Sharon Pardo

In January 2005, the European Union (EU) decided to implement fully the rules of origin (ROO) clause (Pardo and Peters, 2012, Doc. 5/12)1 of the 1995 European Community (EC)-Israel Association Agreement (Doc. 4/23) and to subject products manufactured in the territories Israel had occupied during the 1967 war to customs duty. The EU’s decision spurred a scholarly debate about its legal basis (Hirsch, 1998, 2002–2003; Paasivirta, 1999; Hauswaldt, 2003; Zemer and Pardo, 2003; Aoun, 2003; Harpaz, 2004; Pardo and Peters, 2010), the implications it would likely have on Europe’s normative positions (Harpaz, 2008; Harpaz and Rubinson, 2010; Pardo and Zemer, 2011), and on whether it is consistent with the EU’s policies involving rules of origin in other regions (Pardo and Zemer, 2011; Rubinson, 2011). Surprisingly, though, no one has examined the actual economic and political implications of applying the ROO on Israeli products manufactured in the Jewish settlements in the occupied West Bank and the Golan Heights.2 Put differently, the implementation of the ROO is the EU’s attempt to use technical customs rules to reassert the Green Line, and it is important to determine whether the effort to redraw an international border — that the Israeli government has wittingly tried to erase — has actually had an impact on Israeli industry in the occupied territories (OT) or on Israel’s settlement policies.