Politics prevails – Israel’s trade relations with the European Union
Politics prevails – Israel’s trade relations with the European Union

Author(s): Karolina Zielińska
Subject(s): Economic policy, Government/Political systems, International relations/trade, Political behavior, Comparative politics, EU-Accession / EU-DEvelopment, Peace and Conflict Studies
Published by: OSW Ośrodek Studiów Wschodnich im. Marka Karpia
Keywords: Israel; trade relations; EU; Israel and Palestine conflict; Political obstacles;
Summary/Abstract: The European Union’s trade relations with Israel are asymmetrical, but the overall volume of their trade in goods and services has been growing rapidly. The EU is Israel’s top partner in this field, while Israel ranks outside the top 30 of the EU’s biggest partners; the EU has a positive trade balance with this country. This state of affairs has turned trade into a potential political instrument, but its assertive use by the EU with respect to the Palestinian issue has failed to bring about any change in Israel’s policy towards the occupied territories. Instead, Israel’s resistance to the EU’s policy on this issue has led to a freeze in the institutional development of trade relations, especially in the services and investment sectors. The EU and especially Israel could benefit from a further liberalisation in bilateral relations and its extension to their partners in the region, but political factors are hampering this process. Therefore, a breakthrough in the form of launching negotiations on an agreement to create a deep and comprehensive free trade area appears unlikely in the foreseeable future.

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