Marín seeks support over Israel

Date: 25/06/1998

By Mark Turner

EXTERNAL Relations Commissioner Manuel Marín is hoping his tough stand against alleged irregularities in Israeli-EU trade will gain heavyweight political support when Union foreign ministers meet next week.

But European Commission officials stress that they intend to fulfil their treaty obligations with or without member state endorsement of the institution's critical report last month on the alleged misapplication of Israeli trade benefits.

The Commission said then that it would “take steps to verify the accuracy” of claims that goods were being illegally exported to the EU from East Jerusalem, the West Bank and the Gaza Strip under a 'made in Israel' label. “Should these violations of the protocol on rules of origin be confirmed, they should be ended,” it said, calling for similar rules for all Mediterranean countries.

Origin or 'cumulation' rules determine where a product comes from and, by implication, which tariffs and quotas apply to it. Under the current EU-Israel interim agreement, goods which are “wholly obtained in Israel” or have undergone a large degree of working or processing in the country are granted near duty-free access. Goods which are substantially manufactured elsewhere but use Israel as a transit stop, however, must pay the duties applying to their country of origin.

In most cases this is not a source of controversy. Brazilian orange juice shipped via Israel is unquestionably non-Israeli, and Jerusalem has undertaken to stop it being transported under fraudulent labels.

But in its report, the Commission excluded products from East Jerusalem, the Golan Heights and Israeli settlements which the United Nations Security Council says do not belong to the state of Israel despite Jerusalem's insistence that they do.

The Commission also ruled out products from the West Bank and Gaza. Although this is technically indisputable, as both are controlled by the Palestinian Authority, enforcing the rules strictly could have the perverse effect of hitting Palestinian exporters already suffering from severe trade obstacles.

Although Commission officials insist the Palestinians themselves are calling for the move in an attempt to break Israel's stranglehold over their economy, some EU governments are wary of the adverse publicity it could bring.

In the wake of Israel's decision this week to expand Jerusalem's borders, and floundering efforts to put the Middle East peace process back on track, any decision could be highly contentious.

Israeli Premier Benjamin Netanyahu vehemently condemned the Commission's paper last month, and is likely to attack any formal EU endorsement of its contents.

However, Israeli and Commission officials say back-room talks have been surprisingly constructive. “After the initial wave of propaganda, there has been an almost unprecedented change in attitude and overwhelming cooperation by Israeli authorities,” said a Commission official.

“Nevertheless, none of this has yet had any concrete effect. Even following our agreement on orange juice imports, Israel has done too little, too late. There has been only partial compliance.”