E.c. Offers Israel a Trade Deal in Exchange for Diplomatic Role

The European Community is offering to integrate Israel more fully into the European economic sphere if Israel accepts an E.C. role in the proposed Middle East peace conference.

The E.C. is also prepared to act against the Arab economic boycott of Israel and to take the initiative at the United Nations to rescind the 1975 General Assembly resolution denigrating Zionism as a form of racism.

Those and other issues were discussed with Israeli Foreign Minister David Levy here Tuesday at the annual meeting of the E.C.-Israel Cooperation Council. It was followed by a two-hour working lunch which Levy attended with the 12 E.C. foreign ministers.

Levy said at a news conference later that the issue of E.C. participation in the proposed peace conference “will be decided between us in the next few days.”

He said he would report to his government on his talks here and expressed hope that “we will find an agreement.”

Jacques Poos, the foreign minister of Luxembourg who currently holds the rotating chairmanship of the E.C. Council of Ministers, said, “What we are proposing is not to isolate Israel but rather to offer it all the potentialities of the unified European market of 1993.”

Israel and the E.C. have been linked since 1975 by a trade cooperation agreement. Israel has been pressing the Europeans to adapt it to the conditions that will prevail when the unified European market without trade barriers comes into being.

Gianni de Michelis, the foreign minister of Italy, proposed that Israel be given a relationship to the E.C. similar to that enjoyed by the European Free Trade Association.

The association, composed of Sweden, Finland, Iceland, Norway, Austria and Switzerland, enjoys considerable advantages in trade with the E.C. countries.

According to de Michelis, Israel would have greater economic and political security linked to the E.C. “I feel that this is more important than having a Soviet Embassy in Israel,” he said.

Levy called the European proposal “very important” for the economic future of Israel. “This is very promising,” he said, hinting that he would have to sell his government on the idea of an E.C. peace conference role.

The Israeli foreign minister flew back to Jerusalem on Tuesday night to participate in talks with U.S. Secretary of State James Baker. He said before leaving that he was optimistic about Baker’s mission.

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