European Union rules requiring that goods made in Israeli-occupied Palestinian territories be labeled with the word "settlement" are anti-Semitic, politically-motivated and may further stall peace talks with the Palestinians, Israel's government has claimed. Palestinian officials and workers' rights group said they supported the EU's move, even though the rules may cost some Palestinian jobs in Israeli businesses.
The new guidelines, officially approved by the EU on Wednesday afternoon, are the culmination of three years of debate and planning by the European Commission and mean that all farm and cosmetic products made by Israeli businesses on occupied territories — including the West Bank, East Jerusalem and the Golan Heights — must now be marked with the word "settlement," or its equivalent.
Among the industries that will be affected are cosmetics from the Dead Sea, Golan wineries and more than 1,000 businesses in the West Bank. In the Palestinian territories, goods produced by non-Israeli companies will be marked "product of Palestine" to distinguish them from goods made in settlements.
Palestinian officials welcomed the move as "significant" but called for a more expansive action from the international community.
"The EU has once again moved from the level of statements to taking concrete policy decisions," said Saeb Erekat, secretary general of the Palestine Liberation Organization's executive committee. "[But] we believe that more actions are necessary to hold Israel accountable for the crimes it continues to commit against the land and people of Palestine."
Israel's Foreign Ministry called the decision "political" and "irritating."
"The EU chooses to apply a double standard concerning Israel, while ignoring that there are over 200 other territorial disputes worldwide," it said in a statement issued on Wednesday afternoon.
"This is a technical measure, not a political one," one European Commission source who declined to be named said on Tuesday prior to the official announcement of the guidelines. "The occupied territory is not part of the sovereign state of Israel, so goods cannot be sold as 'Made in Israel."
The foreign ministry's views were echoed by the Israel's Prime Minister Benjamin Netanyahu who said that by applying labeling rules to Israeli settlements, the European Union "labels the side that is attacked in acts of terror" and that the EU "should be ashamed."
"The Israeli economy is strong and will withstand this, those who will suffer will be the Palestinians who are employed in Israeli factories," added Netanyahu.
A Palestinian workers' rights group said that while the new rules may cost jobs, they backed the move on political grounds.
"Palestinian workers do not need to be told that a growing boycott of Israel could hurt us financially," said Mohammed Al-Arqawi, deputy general secretary of the General Union of Palestine Workers. "We are well aware of this and call for a boycott because we believe that economic and political pressure is needed to challenge Israel's ability to deny us our basic rights."
According to Israel's Economy Ministry, the EU guidelines are expected to affect a number of products — including olive oil, dates, honey, wine, grapes and poultry — and will cost settlement-based businesses around $50 million a year; equivalent to one-fifth of the $200-300 million worth of goods produced in Israeli occupied territories annually.
David Simha, president of the Israeli-Palestinian Chamber of Commerce and Industry, said the goods to be labeled make up ".1 percent of total exports" from Israel. Israel exports more than $30 billion in services and goods to the EU each year.
But the businessman warned that the labeling would play into the rhetoric of right-wing Israeli politicians.
"It's taking everything in the wrong direction," he added.
Human Rights groups applauded the EU's labeling decision.
"The EU's new guidelines on accurately labeling settlement products are in line with states' duty to ensure compliance with international humanitarian law, under which settlements are illegal," said Sarah Saadoun, who researches settlements at Human Rights Watch. "Other states should follow the EU's example."
Israel has long said it sees the EU move to label goods from settlements as akin to the BDS movement, which advocates a wholesale ban on Israeli goods, services and culture as a means to pressure Israel to end the occupation of West Bank and East Jerusalem and recognize a Palestinian state.
"Jews are being stabbed in the streets and the EU has given in to BDS [Boycott, Divestment, Sanctions]" Yair Lapid, head of centrist opposition party Yesh Atid, tweeted on Wednesday afternoon. "This decision discriminates against Israel and encourages terrorism."
The EU, however, says that the labels simply aim to distinguish between products made within and outside the internationally recognized borders of Israel.
"It's an indication of origin, not a warning label," EU Ambassador to Israel, Lars Faaborg-Andersen said of the decision.
Israel summoned Faaborg-Andersen to the Foreign Ministry in Jerusalem after the labeling rule was approved and warned that the EU may no longer be welcomed as a broker in peace negotiations, which have remained stalled as Israel continues to build settlements in the West Bank and in East Jerusalem.
"We made it very clear that EU contributions to the peace process, [but] this might force us to reconsider that," his counterpart, David Walzer Israeli ambassador to the EU, said following the formal announcement of the guidelines.
Several European countries, including Britain, Belgium, and Denmark have already introduced national guidelines that mark goods produced in settlements. However, the new EU guidelines mean that all of the bloc's 28 member states will now carry labels. If settlement producers do not apply the correct label to their product the new EU rules require the business to be sanctioned, but individual countries can determine their own punishments for violations.
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