Targeting Israel, Hitting Palestinians

Evelyn Gordon
Contentions/Commentary
26 February '10
Posted before Shabbat

A ruling by the European Union’s highest court yesterday is a perfect example of the law of unintended consequences. The court ruled that the EU’s free trade agreement with Israel does not apply to the West Bank, and therefore, goods made by Israeli firms in the West Bank are subject to EU import taxes.

Legally speaking, it’s hard to quarrel with the ruling: even Israeli law doesn’t view the West Bank as Israeli, as it does East Jerusalem and the Golan Heights. But for years, European countries ignored this detail and exempted Israeli firms in the territories from import duties. What has changed is not the law but the politics: seeking to persuade Israelis that “the occupation” doesn’t pay, EU countries recently began taxing such imports. A German importer then sued his country’s tax authorities, prompting yesterday’s verdict.

But as the Associated Press noted, the biggest victims may well be not Israelis but Palestinians. Many Israeli firms moved to the West Bank because they could export to the EU duty-free while also benefiting from cheaper Palestinian labor. Thus, if the new import taxes lower these firms’ profits, hundreds of Palestinians could lose their jobs. And because “Palestinians are largely barred from working in Israel and have few job opportunities in the Palestinian-controlled areas of the West Bank, jobs in settlement factories are sought after.”

(Read full article)
.