Not many Europeans have heard about European Commission Foreign Affairs Directorate (FoNet) deputy director-general manager Michael Leigh, but he is a very important person. His prosaic title covers a difficult task Leigh is the man charged with guaranteeing that countries slated for European Union (EU) membership in May 2004 will not disturb general European tranquility, sound off too much, engage in noisy quarrels, or dirty the general common courtyard.
The problem with Europe is that starting in May 2004, the EU's borders will move eastward and southward. When the EU members find themselves with Moldavia, Russia, Israel, Jordan, and Morocco as neighbors, concern is aroused about breaches of the peace, damage to the environment, and disturbances in many other aspects of life according to the European Commission. The European Commission’s solution was to persuade the new neighbors to adopt EU laws and regulations; the reward for that will be entry into the EU itself.
Leigh came to Israel yesterday for what are described as talks on setting a timetable for negotiations over Israel’s membership in greater Europe. In simple language, Israeli and the EU are to negotiate on how Israel will adopt European legislation and regulation, in whole or in part, and at what rate.
In exchange, Israel will benefit from all the freedoms granted to European citizens and companies: free movement of goods, free trade in services, freedom of capital movement, and free movement of people. That means that lawyers and accountants will not be the only Israelis entitled to stand in the EU citizens line at European airports.
What it costs
That’s all very well, until you consider the consequences for Israel of joining the EU, including the basic freedoms it entails. When the EU talks about adopting legislation and regulation, it is referring to regulations involving, among other things, human rights, and it can be assumed that its opinion is that Israeli policy on the Palestinians does not conform to those rules.
In addition to the political problem, difficult economic problems also exist. Free movement of goods, for example, is accompanied by very demanding regulation concerning encouragement of capital investment. A large proportion of Israel’s investment encouragement policy is illegal under EU rules. There are also very severe environmental regulations. Israeli industry will find it hard to conform to these rules; a difficult adjustment process will be necessary.
A particularly thorny problem in the Israel-EU negotiations concerns standards. Israel is being asked to adopt EU standards, while it is by no means clear whether European standards institutes will be the ones to determine to what degree Israeli industry is meeting the requirements. It is not clear how Israeli industry, a considerable proportion of whose exports are to the US, will be able to adopt the European standard exclusively, at the risk of some loss of markets in the Asia and North America.
No less complex problems exist in free trade in services. While the opening of the EU market to Israeli professionals will be quite advantageous for Israel, free trade in services also means that the Israel Bar Association and the Institute of Certified Public Accountants in Israel will lose their status as the only bodies authorized to determine who can be a lawyer and an accountant in Israel.
At the same time, Israeli financial institutions will have to compete against European institutions for Israeli households and companies. What will happen when European insurance companies can sell insurance and pensions to Israelis, and European brokers can operate freely, can only be imagined.
The negotiations on the free movement of capital are liable to break down when the EU makes it clear to Israel that this entails giving any European concern the opportunity to invest in Israel under the same terms as granted to Israelis. In other words, European citizens and companies can buy land, just like Israelis.
Another problem, perhaps the most difficult, concerns the free movement of people. All European citizens will be able to enter Israel and reside there as they see fit, work there, and make Israel their home. For Israeli policy, this is a red line, and it is hard to see how Israeli representatives will be able to come to an agreement on this point.
The political leadership will eventually have to approve this entire package. The problem is that these people are involved in disputes between themselves. There have been conflicts based on personal ambitions in the very recent past. An obvious example is Minister of Foreign Affairs Silvan Shalom and Minister of Industry, Trade, and Labor Ehud Olmert, who will have to play key roles in the approval of any understanding reached with the European Commission.
Disputes between Israelis and Europeans, and between Israelis themselves, will almost inevitably surface in the near future, when the two sides try to establish a work plan for achieving progress towards Israel membership in the EU and adoption of EU legislation. With a little luck, no politicians will seize the opportunity to accumulate political capital by attacking the very idea of growing closer to Europe.
Keeping the preparations a secret
In Israel, a small group of senior officials in the Ministries of Foreign Affairs; Finance; Industry, Trade, and Labor; and Justice have begun surveying Israeli legislation, and considering to what degree these laws can be made to resemble the corresponding laws in the EU.
The officials are keeping mum on the results of their survey, in order to achieve better results in the negotiations. The real job of these officials, however, will be to convince the political leadership that the whole maneuver is necessary, and that globalization has deprived Israel of the luxury of refusing the EU offer. The world is rapidly splitting into trade blocs, later to become economic groupings, and Israel cannot allow itself to remain on the outside, particularly when other countries in the Middle East are joining the expanded EU.
A key word in the negotiations between Israel and the EU is time. Israel can accept a considerable part of the EU demands, but it will take time to prepare the Israeli economy and society for the proposed changes. Israel will try to obtain very long transition periods in which to apply the necessary changes; some are talking about as much as 20 years. It can be assumed that this is the minimum period required to persuade various interests not to aggressively oppose the entire plan.
The question is whether this acceptable to the EU, and whether the EU will fear setting a dangerous precedent for other countries with which it is negotiating. It can be assumed that Israel will eventually have to accept a comprehensive European plan: if not in full, then the main points. All that remains is the struggle to determine how long it will take to implement it.
Published by Globes [online] - www.globes.co.il - on December 17, 2003