What’s the significance of a ‘settlement-free Europe?’

The direct effects of official sanctions against Israeli settlements are limited. But the momentum created by such moves inspires and pushes private actors to take their own steps in the same direction.

France on Tuesday published a warning to its citizens against doing business in or with Israeli settlements in the West Bank, Golan Heights and East Jerusalem. The UK issued a similar official warning to its citizens late last year, and according to Haaretz’s Barak Ravid, Italy and Spain are expected to make similar announcements soon.

There has been an open movement in the halls of European power in the past year or so to implement what EU officials insist has always been the union’s position: to ensure that the EU is settlement free.

There will be no more business as usual if peace talks fail, a senior bureaucrat in the EU’s External Action Service told me earlier this month. “There’s a new political perception and political will in the international community.”

In addition to the warning from the UK and similar moves in Germany, momentum has been moving in a direction hostile to Israeli settlement activities for over a year.

The EU issued its beefed up settlement guidelines. Labeling of settlement products is moving forward. The EU has said it will stop recognizing Israeli veterinary certifications of poultry raised in settlements and a revocation for organic produce certifications from settlements is around the corner. More forceful territorial clauses are being inserted into each and every bilateral agreement between the EU and Israel, and the reception in Jerusalem isn’t cheery.

Some of those agreements with territorial clauses, like one dealing with participation with European police agencies, have Israel fuming.

But what do such measures actually mean, both for settlement trade and Israel’s reception of sanctions against it? Do they stand a chance of pushing Israel to end its settlement policies?

Some products from settlements will simply cost more as enforcement of labeling and tariff agreements is made more stringent, ensuring settlement products do not benefit from free trade agreements. Other products, like organic produce and poultry, will likely be excluded from the Europe market entirely because of their lack of recognized certifications.

But the actual economic consequences for the minority of Israeli businesses that are located beyond the Green line are not Jerusalem’s biggest concern. Exports from settlements will not make or break Israel’s economy, nor will they ever create enough pressure on Jerusalem to seriously change its decades-long policy of settlement expansion and occupation.

The territorial clauses in bilateral agreements will also not affect much change in Israeli settlement policy. Firstly, the territorial clauses are nothing new; their language is simply more bold today. Secondly, the type of compromise that was reached in order to allow Israel to sign the Horizon 2020 agreement earlier this year is seen in both Brussels and Jerusalem as something that can be replicated and applied to most future agreements as well.

The direct effects of the sanctions and warnings being issued in Brussels and capitals across Europe are not all that significant on their own, but they do not exist in a vacuum and they are not the end of the story.

The momentum created by such moves inspires and pushes private actors to take their own steps in the same direction. It will not be surprising if more European pension and other funds begin to rethink their investments in Israeli companies that are not only located in, but also those that only partially operate in settlements beyond the Green Line.

There is no Green Line separating different parts of the Israeli economy. A great number of Israel’s largest companies have operations beyond the Green Line, whether they be petrol companies that operate gas stations in settlements, banks with local branches serving settlers, or construction, water and electricity companies that provide settlement infrastructure.

One day, such ties to the settlements could ostensibly lead to the further and further exclusion of many Israeli companies from the European economy. That’s not around the corner, however. What is taking place — albeit on a smaller scale — is that European companies who do business beyond the Green Line, like Veolia, are losing business in Europe because of their ties to settlement activity.

In other words, the immediate effect of Europe’s sanctions on Israeli settlements is not that the Israeli economy will be excluded from Europe, but that Europe is beginning to exclude itself from those parts of the Israeli economy that are inseparable from settlements. But once again, that’s only part of the story.

In order to fully understand the significance of the official sanctions, one need only look at the official Palestinian BDS call and the indirect effects it is having.

The official BDS call has very specific guidelines, sanctions and goals — ones that are not always palatable for much of the world. However, the momentum it has created and the tools it has presented to the world, have been adopted in piecemeal fashion that allows each individual group to decide which parts work for it, and to apply them toward their own goals. That is what happened with the Presbyterian Church USA’s divestment decision last week.

A similar effect will likely take place in Europe: official sanctions will remain limited, but they are already creating momentum that has the potential to go much further. France’s warning to its citizens against doing business in settlements has the same potential.

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