Setting the Record Straight (again) on U.S. Labeling Policy [UPDATED*]

Yesterday, Israeli media reported on a blockbuster report alleging that the Obama Administration is lying when it says U.S. policy regarding the labeling of products from West Bank settlements hasn't changed since 1995, and alleging that the policy reiterated last month in a statement issued by the U.S. Customs Service (CBP), in fact, represents a change in U.S. policy.

These allegations rest on a “smoking gun,” unearthed by the intrepid researchers at a right-wing Israeli non-governmental organization called the Legal Forum for Israel, in the form of a 1995 document issued by CBP.  The Legal Forum for Israel alleges that the document proves that U.S. labeling policy since 1995, according to which exports from the West Bank cannot be labeled as made in Israel, applied only to those areas of the West Bank under Palestinian self-rule in 1995. The NGO insists that the “reminder” of the policy issued by CBP in January 2016, which stated that labeling rules apply to the entire West Bank, thus clearly represents a (stealth) shift in U.S. policy.

Is this document, in fact, a smoking gun? Not in the slightest.

In fact, the document in question -- while it was indeed published by CBP and it indeed includes the words “West Bank,” “Gaza” and “Palestinians" -- has nothing at all to do with, and no bearing on, U.S. country-of-origin labeling rules.

Extending Trade Benefits to the Palestinians

On March 17, 1995, as part of U.S. efforts to support the Israeli-Palestinian peace process, President Clinton extended Generalized System of Preferences (GSP) to the West Bank and Gaza.  GSP is a U.S. program designed to,

provide opportunities for many of the world’s poorest countries to use trade to grow their economies and climb out of poverty.

President Clinton’s message informing Congress of his intent to extend GSP to the West Bank states explicitly that the extension of GSP applies,

only to goods produced in the areas for which arrangements are being established for Palestinian Interim Self-Government, as set forth in Articles, I, III, and IV of the Declaration of Principles on Interim Self-Government.

[UPDATED] While it remains to be clarified where, in practice, the U.S. applies GSP with respect to the Palestinians, there is nothing contained in in the articles of the Declaration of Principles (DOP) President Clinton cited in his statement that would suggest his intent was anything other than to apply GSP to the entirety of the West Bank and Gaza, except for, as per the agreed minutes to the DOP, "Issues that will be negotiated in the permanent status negotiations: Jerusalem, settlements, military locations, and Israelis." The relevant articles of the DOP state,

ARTICLE I - AIM OF THE NEGOTIATIONS

The aim of the Israeli-Palestinian negotiations within the current Middle East peace process is, among other things, to establish a Palestinian Interim Self-Government Authority, the elected Council (the "Council"), for the Palestinian people in the West Bank and the Gaza Strip, for a transitional period not exceeding five years, leading to a permanent settlement based on Security Council Resolutions 242 and 338. It is understood that the interim arrangements are an integral part of the whole peace process and that the negotiations on the permanent status will lead to the implementation of Security Council Resolutions 242 and 338.

 ARTICLE III – ELECTIONS

  1. In order that the Palestinian people in the West Bank and Gaza Strip may govern themselves according to democratic principles, direct, free and general political elections will be held for the Council under agreed supervision and international observation, while the Palestinian police will ensure public order.
  2. An agreement will be concluded on the exact mode and conditions of the elections in accordance with the protocol attached as Annex I, with the goal of holding the elections not later than nine months after the entry into force of this Declaration of Principles.
  3. These elections will constitute a significant interim preparatory step toward the realization of the legitimate rights of the Palestinian people and their just requirements.

ARTICLE IV - JURISDICTION

Jurisdiction of the Council will cover West Bank and Gaza Strip territory, except for issues that will be negotiated in the permanent status negotiations. The two sides view the West Bank and the Gaza Strip as a single territorial unit, whose integrity will be preserved during the interim period.

On March 27, 1995, pursuant to the president's declaration, CBP issued the “smoking gun” document uncovered by the dogged investigators from the Legal Forum for Israel. But this is no smoking gun. Rather, it is simply a reiteration, almost word-for-word, of the policy announced by the president extending GSP to these areas of the West Bank and Gaza, and limiting this extension to areas under Palestinian self-rule.

