Nearly two dozen European nongovernmental organizations have signed a new report recommending that European governments should discourage businesses from purchasing goods manufactured in Jewish settlements in the West Bank and ban the import of such products. The introduction to the report, which was released on Monday and was signed by 22 European NGOs, was written by Hans van der Broek, a former Dutch Foreign Minister and former European Union foreign policy chief.

"Trading Away Peace: How Europe Helps Sustain Illegal Israeli Settlements" states that Europe's many connections with West Bank settlements are inconsistent with international laws stipulating that third parties, including European governments, have a duty not to recognize, aid or assist settlements as well as to oppose them.

The report lists 12 steps the EU and national governments could take to address the situation. According to the report, European imports from the settlements are at least 15 times greater than its imports of Palestinian products. The report says this ratio highlights the contradiction between the EU's declarations that the settlements are illegal and an obstacle to the two-state solution and EU member states' support for the settlements in practice. "Given that settlement expansion is making a viable Palestinian state all but impossible, the trade with settlements is undermining billions of Euros in aid that Europe has invested in Palestinian state-building efforts," the report says.

Van der Broek urges that the 12 measures be considered "at the highest levels." In addition to banning imports from the settlements, as the report notes that Ireland has already called for, and discouraging businesses from purchasing goods produced in the settlements, it recommends that governments formally advise businesses to refrain from "all other commercial and investment links with settlements."

On both the EU and national level the report recommends "excluding settlements from bilateral agreements and cooperation instruments with Israel by means of explicit legal provisions and safeguards." It also recommends issuing guidelines to European tour operators to "prevent support for settlement businesses, including hotels, bus operators, archaeological sites, etc."

The report also recommends that state-funded bodies in Europe exclude settlement products and companies from tenders as part of the conditions of a contract resulting from such tenders. "This must be done before Israel is allowed increased access to public procurement markets in the EU, as currently envisaged under the EU-Israel Action Plan," the report says.

Another recommendation the report makes is to revoke tax exemptions for gifts made by organizations to settlements.

The report recommends that European governments and OECD members insist that Israel separate statistical data between sovereign Israeli territory and the settlement. It notes that Israel had committed itself to doing so when it became a member of the OECD in 2010 but has not complied.

The EU delegation to Israel said in a response, "This is a comprehensive report often drawing on statistics provided or statements made by EU institutions. The report represents an important contribution to the ongoing debate on this and other issues related to the Middle East peace process. The European External Action Service [the EU's diplomatic service] does not always agree with the conclusions reached in the report."

The report cites figures from the Palestinian Ministry of National Economy showing that the Palestinian economy loses some $7 billion annually due to Israeli control over the West Bank and the restrictions it imposes. The report cites International Monetary Fund figures according to which exports constitute less than 15 percent of the Palestinian GDP, down from 50 percent in the 1980s. The report concludes that this decline negates any benefits of the EU's preferential trade agreement with the Palestinians."

The report states that Israel provides the settlements and its inhabitants with significant financial benefits and access to lands and water, which are the basis for the economic success of products from the settlements, particularly agricultural products. But at the same time, the authors write, Israel hinders Palestinian economic activity by limiting movement and access to lands in Area C, under its full military and civilian control, and limiting access to water, grazing and farm lands, most of which is located in Area C.

Quoting an estimate cited by the World Bank from an article written by Israeli and Palestinian economists, the report states that if Israeli restrictions on Palestinian agricultural produce in the Jordan Valley were lifted to allow only a 3.5 percent increase in cultivated land, the Palestinian economy "could gain $1 billion a year - comparable to the entire annual foreign aid budget to the Palestinian Authority."

About 66 percent of Israel's fruits and vegetables are exported to Europe. The report's writers estimate that "the figure can be expected to be similar for fresh produce from settlements." For example, the report notes that about 70 percent of grapes grown in the Jordan Valley are destined for export, and constitute half of Israeli grape exports. More than 80 percent of dates grown in the Jordan Valley are exported. In 2011, the report notes, Israel exported 25,000 tons of dates, 12,000 tons of which were grown in the Jordan Valley. In contrast, the Palestinians produced about 2,500 tons of dates in Israeli-occupied areas. Only 300 tons were exported, mainly to the Gulf states.

According to the report Israel limits the development of Palestinian farming, particularly in the Jordan Valley, by restricting access to water and land.

In his introduction to the report, van der Broek writes that while the peace process is stagnating due to a number of reasons, the most significant is Israel's "incessant settlement policy." Van der Broek goes on to say: "We Europeans have failed to move from words to action. So far, we have refrained from deploying our considerable political and economic leverage vis-a-vis Israel to contain developments on the ground that contradict our basic values and that undermine our strategic interests."

Van der Broek also wrote that the measures suggested in the report are directed against the settlements in the occupied territories and "do not constitute an anti-Israel agenda. On the contrary, the preservation of the two-state solution, in accordance with international law, should be seen as a contribution to Israel's security and legitimacy."

Open gallery view Settlement of Bat Ayin in West Bank Credit: Nir Kafri