Tel Aviv’s change of heart eases tensions between EU and Israel

Date: 01/10/1998

By Simon Taylor

ISRAELI Prime Minister Benjamin Netanyahu's decision to recognise the EU's free trade agreement with the Palestinian Authority, albeit with strings attached, has been cautiously welcomed by the European Commission.

Officials have heralded the move as a “step forward”, although they stressed that the Commission had not been formally notified of the decision.

According to Israeli media reports, Tel Aviv will only recognise the agreement if the EU lifts its restrictions on imports from the Occupied Territories in Gaza and the West Bank.

Commission officials nevertheless hope that an end to the long-running dispute will improve relations between the EU and Israel at a critical time for the Middle East peace process.

They say Netanyahu's change of heart will help to ease tensions between Brussels and Tel Aviv on a number of trade issues including the dispute over whether products such as fruit juice made from oranges grown in the Palestinian territories were eligible for trade concessions made to Israel.

The Commission claimed that Israel had imposed obstacles on Palestinian exporters who wanted to ship their products directly to the EU, forcing them to declare their products as Israeli in origin when they had in fact come from areas like the Gaza Strip and the West Bank which are not internationally recognised as belonging to Israel.

Relations between the EU and Israel reached a low point in May when the Union threatened to withdraw import concessions for Israeli produce. Tel Aviv suspended two-thirds of all export licences for orange juice issued in the second half of 1995 after an investigation into allegations that non-Israeli oranges had been used in juice labelled as being of Israeli origin.

The Commission is expected to produce a report in the next few weeks on the application of customs rules following a visit to Israel by a team of EU inspectors in early September.

Officials say that the visit confirmed the EU's view, set out in a Commission statement in May, that Israel was effectively blocking compliance with the agreement.

Relations between Israel and the Palestinian Authority have entered a state of extreme tension amid threats from President Yasser Arafat to declare a Palestinian state unilaterally next May if Tel Aviv fails to reach agreement on key issues. These include demands that Israel withdraw from parts of the West Bank and calls for the Palestinians to do more to combat terrorism.

Netanyahu has warned Arafat not to take unilateral action, saying that this would lead to a total “collapse” of the peace process. But the Palestinians argue that they are entitled to declare a state under the terms of the 1993 Oslo peace accord, which set a five-year deadline for an agreement.

All parties to the process are hoping that that a recent US-sponsored plan will make a breakthrough possible. “There is general agreement that the US proposal is a good compromise and is the best way out of the impasse,” said a Commission official.

He dismissed suggestions that the EU was trying to push forward two rival plans, one drawn up by the French and the Egyptians and the other by Union envoy Miguel Moratinos. “There is no need to put up a competing process,” said the official. “What we need to avoid at all costs is a diplomatic vacuum.”

Netanyahu's decision to recognise the agreement between the EU and the Palestinian Authority comes as the Union is trying to play a greater role in the peace process. External Relations Commissioner Manuel Marín is hoping that the EU will co-chair, with Norway, the committee of aid donors to the Middle East. Oslo has provisionally agreed to this, despite opposition from the US and Israel.

A Commission official insisted that the Union was entirely justified in pressing for a key role on the committee. “The EU is the main donor, providing over 55&percent; of all funds to help the process,” he said. He warned that unless its concerns were taken into account, there was a risk that the Union would act unilaterally by administering its aid directly instead of through the donors' conference.