This position is clear and has been consistently upheld. The West Bank colonies were established in violation of Article 49 of the 1949 Fourth Geneva Convention, intended to protect civilians in time of war, including when they fall under foreign occupation. The EU maintains that the Geneva Convention provisions continue to apply to the territories Israel occupied in 1967, despite the long duration of the continuing occupation.

It is one thing to adhere to a legal and political stand on this issue, however, and quite another to take effective action on it. Opposition to the Israeli settlements should, at the very least, mean doing everything possible to discourage the creation of new settlements, and doing nothing that might serve to legitimize and entrench those that already exist. Yet a recent report indicates that the EU states are importing goods from the settlements, and thereby reinforcing them economically. Moreover, these imports far exceed those from the West Bank and Gaza Strip—by 15 times.

Trading Away Peace: How Europe Helps Sustain Illegal Israeli Settlements, released on Oct. 30, is a report prepared by a coalition of 22 NGOs, including Christian Aid (UK and Ireland), Church of Sweden, International Federation for Human Rights, Methodist Church in Britain, Norwegian People's Aid, Trocaire (an Irish organization) and the Council for Arab-British Understanding. Most of the NGOs are religious or development organizations. The report is based upon records of imports from Israeli settlements and from the West Bank and Gaza Strip.

A certain amount of detective work was necessary. The EU requires that settlement products should be clearly labeled to distinguish them from goods produced within Israel's 1967 borders, but it does not effectively enforce its own rules. This means that shoppers who are ready to buy Israeli produce but do not want to support the settlements may unknowingly be buying goods produced by the West Bank colonies.

Israeli government figures indicate that the EU imports 230 million euros ($300 million) worth of settlement products each year. In contrast, it imports a mere 15 million euros (less than $20 million) from the Palestinians. The disparity is emphasized when the difference in populations is taken into account. As the report notes, "With more than 4 million Palestinians and over 500,000 Israeli settlers living in the occupied territory, this means the EU imports over 100 times more per settler than per Palestinian."

This disparity is partly due to factors beyond the EU's control. Israel includes the settlements in its regional planning as though there are no borders to be respected within the areas under its control. They fall within the regions that have the highest priority development status, which means they receive generous grants. The settlements also benefit from government spending on infrastructure, such as the by-pass roads that go around Palestinian population centers, allowing settlers to pass speedily between the colonies and pre-1967 Israel with ease. The settlements and access roads were mostly built on land Israel declared to be state property, or acquired on spurious pretexts from its Palestinian owners, keeping their initial cost to their residents low.

By contrast, Palestinian development is restricted by tight Israeli regulation of freedom of movement, planning restrictions, lack of credit facilities, settler violence (including the destruction of olive trees and the blocking or seizure of wells) and Israeli military operations that have repeatedly wrecked Palestinian institutions, damaged infrastructure and discouraged foreign investment. Some farmers across whose lands the apartheid wall runs have great difficulties gaining access to parts or all of their lands.

Crucially, when it comes to agricultural products, settlements are provided a plentiful supply of water, while Palestinian water consumption is strictly limited and the construction of new wells by Palestinians to cope with a falling water table is almost never allowed. Agricultural goods exported to Europe from the settlements include dates, grapes, peppers, fresh herbs, avocados, citrus fruits, tomatoes, eggplants, cucumbers, potatoes and cut flowers—all of which Palestinians are perfectly capable of growing given a reliable water supply, and capable of selling when their products are not held up at checkpoints. The settlements clearly enjoy a trade advantage over the Palestinians of the West Bank that has been artificially created and sustained by subsidisation of the settlements and constriction of the Palestinian economy.

The EU is not obliged to accept this situation, however: there is much it could do to drastically reduce the extent to which settlements benefit from EU spending. For example, settlement products generally bear labels reading "Made in Israel." The drafters of the coalition report ask as a minimum that the EU insist that all settlement produce be clearly labeled to identify its origin as the settlements, so that consumers don't buy it unwittingly. Currently only Britain and Denmark have a policy of encouraging such identification. British voluntary guidelines introduced in 2009 advise that West Bank produce should be labeled as either "Israeli settlement produce" or as "Palestinian produce."

Among other measures the report calls for are excluding settlements from the benefits of bilateral agreements and cooperation programs, which should only apply to enterprises operating in territory recognized by EU countries as Israeli; actively discouraging corporate involvement in settlements; preventing financial transactions to settlements; and banning the importation of settlement products.

Many of the settlement products marketed in Europe without proper attribution will be familiar to American consumers: Ahava cosmetics, produced by a company based in the settlement of Mitzpe Shalem; SodaStream's carbonation devices, largely produced in the industrial zone of Ma'ale Adumim, the giant settlement built to the east of Jerusalem with the intention of sealing Israel's permanent hold on the city; and some of Keter's plastic garden furniture, which is produced in two settlement factories.

There has been a growing international campaign for the boycott of all Israeli products until Israel pulls out of the entire West Bank and Gaza Strip. The organizations and bodies that produced Trading Away Peace are careful to state, however, when they call for a ban on settlement products, that this "is not a ban or boycott on trade with Israel, which the signatories to this report do not advocate."

Efforts to cut off settlement trade with Europe may be expected to intensify. If they can be replicated elsewhere, the cost of maintaining the settlements might be made so heavy that Israel will have to stop building new settlements and withdraw from the existing ones as part of a comprehensive peace with the Palestinians.

John Gee is a free-lance journalist based in Singapore, and the author of Unequal Conflict: The Palestinians and Israel.

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