Israel–European Union relations

Euro-Israeli relations

European Union	Israel

Israel is a neighbouring and associated state of the European Union. The relations between the two are framed in the European Neighbourhood Policy (ENP), the Euro-Mediterranean Partnership, and the Union for the Mediterranean.

The main legal ties between Israel and the EU are set by the 1995 Association Agreement. Several other agreement cover sectoral issues.

Relations between Israel and the European Union are generally positive on the economic level, though affected by the Israeli–Palestinian conflict on the political level.

Historical background

Israel and the EEC established diplomatic relations as early as 1959. A first free trade areaagreement was signed in 1975. In the Essen Council in 1994, the EU signalled its willingness to establish special relations with Israel.

Multilaterally, Israel takes part in the 1995 Barcelona process (Euro-Mediterranean Partnership), and the subsequent 2008 Union for the Mediterranean, and since 2003 in the European Neighbourhood Policy (ENP).

Bilaterally, after a Cooperation Agreement in 1975, an Association Agreement came into force in1995, providing for preferential economic, commercial, technological and research status between the parties. It included measures for the creation of a free trade area in industrial goods, and the liberalisation of trade in agricultural goods, of services, and of capital movements. The agreement also set the basis for cultural, research and political cooperation

The EU-Israel Association Agreement (2000)

Weizmann Institute of Science

The EU-Israel Association Agreement forms the legal basis governing relations between Israel and the European Union, modelled on the network of Euro-Mediterranean Agreementsbetween the Union and its partners in the southern flank of the Mediterranean Sea.

The agreement with Israel incorporates free trade arrangements for industrial goods, concessionary arrangements for trade in agricultural products (a new agreement here entered into force in 2004), and opens up the prospect for greater liberalisation of trade in services, and farm goods, from 2005. The Association Agreement was signed in Brussels on 20 November 1995, and entered into force on 1 June 2000, following ratification by the 15 Member States' Parliaments, the European Parliament and the Knesset. It replaces the earlier Co-operation Agreement of 1975.

The Association Agreement established two main bodies for the EU-Israel dialogue. The EU-Israel Association Council (held at ministerial level) and the EU-Israel Association Committee (held at the level of senior officials) meet at regular intervals, to discuss political and economic issues as well as bilateral or regional co-operation.

Article 2 of the Association Agreement states:

Relations between the Parties, as well as all the provisions of the Agreement itself, shall be based on respect for human rights and democratic principles, which guides their internal and international policy and constitutes an essential element of this Agreement.

Dispute on preferential treatment for Israeli products originating from Palestinian territories

Goods from Israeli settlements in the Israeli-occupied territories are not subjected to the free trade agreement, as they are not considered Israeli.

Since 1998, Israel and the EU have been in dispute over the legal treatment of products exported to the EU from the Israeli-occupied territories. Israel argues that these are produced in its custom territory and should thus be subjected to the Association Agreement and benefit from preferential treatment. The EU upholds that the Territories are not part of Israel, given the illegality of the occupation under international law, and such products do not therefore benefit from preferential treatment.

A 2001 Avis by the European Commission confirmed the lack of preferential status for such products, inducing infuriated reactions from Israel, though the economic significance of the Territories-based Israeli products is very limited (€100 mln/year over a total of €6 bln/year). Differently than the EU, the United States admit custom-free goods exported from the Territories under their 1985 Free trade agreement.

A solution was negotiated in 2004, whereby the Israeli authorities would specify on the certificate of origin the geographic location of the production site (e.g. Israel, Barkan), without having to specify as such if the goods originate from the Territories or not. The EU customs authorities will then be able to discriminate the exact origin and provide preferential treatment only to goods from Israel proper, giving de facto meaning to the EU policy of non-recognition of the Territories as part of the State of Israel

The 2010 ruling of the European Court of Justice in the Brita case confirmed that products originating in the West Bank do not qualify for preferential custom treatment under the EC-Israel Agreement, and that contrary assertions by Israeli authorities are not binding upon EU customs authorities. The ECJ relied in its reasoning on the presence of two, distinct and equal Association agreements, one with Israel, applying to the "territory of the State of Israel", and one with the PLO, applying to the territory of the West Bank and Gaza Strip, and on the general principle of customary international law that an obligation cannot be imposed on a third party without its consent. The Court concluded that the EC-Israel Agreement may not be interpreted in such a way as to compel the Palestinian Authorities to waive their right to exercise the competence conferred upon them by virtue of the EC-PLO Agreement and, in particular, to refrain from exercising the right to issue customs documents providing proof of origin for goods manufactured in the West Bank and the Gaza Strip. It follows that products originating in the West Bank do not fall within the territorial scope of the EC-Israel Agreement and do not therefore qualify for preferential treatment under that agreement.<

