Challenging the EU’s Illegal Restrictions on Israeli Products in the World Trade Organization
October 2015. Policy Paper no. 18
Prof. Avi Bell
Prof. Eugene Kontorovich
The European Commission is expected to take new measures in the coming months to impose special labelling requirements on Israeli products from areas where it regards Israel as lacking a legitimate claim to sovereignty. The Commission is also in the process of imposing what amounts to complete exclusion on agricultural products from these areas. Since 2013, the EU has been steadily imposing sanctions of rapidly escalating severity, despite vigorous Israeli diplomatic ef forts. If the planned measures are not challenged, more will quickly follow.
• Israel has a powerful, but thus far entirely unused tool against the EU sanctions. The EU’s proposed measures restrict Israeli trade in violation of international trade law found in numerous multilateral treaties, including articles 2.1 and 2.2 of the World Trade Organization Agreement on Technical Barriers to Trade; Articles IX, X and XIII of the General Agreement on Trade and Tarif fs and Article 2.3 and 5.6 of the Agreement on the Applications Sanitary and Phytosanitary Measures, among others.
• The WTO has a dispute resolution process that provides Israel with a relatively attractive forum to challenge the European restrictions. The process does not involve recourse to a permanent international court likely to be influenced by hostile attitudes towards Israel.
• The question of trade violations is entirely separate from the underlying merits of the conflict. Thus even if Israel were to concede for purposes of the dispute that the EU is correct about the illegitimacy of Israel’s presence in the territories and parts of Jerusalem, this would not provide a basis for the restrictive trade practices.
• Any justifications the EU could adduce for its policies are undermined by their admittedly discriminatory application. The EU does not have a general set of rules for dealing with occupied territories, settlements or territorial administrations whose legality is not recognized by the EU. Rather, the EU has special restrictions aimed at Israel. This violates the fundamental rules of the GATT/WTO system, under which even otherwise valid trade restrictions are void if not applied uniformly to WTO members. Thus Israel’s successful assertion of its rights in no way involves having the WTO accept its position on the status of the territories.
• EU arguments that these territories are not part of Israel are irrelevant in this context. The scope of the WTO agreements explicitly extend beyond a country’s sovereign territory, and include territories under its “international responsibility.” The draf ting history and subsequent application of the GATT make clear that this involves territories under military occupation.