Mr. Hugh Lovatt:

I thank the committee for inviting us to speak. I am a senior policy fellow with the European Council on Foreign Relations, ECFR, based in London. I will deliver some brief remarks which build on our written submission to the committee. The submission was co-authored with my colleague, Mr. Konený, the director of the European Middle East Project in Brussels. We are talking today about trade between Ireland and Palestine. Above all this, however, is a story about trade with Israel and its settlements. Israel continues to pursue a decades-long policy of deepening its control over the occupied territories, expanding its settlement activities in contravention of international law and systematically violating the human rights and self-determination of the Palestinian people. This creates challenges for the EU and Ireland when it comes to trade not just with Palestinians but also with Israel.

These challenges have been compounded by Israel's de jureannexation of East Jerusalem in 1980 and its de facto annexation of the West Bank, which the Dáil has recognised. There is ample evidence that Israeli settlements are directly benefiting from financial relations with the EU and Ireland via the trading and business relationship with Israel. Left unchecked, this situation risks undermining Irish and EU efforts to place international law and respect for human rights at the centre of their foreign and trading relations and foreign policy. This risks pushing further away the prospect of an independent and viable Palestinian state, hurting the long-term prospects of reaching a sustainable peace between Israelis and Palestinians. It also compromises bilateral trade in respect of Israelis and Palestinians.

Against that backdrop, then, Ireland has an obligation to correctly align its external practices with its international law-based duties. We are of course aware of the Control of Economic Activity (Occupied Territories) Bill 2018 that is currently on hold. Working with its European partners, however, Ireland could be doing much more in this regard in the meantime. We argue that Ireland should become the champion of what has been called the EU’s "differentiation policy". This policy aims to fully and effectively exclude the occupied Palestinian territories, including the Israeli settlements illegally located in them, from the context of bilateral relations with Israel. Doing so can help to ensure that trade and business ties with Israel fully and effectively respect international law and United Nations Security Council Resolution 2334, which was passed in December 2016. This differentiation policy builds on well established legal principles that it is worth touching on briefly. The first is the duty of non-recognition of forcible acquisition of foreign territory. In the case of Israel, this includes the non-recognition of the domestic administrative regime which it has unlawfully extended to the settlements. In effect, Israel is treating those settlements as an integral part of sovereign Israel and seeking to reflect this in its bilateral trade policy. This duty of non-recognition has been embedded in the international legal order for nearly a century. It is, therefore, a well established principle and has played an important role in disincentivising wars and territorial conquest.

The second duty I touch upon is the duty of third states to ensure that they do not assist or provide material support in the maintenance of an internationally unlawful situation. In the case of Israel, this of course includes the expansion of illegal settlements, its annexation of Palestinian territory, whether de jure or de facto, the forcible dispossession and displacement of the Palestinian population in the occupied territories and the development by Israel since the beginning of this occupation in 1967 of a dual legal system that discriminates against Palestinians in the occupied territories to the benefit of their settler neighbours.

The third responsibility in this regard is to respect the internationally recognised right of self-determination of the Palestinian people within their territorial unit. This is, as will be recalled, the West Bank, including East Jerusalem, and the Gaza Strip. Differentiation is also based on the proper application of EU law and existing regulations and domestic public policy decisions. It is worth underlining that the goal of EU differentiation policy is first and foremost to protect the integrity of the EU’s domestic legal order from Israel’s internationally unlawful acts. In effect, this is concerned with erecting an EU legal firewall between Israel and the settlements. EU differentiation should not, therefore, be considered as a politically coercive action in the same way as sanctions or punitive measures. Differentiation recognises Israel within its internationally recognised borders based on the 1967 lines. By ensuring the correct implementation of international law and existing domestic requirements, however, it is true that EU trade can challenge Israel’s annexation of Palestinian territory. That annexation aims to erase any political or economic distinction between Israel and its settlements and treat them as an integral part of Israel. It is also important to note that these differentiation measures fall far short of what the EU has done in respect of Russia's occupation and annexation of Ukrainian territory.

By ensuring that bilateral relations with Israel neither recognise its illegal settlement activities nor allows it to benefit from them, Ireland and the EU can help defend the territorial basis for a future two-state solution and counter the current slide towards a one-state reality of unequal rights based on the permanent subjugation of Palestinians under Israeli military control. Undertaking this course of action would also support Palestinian economic prospects and statehood aspirations, which continue to be undermined by Israeli settlement activity. All this aligns with the recommendations made in the report recently published by the Joint Committee on Foreign Affairs and Defence.

As outlined in our written submission, differentiation has been applied in six main areas. I will not refer to them all now, but the details can be found in our written submission. They obviously focus a great deal on trade and business issues, while also extending into areas such as taxation, social security and research and development. While there has been some notable progress, many deficiencies remain. The EU's differentiation policy has not been applied coherently or enforced sufficiently by the EU as a whole or by its member states. Ireland has an opportunity to help rally like-minded states to ensure the full and effective implementation of differentiation measures across the spectrum of bilateral relations with Israel at both EU and national level.

I will finish by noting that Ireland has made substantial and positive progress in applying the EU's differentiation policy. We particularly welcome its public confirmation in January that its bilateral agreements with Israel do not apply to the territories occupied by Israel in 1967. This public confirmation is very important and good to have. However, there is far more to be done and there is no shortage of ideas. We have outlined some in our-----