Sectoral agreements

ACAA free trade agreement in pharmaceutics (2012)

Upgrading the Association Agreement has long been on hold following a vote in the European Parliament to postpone the issue in December 2008, due to continuing settlement-building and the blockade of the Gaza Strip.

The Agreements on Conformity Assessment and Acceptance of Industrial Products which focus on pharmaceutical products (ACAA) was adopted by the European Parliament on 23 October 2012, following a debate that had lasted for more than a two years of delay. The ratification of ACAA will make it easier to export Israeli pharmaceuticals and other goods to the 27 EU member countries, and vice versa. Following a controversial debate, 379 members of the European Parliamentin favor and 230 against the ratification. The ACAA agreement is in conformity with the Brita ruling on the non-preferential access of goods produced in the Israeli settlements.

Prospects for an open skies agreement

Israel has postponed signing an open skies agreement with the EU intended to reduce the cost of flights between Israel and EU member states through increased competition, until the economic impact of such an agreement on Israel's airlines can be evaluated.

Fields of cooperation

Trade

Trade between the EU and Israel is conducted on the basis of the Association Agreement. The European Union is Israel’s major trading partner. In 2004 the total volume of bilateral trade (excluding diamonds) came to over €15 billion. 33% of Israel’s exports went to the EU and almost 40% of its imports came from the EU.

Total EU (27 Member States) trade with Israel rose from €19.4 billion in 2003 to €21.36 billion in 2004. EU exports to Israel reached €12.75 billion in 2004, while imports from Israel were €8.6 billion. The trade deficit with Israel was €4.15 billion in the EU’s favour in 2004.

Under the Euro-Mediterranean Agreement, the EU and Israel have free trade in industrial products. The two sides have granted each other significant trade concessions for certain agricultural products, in the form of tariff reduction or elimination, either within quotas or for unlimited quantities.

Science and culture

Israel was the first non-European country to be associated to the European Union’s Framework Programme for Research and Technical Development (RTD). Israel's special status is the result of its high level of scientific and research capability and the dense network of long-standing relations in scientific and technical co-operation between Israel and the EU. The European Commission signed an agreement with Israel in July 2004 allowing for its participation in the EU’s Galileo project for a Global Navigation Satellite System.

Euro-Mediterranean regional programmes

Israel, because of its high national income, is not eligible for bilateral funding under MEDA. It has however been involved in a wide variety of Euro-Mediterranean regional programmes funded under MEDA:

• Young Israelis participate in youth exchange programmes with their European and Mediterranean counterparts under the Euro-Med Youth Action Programme.
• Israeli filmmakers have benefited from funding and training under the Euro-Med Audiovisual Programme.
• Israeli universities participate in the FEMISE forum of economic institutes while chambers of commerce and employers associations have participated in programmes like UNIMED and ArchiMedes.
• Institutes like the Israel Antiquities Authority participate in Euromed Cultural Heritage.

Open issues

Lawsuit to disclose EU funding of Israeli NGOs

The European Union has been criticized for funding Israeli-based political NGOs that attempt to undermine Israeli policies and preach "division and confrontation". NGO Monitor claims they have identified over 48 million dollars that have been allocated to Israeli and Palestinian NGOs by the European Commission. As a response, the Israeli Knesset attempted to pass two bills that would limit the amount that a foreign government or organization could gift. However, these two bills were never passed into law.

In 2012, the European Court of Justice threw out a lawsuit that would require the European Union to release details of its funding of Israel-based NGOs. The lawsuit, which was filed in January 2010, charged that the European Commission had failed to fulfill European Union transparency obligations after NGO Monitor had tried for 13 months to obtain documentation detailing EU nongovernmental agency funding. Under the European Freedom of Information Act, such funding details must be made available upon request. However, the EC cited “public security,” “privacy” and “commercial interests” in denying the information request.

