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Behind the Headlines: Europe Accuses Jewish State of Thwarting Palestinian Trade

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A secret report by the policy-making arm of the European Union has accused Israel of violating its economic accord with the 15 E.U. member states.

The allegations, centering on accusations that Israel interferes in trade between Europe and the Palestinians, are bound to escalate the war of words between Israel and European Union and could deal a further blow to trade between Israel and E.U., its largest single trading partner.

Last month, attention was focused on the European Commission’s proposal to withdraw preferential trade status from Israeli goods produced in disputed areas, including the West Bank, Gaza Strip, eastern Jerusalem and the Golan Heights.

Israeli Prime Minister Benjamin Netanyahu lashed out at the European Union when the proposal was first announced, threatening to remove Europe entirely from any role in the Middle East peace process.

Since then, the 15 E.U. foreign ministers have twice postponed planned discussions of the proposal, which is now slated to be debated at the end of this month.

The secret report of the European Commission, obtained by JTA, claims that Israel is engaging in deceitful practices to protect itself against competition from European and Palestinian manufacturers.

The report charges that Israel’s practices not only violate its trade accord with the European Union but also prevent the application of an E.U.-Palestinian trade agreement that went into effect last July.

A senior Israeli official in Brussels responded to questions about the report by conceding that there might be some technical problems where Palestinian trade is concerned.

The official added that Israel is perfectly willing to discuss a resolution, but that the Jewish state would have nothing to discuss if it believes the issue is being used by the Europeans to achieve political ends in the peace process.

A recent poll suggests that most Israelis are distrustful of E.U. motives.

According to a survey by the Tami Steinmetz Center for Peace Research at Tel Aviv University, most of the respondents believed that Europeans are biased in favor of the Palestinians.

Asked their opinion of the Europeans as mediators in the peace process, 60 percent thought they were more supportive of the Palestinians, 4 percent thought they were more supportive of Israel, while 31 percent consider them to be neutral.

By contrast, 24 percent consider the United States to be more supportive of Israel, 20 percent believe the Americans are more supportive of the Palestinians, while 50 percent consider the United States to be neutral.

According to the European Commission report, “Palestinian products are subject to security checks three or four times on their route from the West Bank and Gaza Strip to Israeli outlets.”

These security checks, the report charges, “often cause damage and delay Palestinian-traded products and make them costlier.”

The report further charges that Israel has a general policy of giving priority to Israeli shipments at the port of Ashdod and at Ben-Gurion Airport, which creates particular problems for Palestinian perishables.

Israel, says the report, also hampers European imports to the Palestinian areas: “Import licenses are often not granted, or are delayed, by the Israeli authorities. This happens, for example, in the case of imports to the West Bank and Gaza Strip for the purpose of making up finished products for domestic consumption or export.

“In order to fulfil the terms of his deal, the Palestinian producer who has difficulties obtaining a license agrees to import the products without a license and to pay a 5 percent fine.”

The reason given by the Israeli authorities for not granting a license, the report continues, is often that products fail to meet standards, “even though the same product is imported to Israel by an Israeli agent without problem. In other cases, the standards cited do not even exist in Israeli import regulations.”

The report further alleges that Israeli officials have required all Palestinian importers to sign a pledge that European imports will be sold only in the West Bank and Gaza Strip.

These practices, according to the report, “reduce the potential for the development of direct trade relations between the European Union and the Palestinians.”

Palestinian producers, it adds, often have no choice but to agree to use Israeli agents for their exports.

As an example, the report says a major producer of cut flowers in the Gaza Strip exports his goods under Israeli certificates of origin through Agrexco, a firm that handles non-citrus Israeli agricultural exports.

The report charges that the Palestinian producer does so “in order to avoid the risk of damage and delay” to his products, adding that Agrexco goes as far as to require him to deposit a sum equal to the 14 percent duty, described as a Palestinian Authority tax, that would be charged by the E.U. officials if they were to discover the practice.

The report also says there are “documented instances in which the Israeli exporting agent does nothing but stick a `Made in Israel’ label on Palestinian products.”

The need for Palestinian importers to use Israeli agents also pushes up consumer prices and makes European goods less competitive in the Palestinian market, the report continues.

And, it says, the system deprives the Palestinian Authority of the taxes that would be collected if the goods were imported directly through a Palestinian agent.

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