EU Reconsiders Trade Deal With Israel | Armstrong Economics

The Netherlands is demanding that the EU review its trade deal with Israel amidst the war on Gaza. Dutch foreign minister Caspar Veldkamp believes Israel is violating Article 2 of the EU-Israel association agreement, which states their partnership is dependent on upholding human rights and democracy. Veldkamp penned a letter to Kaja Kallas, stating that denying Gaza aid since March 18 has been against the “principles of neutrality, impartiality and independence.”
“You cannot starve the people of the Gaza Strip. It is against international law. It’s morally wrong. It’s dangerous. I don’t think it’s in Israel’s own interest,” he stated in his letter, in which he also states there is a “very slim” chance of a ceasefire. “I don’t have any illusions that Hamas will ever apply international humanitarian law, but from a democracy such as Israel, democracies fight differently, and Israel has to abide by international humanitarian law, and with the latest statements by Israeli ministers, such as minister Smotrich that he aims for a total destruction of the Gaza strip, we cannot ignore any longer such statements.
“We support the Palestinian Authority and its return to Gaza. We support the return of every displaced Palestinian for whom Gaza is their home.,” Kallas stated in a press conference this February. “When the time comes the European Union will also support Gaza’s reconstruction together with the regional actors. Palestinians must be able to live in Gaza. At the same time, Gaza must never be again a terror haven.”
Israel has attempted to remain neutral in the Ukraine war, but in February 2025, it voted against a United Nations resolution that reaffirmed Ukraine’s territorial integrity, stating they were supporting the United States’ stance. Israel has been accused of supporting Russia, although it attempted to provide some military aid to Ukraine through a deal with the US. Kaja Kallas believes Donald Trump has aligned himself with Putin and has even suggested he be removed as the president of the United States. To Kallas, Trump is standing in the way of the neocon’s dream of finally embarking on the next world war.
Brussels has attempted to remain neutral on the Israel-Palestine conflict. Member states are in disagreement. Nations like Spain and Ireland have criticized Israel’s approach while those like Hungary and Germany have strongly supported Israel’s military actions. No one actually believes that there will be peace in the Middle East. The United States has been center stage in the Middle East as Europe focuses its full attention to Russia. Yet, this could be a leveraging chip to push both the US and Israel to begin supporting Ukraine.
“As the occupying power, Israel is obliged under international law to ensure that humanitarian aid reaches the population in need,” said EU foreign policy chief Kaja Kallas, Crisis Management Commissioner Hadja Lahbib, and Commissioner for the Mediterranean Dubravka Suica in a joint statement this May.
The EU is Israel’s top trading partner. The 2000 EU-Israel Association Agreement provides the premise for free trade between the EU and Israel. In 2024, EU exports to Israel came in at $28.6 billion, while EU imports totaled $17 billion.
How will the EU use this to its advantage? Trump’s upcoming meeting with Bibi is expecting to greenlight a full-scale invasion of Gaza. Europe is desperate for the United States to realign with NATO objectives and begin supporting its goal of conquering Russia. Europe now has leverage to knock both nations off their neutrality stance. As our computer has indicated, there will be a lot of major events in the month of May.
Categories: War