France has become the first country to implement the European Union's direction to Israel to label products originating from Palestinian land occupied in the 1967 war as "made in settlements". The move has drawn Israel's ire. Earlier, Israeli politicians equated the move to Holocaust-era branding of Jews by Nazis.
While labelling products exported from the West Bank, Golan Heights and East Jerusalem can add to tensions between Israel and the European Union, it will also not affect the country much.
The products in question amount to less than 1 percent of Israel's $13 billion worth of annual exports to the European Union.
"The Israeli pushback is about trying to intimidate Europeans from not going further down this path," Daniel Levy, Middle East director at the European Council on Foreign Relations, told the New York Times. "The Israelis want this process to move as slowly as possible, because at a minimum it's a headache, and at a maximum, ultimately, it could be devastating."
As a fallout of the EU move, Israeli banks providing mortgage to people buying property in the West Bank could face divestment from Europe, and retail chains with outlets in settlements could be banned from Europe. Also, factories in settlements will have to label their products to export them to the European Union.
Israel's top exports are led by packaged chemicals, which include pesticides, fertilisers and beauty products, and represent 9.2 percent of the total exports of Israel, followed by refined petroleum, which accounts for 8.35 percent. Israel also exports integrated circuits, and diamonds.
The call for ban has given rise to speculation that settlers in the seized lands could lose the privilege of visa-free travel to Europe.
But if all countries go through with the labelling move, soon pesticides, beauty products and plastic items manufactured in the settlements could be seen with the "made in settlements" label in Europe.
