AN EU DECISION to label goods from Jewish settlements is unlikely to damage Israel’s economy, but officials in the country fear that what they call the “anti-Semitic” move will encourage a boycott campaign against the country.

Israel harshly condemned the decision, with Prime Minister Benjamin Netanyahu comparing it to Nazi-era practices and saying the EU “should be ashamed.”

PM of Israel PM of Israel

“The labelling of products of the Jewish state by the European Union brings back dark memories,” the premier said as he wrapped up a visit to Washington.

Justice Minister Ayelet Shaked, from the right-wing Jewish Home party and known for provocative statements, called the move “anti-Israeli and anti-Jewish,” adding that “European hypocrisy and hate against Israel have surpassed all limits.”

In anticipation of the move on Tuesday, Energy Minister Yuval Steinitz called it “disguised anti-Semitism”. The foreign ministry summoned the EU envoy to the country.

The EU has insisted it was only clarifying existing rules on the place of origin for goods that will go on sale in the 28-nation bloc, adding that it had nothing to do with a boycott, which it says it does not support.

Wine bottles manufactured in a Jewish settlement in the West Bank on display at a supermarket in Jerusalem. Ariel Schalit / AP/PA Ariel Schalit / AP/PA / AP/PA

It amounts to a set of guidelines for labelling products from settlements in the Palestinian territories and annexed east Jerusalem as well as the Golan Heights, all occupied by Israel in the 1967 Six-Day War.

The settlements, deemed illegal under international law, are one of the main stumbling block to peace efforts, as those in the West Bank and east Jerusalem are built on land Palestinians see as part of a future state.

The Palestine Liberation Organisation said the EU decision was a positive step but that it did not go far enough, calling for a ban on such commerce.

Limited economic effect 

It is not the impact on trade that has alarmed Israel, experts say, though the European Union is Israel’s largest trade partner.

The goods in question account for only two to three percent of Israeli exports to the European Union, according to Israel’s ambassador to the EU, David Walzer.

He estimates their value at €187 million per year.

“In fact, it involves only the agricultural products, the wine, the cosmetic products which require an origin label,” said Ohad Cohen, head of external commerce at Israel’s economy ministry.

“Labelling will at most involve $50 million in exports.”

Dan Balilty / AP/PA Dan Balilty / AP/PA / AP/PA

Most manufacturing exports from the settlements involve components or parts later assembled into finished products, making them difficult to trace.

Settlements also export farm goods, including dates, fruit and vegetables, along with wine from the Golan and cosmetics from the Dead Sea.

If required, Israel seems capable of finding new markets.

Dan Catarivas, head of international relations at the Manufacturers Association of Israel, said it was unfortunate that politicians were equating labelling with a boycott.

“We have to distinguish between the labelling that is imposed on us by the European Union and a boycott, which is completely unacceptable,” he said.

Memories of SodaStream 

Israel has been the target of a global boycott campaign aimed at ending its occupation, known as BDS (Boycott, Divestment and Sanctions).

According to an Israeli parliamentary report, the campaign has not so far had a noticeable impact. Over the past nine years, exports have risen from $7.8 billion to $15.6 billion.

Associated Press Associated Press

But officials are unnerved by any bid to mount a campaign that they see as attempting to delegitimize the Jewish state.

They saw SodaStream, which manufactures a device for making fizzy drinks at home, become embroiled in boycott calls and close a factory in a West Bank settlement and relocate to Israel.

Beyond that, the differentiation between Israel and its settlements — and its implications for the future — puts Israelis on edge.

“Behind the legal quibbles, there is a willingness on the part of the Brussels bureaucracy to influence the outcome of Israeli-Palestinian negotiations, which in any case does not fall within its jurisdiction,” foreign ministry spokesman Emmanuel Nahshon said.

- © AFP 2015.