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The EU Decision to Label Products from the Settlements

(Institute for National Security Studies) Oded Eran, Nizan Feldman, and Eran Yashiv - There are numerous economic, political, institutional, and technical constraints that are likely to make it difficult for unofficial and official players in Europe to undertake additional measures that will cause substantial damage to the Israeli economy. These constraints are due mainly to the composition of Israeli exports. Most of the Israeli goods exported to the EU and other important markets are used as production inputs, and are not consumed by the general public as end-user products. Campaigns calling on consumers to boycott Israeli goods may perhaps detract from exports of agricultural products and processed foods, which account for less than 10% of total exports to the EU, but it is more difficult to affect exports of chemical and rubber products, computing, machinery, and optics. These goods account for more than 45% of total exports to EU countries. The identity of the companies exporting from Israel poses another political obstacle to those seeking to enforce significant punitive measures. A substantial proportion of exports from Israel are composed of goods produced by multinational companies that have established manufacturing activity in Israel, or else by Israeli companies with subsidiaries in Europe and other markets. Official restrictions on trade or investment vis-a-vis Israel are liable to wind up damaging the direct interests of those multinational companies. The EU labeling decision leaves implementation in the hands of each country. A number of governments, headed by Germany, have already announced their opposition to enforcement of the measure. Additional countries may hesitate to engage in confrontation with various groups, including the U.S. Congress.
2015-11-23 00:00:00
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