EU-Israel Frozen Trade Relations: Sanctioning Without Sanctions?

Abstract

In the context of the Israel-Palestinian conflict, the European Union (EU) is critical of the State of Israel, of Israel’s settlement policy, and recently of the manner in which Israel was conducting the war in Gaza (2023-), yet it has refrained until now from adopting trade sanctions against Israel. This article argues that despite the lack of such formal, affirmative sanctions, which is due to its political inability to reach a common position among the Member States, the EU does in fact sanction Israel without sanctions: it has neglected to revise and upgrade the 1995 EU-Israel Association Agreement. This omission is based on the linkage created by the EU between the (non)-advancement by Israel towards the resolution of the Israeli-Palestinian conflict and the (non)-upgrading of EU-Israel trade relations. This linkage, and the resulting freezing of the potential upgrade of the Association Agreement, exact an economic price on Israel’s economy, which loses trade benefits that it could have enjoyed under a revised and upgraded trade agreement. The non-evolution of the EU’s normative trade framework with Israel due to non-economic consideration is tantamount, in light of real-world economic developments, to sanctioning Israel’s political policies relating to Palestine and Palestinians. This conclusion may be applicable to other EU trading partners who breach fundamental EU norms. It remains to be seen whether severe criticism of Israel’s military actions in its war with Hamas would cause the EU to adopt a more proactive stance, resulting in affirmative trade sanctions.