Refinements to the E.U.’s origin marking requirements have exacerbated already frayed nerves in the Middle East. The European Union is Israel’s top trading partner, and will now require marking “made in settlements” on goods produced in Israeli-owned businesses in the occupied West Bank, the Golan Heights, and East Jerusalem, lands annexed by Israel during the Six-Day War in 1967. Israel is concerned that such labels could facilitate boycotting of Israeli-made goods. Israel also points out that many Palestinians work in the settlement factories and would bear the brunt of adverse trade flow in response to the new markings.
The occupied territories account for only a small part of Israel’s trade with the European Union. However, Israel is concerned that the marking requirements could be expanded to other businesses that deal with establishments in the settlements, not just those physically located there. Should that happen, other sectors including Israel’s banks could be forced to stop doing business with the settlements or risk damaging the business they do with the European Union.
This move could put U.S. businesses that trade in the region in a difficult position. The United States has strong laws that prohibit the participation or enablement of any activity that promotes the boycott of Israeli goods.