The European Union (EU) must impose a total ban on Israeli settlement products entering its markets and ensure that Israeli companies operating in the occupied Palestinian territories are not benefitting from EU-Israel trade agreements, according to a new report.

"Given that trading in settlement goods amounts to a form of recognition and supports the sustainability of entities that violate peremptory norms of international law, a ban on settlement produce… is to be considered amongst those actions that Third Party States should undertake to comply with their customary international law obligations," the report, written by Palestinian human rights group Al-Haq, states.

The report, entitled "Feasting on the Occupation: Illegality of Settlement Produce and the Responsibility of EU Member States under International Law," was released on Monday.

The boycott of settlement goods and companies is lawful, the report says, since Israeli settlements are illegal under international law, actively denying Palestinians the right to self-determination, and incuring the destruction and unlawful use of local resources, including water resources.

According to Al Haq Director Shawan Jabarin, EU imports of settlement products "help to sustain their very existence.

"As things stand, the EU is doing little more than ticking a box by acknowledging that settlements are illegal. Until they support this rhetoric with action and ensure that no assistance or recognition are provided to settlements, even indirectly, any such criticism will continue to be meaningless," Jabarin said.

Trading partners

The EU is Israel's largest trading partner. In 2011, total trade between the two parties reached almost $20bn. Israel imports approximately 35 percent of its products from the EU, while more than 26 percent of Israeli exports land in European markets.

According to "Trading Away Peace", a report released by 22 European human rights groups working in the area, exports from Israeli settlements to the EU total approximately $300m annually and represent about 2 percent of all Israeli exports to the EU.

Despite the low percentage of overall Israel-EU trade emanating from the settlements, the report says that these exports "still amount to a considerable quantity in absolute terms and are of vital importance for the economic viability of many settlements."

The EU currently imports approximately 15 times more from Israeli settlements than from Palestinians, or 100 times more per Israeli settler than per Palestinian.

"The significance of ending the import of colony products is much larger than the direct financial effect."

- Shir Hever, economist



Today, an estimated 500,000 Jewish-Israelis live in illegal settlements over the Green Line, the internationally recognised armistice line dividing Israel from the occupied Palestinian territories. Together, the settlements and their infrastructure cover over 40 percent of the occupied West Bank, including important water reserves and other resource-abundant areas.

Israeli economist Shir Hever estimates that the impact of the settlements from the point of view of consumption is 15.4 percent, while the settlements account for less than 15 percent of the country's total production.

"The significance of ending the import of colony products is much larger than the direct financial effect," Hever told Al Jazeera. "It is a strong statement reminding Israel of the illegality of the colonisation of the West Bank, and a blow to many Israeli and international companies who have turned the occupation into a source of profit."

He said that the Israeli government currently compensates Israeli companies that are forced to pay higher tariffs if European customs agents find that they have falsely labelled products "Made in Israel".

But this compensation, Hever said, cannot go on forever.

"If these companies are not able to export to Europe, the government will have no choice but to stop the compensations, and many companies will leave the West Bank. It could cause a reduction in the number of colonists in the West Bank."

'Alarming inconsistency'

The relationship between Israel and the EU is outlined under the EU-Israel Association Agreement, which was signed in 1995 and came into effect in 2000. The agreement outlines an easing of restrictions on trade and competition, the free movement of goods, and strengthening economic cooperation between both parties, among other things.

It also mandates that a respect for "human rights and democracy" underpin the trade dealings.

In late October, the European parliament passed a new amendment to the agreement, which eased restrictions on the trade of pharmaceutical products.

This upgrade came only a few months after the EU announced that it would bolster economic activities with Israel, while simultaneously scolding the Israeli government for severe breaches of Palestinian human rights and basic freedoms inside Israel and in the occupied territories.

Israeli and Palestinian human rights groups decried the enhanced partnership - which would see the EU enter into 60 new economic activities with Israel in over 15 different fields - as demonstrating the EU's "alarming inconsistency between practice and rhetoric".

According to David Cronin, a Brussels-based journalist and author of the book "Europe's Alliance with Israel: Aiding the Occupation", the EU's relationship with Israel is more than just inconsistent.

"The situation is one of complicity in crimes against humanity," Cronin told Al Jazeera.

Scientific research is a key component in the EU-Israel relationship, Cronin explained, adding that the EU turns a blind eye to the fact that many Israeli companies in this field operate in the occupied territories.

"Motorola Israel, to cite just one example, is benefiting from a number of EU research projects. Motorola Israel has also installed security systems in the Israeli settlements that the EU is supposed to be so [upset] about. This illustrates how empty the EU's criticism of the settlement expansion has been."

Labeling products

Currently, Israel ships exports from Israeli settlements together with goods from inside Israel. "The job of spotting settlement goods is left to importers, yet some settlement goods bear the misleading codes of corporate headquarters inside Israel," Human Rights Watch reported.

Settlement goods, therefore, often enjoy tariff-free entry into European markets.

"Tactical and targeted BDS campaigns are the most effective ones, in fact, because they tend to be sustainable and gradual enough to make a lasting and mounting impact in holding Israel accountable to international law. - Omar Barghouti, BDS co-founder



In May, Denmark said it would begin accurately labelling products made in Israeli settlements. A month earlier, one of the UK's largest supermarket chains, the Co-operative Group, ended trade with Israeli companies exporting produce from the settlements. The decision directly affected four major Israeli suppliers: Agrexco, Arava Export Growers, Adafresh and Mehadrin.

According to the Al-Haq report, these measures are not enough.

"In itself, such a measure does not satisfy the level of action required by EU Member States' legal obligations. States will only fully comply with their obligations under customary international law by enforcing a ban on the trade of produce coming from Israeli settlements."

However, EU representatives have repeatedly shot down the idea of Europe imposing sanctions on Israel. British Foreign Sectretary William Hague said he saw no "enthusiasm" in Europe for trade sanctions.

Targeted boycott

In 2005, hundreds of Palestinian civil society groups launched the Boycott, Divestment and Sanctions (BDS) movement with the aim of forcing Israel to respect international law, UN resolutions, and the basic rights of Palestinians.

While the BDS movement advocates for a complete boycott of Israel and of all Israeli institutions or corporations that violate international law, Omar Barghouti, a co-founder of the BDS Movement and the Palestinian Campaign for the Academic and Cultural Boycott of Israeli (PACBI), told Al Jazeera that a targeted boycott can be very effective.

"Tactical and targeted BDS campaigns are the most effective ones, in fact, because they tend to be sustainable and gradual enough to make a lasting and mounting impact in holding Israel accountable to international law," Barghouti said.

He explained that targeting companies that produce and market products from Israeli settlements - rather than settlement produce alone, which is a largely symbolic step - will have the biggest impact.

In the meanwhile, Barghouti believes "boycotting any Israeli product or institution brings us closer to a mainstream boycott of all institutions and corporations that are implicated in Israel's violations of human rights and international law."

"Boycotts are not on the agenda," a spokesman at the EU Embassy was quoted by Jersualem Post as saying. "The EU continues to oppose boycotts, including boycotts of settlement products."