Israel is fuming after a European Union decision classifies parts of the city of Modiin as outside of Israel proper. Modiin is a commuter city, established in 1993, halfway between Jerusalem and Tel Aviv along Highway 443. In 2003, it merged with the nearby towns of Maccabim and Reut and today has a population of around 75,000. Some parts of Modiin were apparently built on what was considered no-man's land between Israel and Jordan from 1948 to 1967. The area was never officially recognized as part of Israel. On Tuesday, the EU published a list of Israeli settlements that are not recognized as part of Israel, therefore making them ineligible for tax breaks on exports to EU member countries. The municipality of Modiin-Maccabim-Reut appeared on the list for the first time. Under the EU-Israel free trade agreement, Israeli products are entitled to duty-free entry into the EU, but since 2005, Israeli exporters must list zip codes and the name of the place where the goods were manufactured, as areas over the Green Line are not covered by the agreement. Goods produced in zip codes beyond the Green Line have to pay full EU import duties, making them more expensive and less competitive in the European market. The list also includes areas such as the Golan Heights, Judea and Samaria and east Jerusalem as ineligible for the tax breaks. A European Union official stressed to Israel Radio on Wednesday morning that the latest amendment to the list only refers to a small area of Maccabim that is located beyond the Green Line. Israel's Foreign Ministry published a harsh response to the decision, saying, "For anyone who deals in reality, there is not the slightest doubt that the Modiin, Maccabim and Reut localities are an integral part of the State of Israel, and their future is not in question. The EU ignores reality when it extends the domain of conflict to places and issues that do not belong there." The statement also reveals that Israel and the EU had been negotiating about the inclusion of parts of Modiin in the list. "By the unilateral publication of the locations list on the Internet, the EU has unacceptably cut off a negotiating process regarding this very issue," said the statement, which added that the Israeli Mission to the EU has launched an official protest to Brussels over the decision. The Foreign Ministry also said that it takes issue with the other locations mentioned in the EU list, and that there is an ongoing diplomatic exchange between the sides about the issue. The Ministry of Industry, Trade and Labor said Tuesday that the decision does not present a major change to the existing framework of the tax agreement between the EU and Israel. It also stated that "as far as we are aware, there is no export to Europe from the zip codes that have been added." Mayor of Modiin-Maccabim-Reut Haim Bibas said Tuesday that "this is a bad decision that does not reflect the reality on the ground. Modiin-Maccabim-Reut is an integral part of the State of Israel and therefore the decision is unacceptable, and it is disappointing that this is the EU's approach to Israel on the whole, and the city in particular." Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, also criticized the decision saying it, "gnaws away at the very fabric of the relationship between Israel and the EU. It is very surprising that during a period where the EU has weighty issues to deal with, it finds the time to deal with such a petty issue." Public Diplomacy and Diaspora Affairs Minister Yuli Edelstein quipped, "If Modiin isn't part of Israel, then the EU isn't part of reality! It seems that as far as the EU is concerned, Tel Aviv and Itamar, Modiin and Beit El are all built on illegitimate ground. Anyone who advocates a boycott will be boycotted in the end," and added that he hoped the EU would stop its efforts to erode Israeli sovereignty.
