TEL AVIV // The Israeli government lambasted an unprecedented move by South Africa to label all products made in Jewish settlements in the occupied West Bank before selling them.
The South African decision, should it be implemented, would hand a considerable victory to a campaign by Palestinians and their supporters to boycott products made in Jewish settlements.
The South African move would be the first time that any country forces companies to inform consumers about which goods were produced in the settlements.
Denmark said on Saturday that it may take a similar step and analysts said other European Union countries may also follow suit, possibly hurting Israel's diplomatic ties with western allies and staining Israel's image among consumers in other countries.
Economic damage, according to analysts, is negligible since settlements' exports account for less than 2 per cent of Israel's total.
Experts say Israel is violating international law by not separately labelling products made within the country's internationally recognised borders and those produced in West Bank settlements.
"Israel's placing of a label 'made in Israel' on products made in the West Bank is fraud," said Neve Gordon, an Israeli political scientist and author of the book Israel's Occupation.
"The South African decision would force Israel to expose its lie."
Last week, the South African government published a statement by Trade Minister Rob Davies saying the state would require merchants "not to incorrectly label products that originate from the Occupied Palestinian Territory as products of Israel."
The statement, which did not detail what would be written on labels of settlement-made products, said the goods include some cosmetic brands, technology products and soft drinks.
The decision is subject to objections from the public until the end of June.
Palestinian officials welcomed South Africa's move. Ghassan Khatib, a spokesman for the Palestinian Authority, said: "This is based on a proper understanding of the illegality of settlements and their products. We hope that this will be followed by other countries."
Israeli officials and settler leaders reacted with anger, with the foreign ministry saying it would call in the South African ambassador to protest the move. Israeli officials yesterday also said they would apply diplomatic pressure on the South African government from the Israeli embassy in Pretoria.
Yigal Palmor, a foreign ministry spokesman in Jerusalem, told The National that the South African decision would be a precedent because it would bind companies to label settlement products.
According to Mr Palmor, a similar move by the British government in 2009 merely recommended to retailers to differentiate between Israeli and settlement products, and at least one UK supermarket chain has heeded the call.
Mr Palmor said that Israeli products as a whole "will be harmed by this measure" because South African retailers may falsely label products made within Israel proper as settlement goods. "There are no criteria, there is confusion and there will be a lot of collateral damage," he said.
Danny Dayan, head of the Yesha council, the umbrella group representing the settlements, blasted Mr Davies - who is Jewish - as a left-wing extremist seeking to harm Israel and added: "This proves again that Jews from the extreme left are conducting with great joy a propaganda campaign against Israel."
Palestinian campaigners have for years lobbied Israel's western allies to boycott products made in settlements in a bid to inflict economic and diplomatic damage on Israel and pressure the country to evacuate the Palestinian territory.
Aside from the UK guideline in 2009, another symbolic boost to their campaign emerged with a court order in the European Union - Israel's biggest trade partner - to exclude goods from the settlements from a customs duty exemption granted to all Israeli products.
Analysts say the EU decision is problematic because it relies on Israel labelling settlement products with the postcodes of the companies that exported them.
Some of those firms, however, have their headquarters within Israel proper and can therefore still obtain the duty exemptions for products they make in settlements. Furthermore, the postal-code labelling does not enable EU shoppers to distinguish between Israeli and settlement goods.
The South African move would make it the first country to "empower consumers to decide whether to buy West Bank products", Mr Gordon said.
He added that Israel has removed any incentive for companies to shift away from the West Bank by creating a fund that compensates settlements-based firms that may be financially hurt from the EU's ruling - and could add those affected by the South African decision as well.
On Saturday, the Danish foreign minister, Villy Sovndal, told the Danish Politiken newspaper that the country would stop labelling products from settlements as ones made in Israel.
He said: "This is a step that clearly shows consumers that the products are produced under conditions that not only the Danish government but also European governments do not approve of."
foreign.desk@thenational.ae