Notably, neither the President’s announcement nor the CBP document echoing his announcement say anything about labeling – because GSP has nothing to do with labeling.  GSP is about specific trade benefits. Policies related to country of origin labeling requirements are completely separate from GSP, and by law are promulgated neither by the President nor by CBP. Rather, such policies, under U.S. law  (19 U.S. Code § 1304, first para), are set by the Secretary of the Treasury. 

Labeling

Prior to the onset of the Oslo peace process, U.S. regulations required goods produced in the West Bank and Gaza to have the point of origin labeled "Israel," or “Product of Israel,” or "Israeli-Occupied West Bank (or Gaza),” or words of similar meaning. This reflected a determination that, for the purposes of labeling goods as required under 19 U.S. Code § 1304,

the designation ‘West Bank’ is not an acceptable country of origin marking because the United States does not recognize the West Bank territory as an independent political entity.

[UPDATED] This regulation first changed in 1994, in the context of the Olso process, with this CBP notice, dated 11/23/94, which  permitted goods exported to the U.S. from the West Bank and Gaza to be labeled, for the first time, as made in the West Bank and Gaza, and noted that prior rulings regarding labeling such products as made in Israel were being considered for modification or revocation.

In 1995, this labeling rules were further changed, again in the context of the Oslo process.  The new regulation required that:

...unless excepted from marking, goods which are produced in the territorial areas known as the West Bank or Gaza Strip shall be marked as “West Bank,” “Gaza,”  or “Gaza Strip” in accordance with the requirements of 19 U.S.C. 1304 and 19 CFR Part 134, and shall not contain the words “Israel,” “Made in Israel,” “Occupied Territories-Israel,”  or words of similar meaning.

This regulation was further updated in 1997, to reflect the fact that under Oslo the West Bank and Gaza are to be treated as single territorial unit, as follows:

Pursuant to the request of the Department of State, this document notifies the public that acceptable country of origin markings for goods produced in the territorial areas known as the West Bank or Gaza Strip consist of the following: “West Bank/Gaza,” “West Bank/Gaza Strip,” “West Bank and Gaza,” “‘West Bank and Gaza Strip,” “West Bank,” “Gaza,” and “Gaza Strip.”

On January 23, 2016, CBP issued a reminder of the policy adopted in 1995 and updated in 1997. This was not a declaration of a new labeling policy (any such declaration would have to come from the Department of Treasury, not CBP). It was merely a reminder of the existing policy, apparently provoked by inquiries that indicated that the existing law was not being respected.

Final Thoughts

In short, there is no smoking gun. Under regulations adopted in 1995 and updated in 1997, U.S. policy regarding exports coming from the West Bank is clear: whether products are made by Palestinians in Ramallah and or by settlers in the neighboring settlement of Psagot, they cannot be marked “made in Israel,” but, instead, must be labeled as made in the “West Bank/Gaza,” “West Bank/Gaza Strip,” “West Bank and Gaza,” “West Bank and Gaza Strip,” or “West Bank.”

The fact that this regulation was issued not once but twice (the second time with an update to reflect additional Palestinian concerns) indicates that this formulation was in no way accidental.

The fact that neither Israel nor any self-appointed advocate of Israel took issue with this policy at any time over the past 20 years (until now) indicates that it was in no way controversial (until the ongoing manufactured controversy).

In fact, the real question here isn’t whether U.S. policy has changed – it demonstrably has not – but why settler advocates are only now on the labeling warpath. Part of the answer lies, no doubt, in settler fears about Europe’s new policy requiring clear differentiation between goods made in Israel and those made in settlements. Another part may lie in the settlers’ belief that, given questions now being raised about whether they have long been flouting the labeling law, the best defense is a good offense.

More ominously, the rest of the answer may well be found in the ongoing campaign at the federal and state level to exploit concerns about the boycott, divestment, and sanctions movement in order to pass laws reversing 48 years of U.S. opposition to settlements. In the context of this campaign, returning the U.S. to the pre-Oslo labeling policy – which would permit the de facto treatment of the West Bank as part of Israel – would be a major coup indeed.

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*This post was updated 2/18/16 to add new information regarding the 1994 CBP notice on labeling, and to add details about the Declaration of Principles and what it means for how widely GSP was applied in the West Bank.

For further information, see: Settlement Product Labeling Policies, U.S. vs. EU

 

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