Peter Mandelson: 'Europe can give new markets to Israel and Palestine'

From a speech by the Trade Commissioner of the European Union, delivered at Hebrew University in Jerusalem

Today I want to share a vision of the EU's future trading relationships with Israel, Palestine, and the neighbouring countries, and how those relationships can support the process of peace-making and reconciliation in the region.

Today I want to share a vision of the EU's future trading relationships with Israel, Palestine, and the neighbouring countries, and how those relationships can support the process of peace-making and reconciliation in the region.

I support the objectives of the road-map: a solution in which two independent states can live together in peace and security. So long as Israel's proposed withdrawal from Gaza is a step towards this final status, and not an end in itself, I welcome it as a positive step forward.

My responsibility is to look forward at how the EU and in particular the European Commission, with its economic powers, can contribute to that future peace. A political settlement will not endure if it does not deliver economic stability and greater well being for the peoples of Israel and Palestine - to help improve their lives and turn them from despair or extremism.

Simply put, I have three aims. The first is to help make it easier for Israel and the Palestinian Territories - and I hope eventually Palestine - to trade together. The second is to help improve the conditions for you both to trade with other countries of the region. The third is to help all countries of the region to do more trade with the European Union, including by further opening of European markets.

These three aims overlap. Where Europe can help is in giving new markets to Israeli and Palestinian goods. And in giving markets to goods that are produced jointly between Israel and the Palestinian territories, or with other countries of the region, using the best inputs of each. Be that labour, be that raw material, be that innovation.

We need to do all this, because we have been going backwards. Since the start of the intifada, exports from the EU to the Palestinian Territories have dropped on average by a catastrophic 26 per cent per year. Between 2000 and 2003, Israeli exports to the EU fell on average by 9 per cent per year. EU exports to Israel also dropped in that period on average by 10 per cent per year. This should be no surprise. Peace and prosperity go hand in hand. Violence and war can only destroy.