Claim: Labeling of 'settlement products' would have little economic impact

Haaretz is claiming that a European requirement to label 'settlement products' would have very little economic impact.

So how much do Jewish settlements in the West Bank, Golan Heights and East Jerusalem actually sell in Europe? It’s not a number that’s easy to come by, as the Israeli government publishes no separate figures on exports from these disputed areas – presumably out of concern it might be seen as tacit acknowledgement of their questionable status.

But according to figures obtained by Haaretz from a high-ranking authority on foreign trade matters, exports originating from the settlements are a mere drop in the bucket, at least in relative terms.

Figures compiled by this well-placed source – who asked not to be identified because of the sensitivity of the matter – show that in 2012, the last year for which they exist, industrial exports from the West Bank, Golan Heights and East Jerusalem to the European Union totaled $100 million, accounting for less than 1 percent of Israel’s total industrial exports to this huge trade bloc (excluding diamonds). Industrial exports from the West Bank, Golan Heights and East Jerusalem to the entire world totaled $250 million that year, accounting for slightly over half a percent of the total.

According to this source, the overwhelming majority of industrial exports from the settlements are not finished goods, but rather, components – pipes, tubes, spare parts and the likes. In other words, the type of merchandise that rarely finds its way onto supermarket or department store shelves, where it could be picked out easily by discerning consumers who pay attention to labels. 

Agricultural exports from the settlements to Europe, the source estimates, total no more than “a few million dollars.” Most of these are dates and grapes grown on kibbutzim and moshavim – different forms of cooperative settlement – in the Jordan Valley.

Of course, that assumes that the impact of 'labeling' can be limited to Judea, Samaria and 'east' Jerusalem products can be limited to products coming from those areas. As you already know, the goal of the BDS'ers is to boycott Israel entirely. And even Haaretz  is forced to admit that could well be result.

“From my talks with the Europeans, it would seem to me that they are looking for any possible way right now to shake up the status quo,” said Arie Arnon, a professor of economics at Ben Gurion University of the Negev, who specializes in the Palestinian-Israeli conflict. 

“Although the volume we’re talking about is extremely small,” he continued, ”the fear is that it will develop into something bigger. Some stores many not want to deal with the hassle of putting special labels on goods from the settlement, so they may just stop bringing in goods from Israel entirely. This could also develop into a secondary boycott, with European companies and consumers cutting off ties not only with businesses operating in the settlements, but also with those located inside Israel that are also active in the territories, like the banks."

According to the high-ranking foreign trade source, about 600 factories owned by Israelis operate in the West Bank.  In recent years, international pressure has forced several of the big exporters among them to move their production facilities inside Israel’s internationally recognized borders. These include the Barkan winemaker, the Bagel Bagel pretzel maker, the Swedish-owned Mult-T-Lock lock manufacturer, and most recently -- in wake of a huge international backlash—the  SodaStream seltzer machine maker.

This week, the Ahava skin care products manufacturer based near the Dead Sea, announced that it is contemplating setting up another factory near its existing facility but within Israel proper.
In 2006, Gush Shalom, the peace activist group headed by Uri Avnery, published a list of several hundred products made in areas beyond the Green Line.

Five years later, the Knesset passed the so-called “anti-boycott law,” which penalizes persons or organizations that call for a boycott of Israel or the settlements. Concerned that it might be sued for heavy damages under the law, Gush Shalom removed the list from its website. (An appeal by Gush Shalom and other organizations against the law was basically struck down earlier this year). 

...

Yarom Ariav, a former director-general of the Israeli Finance Ministry and senior executive at Israel Chemicals, one of the country’s largest exporters, said the new European directive, which has yet to be approved, is more symbolic than anything else. “In terms of the amount of damage to the economy, it’s negligible,” he noted, "although when it comes to individual exporters, it could definitely be significant.”

In Ariav’s view, the main danger of the new labeling decree is that it could trigger a chain reaction. “It could definitely cause the boycott movement against Israel to expand, and if there is no peace agreement on the horizon, I definitely see that happening,” he says. “There’s a dynamic involved here in which people get used to the idea of Israel and anything connected to Israel being considered tainted. The next phase could be an undeclared consumer boycott and then an all-out boycott.”

The impact of the labeling - if God Forbid it comes to pass - goes far beyond a few hundred thousand dollars in lost exports. Nazi Germany started on its way by boycotting Jewish businesses. If we start with labeling and it has no impact, no one really knows what will come next.