Inter-relation with Middle East peace process policy

The European Union attaches great importance to the finding of a just and final settlement to the Arab-Israeli conflict and supports initiatives to further the peace process, through the role of the Special Envoy for the Middle East Peace Process (Marc Otte), through its involvement in support of the Quartet (EU, US, Russia, UN), its programmes of humanitarian and other assistance for Palestinians in the West Bank and Gaza, by virtue of the commitments entered into by Israel, the Palestinian Authority and the EU in the European Neighbourhood Policy Action Plans, as well as through programmes for civil society and people to people contacts. The EU is also the largest donor of aid to the Palestinian autonomous areas.

The EU has been more critical of Israel and more supportive of the Palestinians than the US. The general position of the EU is that a Palestinian state should be based on the 1967 borders with land swaps, Jerusalem should be divided and become the capital of both states, and a negotiated settlement be found for the Palestinian refugee issue, although member states have sometimes been divided on these issues. However, all EU states universally consider Israeli settlements illegal under international law. The EU has insisted that it will not recognize any changes to the 1967 borders other than those agreed between the parties. Israel's settlement program has thus led to tensions. The most difficult of these issues, however, is Jerusalem. Israel has insisted that the city will remain its undivided capital, and is fiercely opposed to its re-division. Israel does not regard Jewish neighborhoods in East Jerusalemas settlements, while the EU does. East Jerusalem has been a de facto part of Israel following Israel's unilateral annexation of the area, while the EU, along with the rest of the international community, regards it as occupied territory subject to negotiations. The EU has frequently criticized Jewish construction in East Jerusalem.

In 2008, during the French presidency of the Council, the European Union strived to increase cooperation with the US on Middle-Eastern issues, inter alia with a view to coordinating common pressures on Israel. In late 2009 and 2010, a Swedish-drafted EU paper called for Jerusalem to be divided and become the joint capital of Israel and a Palestinian state, and criticized Israel's building in East Jerusalem. The draft was met with Israeli opposition, and was eventually not adopted.

European Union foreign ministers welcomed Prime Minister Benjamin Netanyahu's conditional endorsement of a future Palestinian state in June 2009, but said it was not enough to raise EU-Israel ties to a higher level and questioned the conditions set for backing a Palestinian state and Netanyahu's defense of Jewish settlements. In December 2010, a group of 26 former EU statesmen, including former Foreign Affairs Chief Javier Solana, submitted a written petition calling for the EU to ban imports of settlement products, force Israel to pay the majority of aid required by the Palestinians, link an upgrade in diplomatic relations to a settlement freeze, and send a high-level delegation to east Jerusalem to support Palestinian claims to sovereignty. The request was rebuffed by Foreign Affairs Chief Catherine Ashton.

The EU has also been highly critical of Israeli military actions in the Palestinian territories and Lebanon, often referring to them as "disproportionate" and "excessive force" and calling for an immediate cease-fire. During Operation Defensive Shield in 2002, the European Parliament passed a non-binding resolution calling for economic sanctions on Israel and an arms embargo on both parties. Following the Gaza War, the European Parliament endorsed the Goldstone Report. The EU has also been critical of Israel's Gaza blockade, referring to it as "collective punishment."

EU member states had no common response to the Palestinian Authority's announcement that it would declare independence in September 2011, through the Palestine 194 diplomatic campaign to gain membership for the State of Palestine in the United Nations. Some stated that they might recognize the state if talks did not progress, or to punish Israel for settlement construction. When Palestine was admitted to UNESCO as a full member in October 2011, five EU members states were among the 14 countries that joined Israel in voting against (Czech Republic, Germany, Lithuania, Netherlands and Sweden); eleven voted in favour of Palestinian membership (Austria, Belgium, Cyprus, Finland, France, Greece, Ireland, Luxembourg, Malta, Slovenia, Spain) and eleven abstained (Bulgaria, Denmark, Estonia, Hungary, Italy, Latvia, Poland, Portugal, Romania, Slovakia, United Kingdom).

Incoming president of the European Parliament Martin Schulz has confirmed that relations with Israel will remain frozen until there is movement on the peace process.

