EU to boost Israel trade relations despite settlements row

The EU is Israel’s main trading partner with total trade worth €29.5 billion in 2011. The 27-member bloc agreed its first bilateral trade deal with Israel in 2000. However, plans for a comprehensive EU-Israel free trade agreement were frozen by the EU in January 2009 following Israeli attacks on the Gaza strip. The EU said that progress on trade talks was dependent on Israel’s commitment to the Middle East peace process, in which the EU forms part of the international Quartet.

The move comes just weeks after EU foreign affairs chief Catherine Ashton denounced plans unveiled by Benjamin Netanyahu’s government in June to expand settlement building in the occupied territories, insisting that they were “illegal under international law and threaten to make a two-state solution impossible.”

In its annual progress report on Israel published in May, the EU also criticised the pace of economic reform as well civil liberties abuses and “anti-democratic” legislation proposed in the Israeli Knesset.

Despite this, none of the 27 foreign ministers objected to the deal.

Instead, ministers are expected to claim that the deal, which falls short of the 2009 plans, does not represent a shift in policy by the EU. However, this is unlikely to satisfy the European Parliament, where MEPs adopted a resolution earlier this month demanding an immediate halt to new Israeli settlements and a moratorium on products from the occupied territories being accepted by the EU.

Speaking in Strasbourg, Belgian MEP Veronique De Keyser, foreign affairs spokesperson for the centre-left Socialist group, called on the Commission to put in place “an effective EU control mechanism to ensure that Israeli settlement products do not continue to get preferential access to the European market.”

The Parliament is also continuing to delay ratification of the ACCA agreement on accepting each other's industrial products, regarded as a key part of the bilateral trade deal.

Meanwhile, Israeli Foreign Minister Avigdor Liberman, who will meet Ashton and EU foreign ministers, is also expected to use his trip to Brussels to urge the EU to include the Lebanon-based Hezbollah in its list of terrorist organisations.

In a statement released on Monday, EU ministers offered “strong and continued commitment to Lebanon's unity, stability, independence, sovereignty and territorial integrity.”