefore, grounded in an interim agreement. The association
agreement was finally ratified on June 1 of this year, following
the establishment of Prime Minister Ehud Barak's government
and after France and Belgium had signed it.
It is no coincidence that the communication of the EU was
composed and distributed in 1998, during the term of former
prime minister Benjamin Netanyahu. European governments believed
Netanyahu's policies were in contradiction to the Oslo process
and thus permitted themselves to carry out a series of checks
and declarations to express their dissatisfaction. It is also
no coincidence that in January 1998, the Dutch Ministry of
Development Cooperation hired Mattin to investigate and gather
evidence on the source of various Israeli products. Some observers
also say that transparency issues came to the fore in the
wake of the corruption cases at the top echelon of the European
Commission.
Questions were asked in the European Parliament, and in September
1998, a special European delegation was sent to Israel and
the Palestinian Authority to assess the trade and customs
procedures between Israel, the West Bank, the Gaza Strip and
members of the European Union. In its report, the delegation
concluded that the rules of origin were not honored. In other
words: Israel was exporting products that were not manufactured
within its borders.
Beginning in early 1999, Mattin began providing findings
and evidence regarding the source of various goods, all or
some of which where manufactured beyond Israel's pre-1967
borders. The European customs authorities also came into possession
of a list of products - released by the Gush Shalom peace
movement - manufactured beyond the pre-1967 borders. Gush
Shalom supported a boycott of these products.
This was apparently the stage at which the Belgian clerk
displayed personal initiative. In his determination, he beat
dozens of customs officials from other EU countries to the
punch by at least a full year. It turns out that from June
this year, the Israeli customs authorities received about
300 similar letters - primarily from England, Holland and
France - requesting verification of the certificates of origin
of a list of products, all of which were produced beyond the
pre-1967 borders.
Give Barak a chance
Since May 1999, however, when the Barak government came into
power, the nagging from within and without no longer matched
the line taken by Europe's political echelon. By January 2000,
the European Commission gave the following response to Morgantini's
question on the examination of product origins: "At this
stage, it has not been possible to determine with certitude
the origin of the products concerned. We are at a very delicate
stage in the peace process, which must not be endangered by
positions that would result from blindly applying legal rules."
Representatives of the Foreign Ministry would gladly have
signed such a statement. Victor Harel, deputy director-general
of economic affairs at the Foreign Ministry, sums up what
he and Foreign Minister Shlomo Ben-Ami tell their colleagues
in Europe and in the commission: "For years, the European
Union did not care the slightest bit about products from the
settlements, in the understanding that it is a gray area,
unique and special. Why the rush now, when we are at the height
of negotiations with the Palestinians? At Camp David there
was Palestinian recognition of a few settlement blocs. Determining
the borders is an issue between us and the Palestinians, so
why be so strict all of a sudden?"
It is not a matter of a ruse or falsification, Harel emphasizes:
"Israel does not conceal the locations in which these
products are made."
Last March, the Israeli delegation to the EU proposed setting
up an informal, three-way committee, in conjunction with the
Palestinians, which would discuss the question of the settlements.
In exchange for Palestinian and European recognition of products
from the settlements as Israeli products, Israel would recognize
a separate trade agreement to be signed between the EU and
the Palestinians. Such recognition is important: the Palestinians,
as well as a few sources in the commission, argue that non-recognition
leads to innumerable Israeli restrictions and harassments
that delay the growth of independent Palestinian trade.
Harel says this is a serious overstatement.
In any event, the commission informed European Parliament
members that in January 2000, the Palestinian leadership expressed
willingness to participate in this tripartite committee. But
the rejoicing turned out to be premature, because in March
2000, Dr. Nabil Sha'ath, Minister of Planning and Internal
Cooperation in the PA, sent a correction to the commission's
announcement.
"The Palestinian side will not entertain any discussion
of matters concerning products from the settlements or legitimizing
their importation into the EC under preferences. The Palestinian
National Council and the PLO cannot and will not be party
to any arrangement that would contravene the principles of
international law."
Harel expresses regret over this position. He believes that
all these difficulties are hindering economic cooperation
between Israelis and Palestinians: An Israeli investor who
exports goods to Europe would hesitate to launch a joint venture
with a Palestinian; Israeli factory owners beyond the pre-1967
borders could decide, in response, to dismiss their Palestinian
employees.
The trade agreements grant a ten-month grace period to respond
to requests for post-verification of certificate of origin.
Harel does not hide Israel's intention of taking full advantage
of this period in the hope and assumption that a permanent
agreement with the Palestinians will be signed by then. According
to a European source, the EU political echelon is counting
on the ten-months period just as much as Harel.
Nevertheless, one diligent Belgian clerk did get the jump
on all the rest. The responses that he has already received,
as well as his findings, obligate Belgium's diplomatic echelon
to take action to avoid being found guilty of violating the
Geneva Convention (which also prohibits states from profiting
from illegal activities such as transferring populations to
the occupied territory of another country).
EC officials assume that Belgium will prefer not to wrestle
with the contradiction between its obligation to international
law and the trade agreement and its support for the Barak
government. The officials expect Belgium to make an official
report. Until then, in the face of stated and unstated intentions
by a few elements in the EU to sweep the problem under the
carpet, members of the European Parliament, non-governmental
organizations and Mattin will continue to nag
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