A classified working paper produced by European embassies in Israel, parts of which were obtained by theHaaretz newspaper, recommended that the European Union should consider Israel's treatment of its Arab population a "core issue, not second tier to the Israeli-Palestinian conflict". Other issues considered material to relations with Israel include the lack of progress in the peace process, the continued occupation of the Palestinian territories, Israel's definition of itself as Jewish and democratic, and the influence of the Israeli Arab population. Israel's Foreign Ministry replied that the EU members of the Security Council called this "inappropriate bickering" that would make them "irrelevant", and accused the EU of "interfering" in Israel's internal affairs. However, the EU had a divided internal reaction to the working paper: countries including Britain were seeking concrete punitive measures against Israel if they did not address Israeli Arab issues, while other countries including Poland and the Netherlands made their opposition clear to such actions. The final paper did not include any specific EU planned actions on the matters it discussed.

A classified document by EU delegates, obtained by Ynet, suggested funding Palestinian construction projects in Area C of the West Bankwithout Israel's cooperation, undermining Israeli control. Under the Oslo Accords, Area C is under full Israeli civil and security control. It contains all of Israel's West Bank settlements and a small Palestinian population. The document expressed concern that Israel's policies would undermine the prospect of a Palestinian state on the 1967 borders, and called on Israel to support Palestinian construction across Area C and in East Jerusalem.

A published EU report in early 2012 made an urgent call for the EU to adopt a more "active and visible" implementation of its policy towards Israel and the peace process. A potentially radical proposal for "appropriate EU legislation to prevent/discourage financial transactions in support of settlement activity" was the first indication that some member states were seeking European divestment from businesses actively involved in the settlement enterprise. Under one interpretation of the proposal, the Commission would use legislation to force companies in Europe to break their links with businesses involved in settlement construction and commercial activities. The report also recommended the EU prepare a blacklist of settlers involved in violence, in order to possibly ban them from entering EU member states, encourage PLO activity and representation in east Jerusalem, and for senior EU officials to avoid being escorted by Israeli representatives or security personnel in east Jerusalem. The issue of the PLO/Fatah and East Jerusalem has been a flashpoint between Israel and many EU countries because EU diplomats have often met their Palestinian counterparts in the city but have rarely met with Israeli government officials there (even in West Jerusalem, which the EU sees as a current and future part of Israel), which also ties into how the EU has tried to present Tel Aviv as the Israeli capital even though the central seat of government and most government facilities are located in Jerusalem.

Another 2012 EU report recommended that the EU undermine Israeli control of Area C of the West Bank by pursuing and funding Palestinian building projects undertaken without receiving Israeli building permits, which are required in Area C.

EU foreign policy chief Catherine Ashton said she was following with great concern the case of Khader Adnan, a prisoner on hunger strike detained without trial by Israel. Adnan ended his hunger strike after 66 days, after reaching a deal with prosecutors an hour before his case was due to be heard by the Supreme Court of Israel. The EU has been critical of Israel's system of administrative detention.

EU membership for Israel

Although Israel is not in Europe, it considers itself culturally part thereof. Israel thus is a member in many European transnational federations and frameworks and takes part in many European sporting events. Various Israeli ministers have expressed that they would like to see Israel in the EU. Former Italian Prime Minister Silvio Berlusconi, who visited Israel in February 2010, said that his "greatest desire" was to see Israel join the European Union. The European Union's High Representative for Common Foreign and Security Policy, Javier Solana, stated in 2009 that Israel had a very significant relationship with the EU, amounting almost to full cooperation through participation in the EU's programmes. Israel is however not included among the nine countries that are part of the EU agenda for future enlargement of the European Union.

Further reading

• Ahlswede, Stefan (2009). Israel's European Policy after the Cold War. Düsseldorf Series on International Law and Policy. Baden-Baden: Nomos. ISBN 978-3-8329-4817-7. 
• Musu, Costanza (2010). European Union Policy towards the Arab-Israeli Peace Process. The Quicksands of Politics. Basingstoke: Palgrave Macmillan. ISBN 978-0-230-55312-5. 
• Pardo, Sharon; Peters, Joel (2010). Uneasy Neighbors: Israel and the European Union. Lanham, MD: Lexington. ISBN 978-0-7391-2756-8. 

External links

• The European Friends of Israel website
• Israeli ambassador to the EU in TheParliament.com 9 February 2009