Image Credit: ©Gulf News

Pro-Zionist and anti-Zionist politicians, policy-makers, researchers, analysts, and journalists, will all agree that Israel enjoys special treatment from the European Union. What they may all not know is that Israel is seeking to further ‘upgrade' its economic ties with Brussels.

The fact that Israel is even asking for an upgrade of its trade relations with the EU is in itself a success; and something that neighbouring Arab countries would do well to emulate despite and precisely because of the great opportunity created by the regional upheaval.

But Arab countries are far from competing with Israel regarding lucrative commerce with Brussels. To shed some light on the tremendous disparity in figures, some official digits from the European Commission archives are very revealing:

For example, the value of trade between the EU and Lebanon in 2009 was approximately €4.4 billion (Dh22.89 billion) with Brussels' imports worth €250 million and exports' worth €4.2 billion, making Lebanon the third-largest market for EU exports in the Middle East after Syria and the UAE.

Then there are figures for the Palestinians which reach an embarrassing €59 million total trade balance, completely lopsided, with the EU exporting €52 million and importing €7 million worth of Palestinian goods.

Israel, of course, maintains a monopoly on the Palestinian economy with additional taxes on all goods coming in and out of the Occupied Territories, and thus effectively makes a business out of the military occupation of Jerusalem and the West Bank.

And then there is Israel — the largest EU trading partner — with an initial trade balance of €20.2 billion that is substantially more equilibrated: the EU exports €11.4 billion to Israel and imports €8.8 billion worth of machinery, transport and technological equipment from Israel.


The EU agreed to incorporate Israel in the European Security Research Programme and Israel quickly gained the largest portion of the latest FP7 framework budget of €53 billion for the next seven years and became the biggest non-EU beneficiary of funds.

According to Ben Hayes from Statewatch, Israeli companies such as Israel Aerospace Industries (the state-owned manufacturer of drones), Motorola Israel (producer of ‘virtual-fences' around Jewish colonies) and the security intelligence company, Verint Systems, enjoy 12 out of the 58 EU ‘security research' projects.

Unlike its Arab neighbours, Israel also enjoys trade in services: the EU exports €3.7 billion of services to Israel, and imports €3 billion of services from Israel (2008). Moreover, foreign direct investment (FDI) between Israel and the European Union reached far into the billions.

FDI in Israel doubled between 2002 and 2008 — while former prime minister Ariel Sharon was constructing the ‘security fence/separation wall' and re-invading the West Bank. By 2007, EU investment in Israel amounted to €3.7 billion while Israel invested €6.3 billion in the EU, which may help explain Europe's posture towards the peace process.


Israel adroitly entered the European orbit at the beginning of the Barcelona Process with an EU-Israel Association Agreement in 1995 "establishing a partnership which provides for close and mutually beneficial trade and investment relations together with economic, social, financial, civil scientific, technological and cultural cooperation."

Within the framework of the 2004 European Neighbourhood Policy, the EU-Israel Action Plan went into effect in April 2005 and was extended again in June 2010 to "increase trade economic integration particularly with the EU, inter alia, by developing trade and investment flows, by liberalising trade in services […] promote cooperation in transport, energy and telecom networks." The EU Association Council with Israel agreed that relations should continue to be based on the current Action Plan, whose validity was extended until June 2011. According to the spokesperson for EU Enlargement and Neighbourhood Policy, "no new action plan or an upgrade is in sight at this stage."

Furthermore, the February 22, 2011, Association Council reiterated the EU's June 2009 position that an "upgrade of relations needs to be seen in the context of the resolution of the Israel-Palestinian context through the implementation of a two-state solution."

Lastly, the EU member states agreed to remain open to future cooperation with Israel, but according to the spokesperson, "substantial progress of the [Middle East Peace Process] MEPP remains an essential condition for moving forward concretely on bilateral relations."

The spokesperson for the Embassy of Israel in Brussels stated that the "conditionality is detrimental to both the EU and Israel" and that "the MEPP should not be so closely linked to bilateral EU-Israeli relations."

But it's about time some form of condition — even if it's a hypothetical condition for future relations — is iterated, if not imposed. Israel's special status of being an "EU member without being part of the institutions", as Javier Solana famously repeated, may be coming to an end.


Stuart Reigeluth is managing editor of Revolve magazine.