Product Labels Aren’t the Place for the EU to Play Politics

(Bloomberg Opinion) -- Europe’s highest court soon will rule on whether goods produced by Israeli settlements in disputed territories should be specially labeled as such. Though no date for the final ruling has been set, it’s already making waves in the U.S. 

“Mandatory labeling of all Jewish products,” Senator Ted Cruz tweeted on Monday. “What could possibly go wrong?” Retweeted 5,000 times and “liked” 15,600 times, this was Cruz’s reaction to a post on the conservative political blog RedState, which the senator appears to have misunderstood. It discusses an opinion issued in June by Gerard Hogan, an advocate general at the European Court of Justice. Hogan recommended that the court, whose rulings are final for all European Union member states, affirm the requirement that all products made in “a territory occupied by Israel since 1967” should be labeled to show their geographic origin and “where it is the case, the indication that the product comes from an Israeli settlement.”

This doesn’t, of course, amount to “mandatory labeling of all Jewish products,” but if the ECJ affirms the advocate general’s recommendation, as it does in most cases, it – and the EU in general – inevitably will be accused of anti-Semitism. After all, such a ruling would effectively require products from the same geographical area to be labeled differently, according to whether they were made by Jewish settlers or by Muslims living under the Palestinian Authority. 

That outcome would be appalling for a bloc formed, in part, to right the wrongs committed by some of its member states against Jews. The EU would be rightly seen as aiding a boycott of Jewish products, not just those made in certain localities.

On the other hand, Hogan, a venerable Irish judge with a reputation as a human rights defender, made a valid point about European geographic labeling rules. He wrote that some European consumers want to make ethics-based choices when they buy products, and it’s not the court’s business to judge these choices. By this logic, all that European regulators should do is make sure product labeling is not misleading. And since the territories in question aren’t universally recognized as Israeli ones (Hogan, for his part, states unequivocally that their occupation violates international law), “Made in Israel” is a misleading designation for their products.

There’s a way out of the dilemma for the court, but not for the EU.

The court could reject Hogan’s argument altogether on formal grounds: EU rules don’t specifically call for labels to name the actual village where the product was made. Or it could go for an indication of the geographic area (such as “the West Bank”) without discriminating between Jewish and Arab towns. That would perhaps make boycotters think a little harder about the region’s economic realities. They might balk at hurting Arab producers on the West Bank (whose direct export to the EU is, by the way, tiny – just 16 million euros worth in 2017) and the thousands of Arab workers employed by Jewish-run businesses there.

But neither of these potential outcomes would address a broader issue. The EU takes part in various embargoes directed at specific territories whose status it doesn’t recognize. For example, it limits direct imports from Northern Cyprus, recognized only by Turkey as a separate state. Imports from Russian-occupied Crimea also are officially banned. I’m 100% certain, however, that products from both regions find their way to European markets – through Turkey and Russia, where they’re labeled so as to evade the embargoes.

There’s essentially no way for the EU to enforce labeling rules for West Bank goods, either, if Israel doesn’t help with it. When the European Commission first attempted to impose such labeling in 2015 by issuing an interpretative note to its consumer protection standards, few member-states amended their own rules to comply with this interpretation. (France did, and the case before the ECJ, brought by an Israeli wine producer and a Jewish organization, stems from that country.) Merchants, of course, could try to apply the EU interpretation without being ordered to do so by the national government, but an attempt to do so backfired for the German retailer KaDeWe Group GmbH: A public outcry made it reconsider. So in effect, the commission failed to enforce the labeling rules.

If the EU generally supports trade restrictions based on political considerations, it should allow its citizens to make such choices, too. But then it also should be able to enforce these restrictions, both on its own behalf and on behalf of its citizens. That’s not really the case; the EU could conceivably only force the relabeling of certain goods whose sales depend on their being from a certain locality, such as wines. In most other cases, the exporter could put any of its home country’s regions on the label and no one would be the wiser. 

European regulators should decide how serious they are about product labeling requirements for conflict-riven and disputed regions. If they want to be serious, they need to figure out ways to enforce their rules in all related cases. Otherwise, the EU should just keep out of the boycott and partial embargo business altogether. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.

©2019 Bloomberg L.P.

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