A single EU country really has no possibility of suspending trade agreements with Israel, as, since 2000, Israel has had a set of trade association agreements with the EU as a whole. Under these agreements, Israel is involved in a ramified network of economic cooperation plans with the EU, and participates in a large number of European programs.
The trade agreements were approved by all 27 member states of the EU, and any change to them requires approval by the European Parliament. Therefore, a boycott by one country or a group of countries is highly problematic not just politically, but legally too.
In the past, there have been several boycott initiatives by various organizations in Europe; they generally fell because of the economic interest that many European countries have in trade with Israel. The economic interest generally stems from Israel's advantages in technology fields and in infrastructure ventures.
Recently, however, voices opposing Israeli policy have become louder in Europe, and there have been calls for steps to be taken against her. The main source of opposition is in the European Parliament, where there are pressure groups that promote measures against Israel. These groups are backed by, among others, the EU High Representative for Foreign Affairs and Security Policy, Catherine Ashton, who has on several occasions expressed firm opposition to Israeli policy, especially to settlements in the disputed territories.
But the main danger to Israel does not lie here, but in approval of future programs in which Israel is interested in participating. Given the tension between Israel and the EU over the settlements issue, it is doubtful whether these programs will gain approval.
There are two main programs: trade agreements between Israel and the Mediterranean basin countries; and research and development agreements with the EU.
The EU is working on drafting the next generation of trade agreements between Israel and the Mediterranean basin countries. If the European Parliament fails to approve the upgrading of the existing agreements, Israel's trade is liable to be harmed, and other allied agreements will be hit as the validity of the existing agreements expires.
The research and development agreements, under the Seventh Framework Programme, of which Israel is a member, are due to be replaced in the near future by the Horizon 2020 programme. At present, Israel's chances of being included in this programme are falling as the gap between Israel and the EU widens. There is considerable opposition among left-wing parties in Europe, which is liable to affect the European Parliament's decisions.
Published by Globes [online], Israel business news - www.globes-online.com - on December 3, 2012
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