Brussels / Jerusalem, 26/07/2001 (Agence Europe) - The Euro-Israeli customs cooperation committee, which met for the first time in Jerusalem on Monday and Tuesday, was not able to overcome the controversy surrounding the application of the "Made in Israel" status- and hence preferential access under the bilateral agreement - for products originating in the West Bank, the Gaza Strip and the Golan Heights. A new meeting is scheduled but the tone on both sides has become harsher.
If by the end of October - the deadline for holding the next meeting of the joint committee - "no practical solution has been found, the question will be referred to the appropriate body under the Association Agreement". A solution evoked in a short phrase, at the end of the press release published by the European Commission, which causes a stir in Israel. "The EU threatens to tax goods from the territories", was the headline of the Israeli English-language daily, The Jerusalem Post, on Wednesday. The daily stressed that the cost could not simply be summarised as the rise in customs duties on some $250 to 300 million worth of exports annually but worse than that - the imposition of customs borders between Israel and the Palestinian Authority by the EU could create a de facto situation on the ground that would not be welcomed from the diplomatic point of view. Moti Ayalon, Director for Customs and VAT, who chairs the joint committee, described the European attitude as "draconian", saying that no-one, whether it be the Treasury or another governmental body, will be able to tolerate Israeli trade being affected.
The stance taken by the European Commission since 1998 and reaffirmed at the beginning of the week consists in refusing the certification of origin, "Made in Israel", for products manufactured in regions which were not administered by the Hebrew State before the Six Day War in 1967. Israel also stuck firmly to another interpretation of the 1975 bilateral agreement, considering that all trade between the territories and the EU should be eligible for preferential treatment. Obviously concerned about avoiding any escalation and circumventing the political aspect, which is extremely sensitive, on this issue (Ed.: the borders of Israel), the joint committee stopped there and agreed to "explore the practical solutions" during its next meeting, which will be informal and technical.