EU Settlement Product Rules Affirm Israel's Sovereignty, Not Legitimacy

European Union regulations requiring distinct labeling for products originating from Israeli settlements do not challenge Israel's fundamental legitimacy, but rather affirm its sovereignty, according to Sharon Pardo. While the direct economic impact of these rules on trade is expected to be minimal, as settlement goods constitute a small fraction of commerce, their significance lies in the legal and political message they convey.

Pardo argues that Israel cannot expect other nations to recognize territorial definitions it has not officially established itself. The complexity of enforcing these rules, given the interconnectedness of Israeli and settlement economies through shared raw materials, factories, and distribution networks, means they are unlikely to halt settlement expansion.

However, the author emphasizes that the EU's approach, rooted in European origin rules, has established a crucial precedent. These rules stipulate that agreements with Israel apply only to Israel proper, not to territories under its control. This principle has previously served as a foundation for product labeling, restrictions on European funding, and the exclusion of settlement-based entities from cooperation programs.

The core contribution of these European origin rules, Pardo contends, is not economic but legal and political. They reinforce the distinction between Israel and the territories it occupies, sending a clear message about sovereignty and international law.