It is high time the EU follow its own trade policy and ban trade of all goods and services from Israel’s illegal settlements in the West Bank
The EU’s foreign ministers will meet on July 13th to discuss reducing trade with Israel’s illegal settlements in the West Bank. The move comes long after the 2024 advisory opinion of the International Court of Justice (ICJ) that reminded countries of the obligation to “take steps to prevent trade or investment relations” that help sustain the illegal settlements.
Trade with the EU is a critical contribution to the economic viability of these settlements. Although small when compared with overall trade with Israel, the bloc is the largest export market for the type of agriculture products typically produced in the settlements. The EU accounts for 63% of Israeli exports of fruits and vegetables and it is reasonable to assume that a similar share would apply to exports from the settlements.
The EU condemns Israel’s illegal occupation of Palestine and has refused to apply its association agreement with Israel to trade with the settlements. But this policy is not enough. Currently the bloc applies a so-called “differentiation policy” under which products from the settlements are identified through a postal code and should pay the full tariff when entering the EU. However, this policy has not done much to limit trade with the settlements partly because the full tariffs are often low and enforcement is weak. But even if enforcement was reinforced, trade with the settlements would continue to thrive since Israel compensates exporters of settlement products for their EU tariff payments. The EU’s current policy is therefore insufficient to comply with the ICJ.
Several member states are in the advanced stages of adopting the legislation to ban trade with settlements, and some already have. Most of these also include bans on services. National bans are, however, of limited effectiveness because of the free circulation of goods within the EU. Instead, the EU needs to rapidly adopt a bloc-wide ban covering both goods and services. This move would not be a sanction on Israel but rather a measure to ensure the consistency of EU trade policy with international law, as required by the EU’s foundational treaties.
The EU has long adopted trade policy measures whose primary objective is not economic but rather designed to contribute to the protection of human rights. Examples include import restrictions on conflict minerals or goods used for torture or more recently the ban on products of forced labour. The EU has suspended trade preferences for human rights or labour rights abuses with countries such as Cambodia or Sri Lanka and has placed others such as Myanmar or Kyrgyzstan under close watch. These are not foreign policy measures but simply a strict implementation of the EU’s own trade policy; and the same is true for banning EU trade with Israel’s illegal settlements.
The ruling of the ICJ and Israel’s continuous expansion of its illegal settlements in Palestine calls for a unified EU response. There is a compelling case and precedent for the EU to use its trade policy powers. Immediately following the debate by foreign ministers, the European Commission should come forward with a proposal for a well-calibrated EU ban. It is high time the EU followed its own rules regarding trade with Israeli settlements. Anything less goes against the bloc’s own founding principles.
This commentary was co-authored by Sigmar Gabriel (former vice-chancellor of Germany), Arancha González Laya (former foreign minister of Spain and ECFR council member), Pascal Lamy (former EU trade commissioner and director-general of the World Trade Organization and ECFR council member), Enrico Letta (former prime minister of Italy and ECFR council member) and Cecilia Malmström (former EU trade commissioner and ECFR council member).
The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.