An Israeli-Arab farmer harvests grapes for the Bazelet Hagolan Winery in the Golan Heights in 2012.

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Products from the West Bank, Golan Heights and Gaza must bear label of "Israeli settlement"

The European Union is Israel's largest trading partner

Trade from territories said to be less than 1% of the total

CNN  — 

Can olive oil from the West Bank be labeled as a “product of Israel?”

Not if it’s going to be sold in the European Union. Not anymore.

In a decision that has been hotly debated for three years or so, the European Commission – the EU’s executive arm – decided Wednesday that products from the territories taken by Israel in the 1967 Six-Day War can no longer be sold in the 28-country EU as having come from Israel.

The decision outraged the Israeli government and settlers living in those territories. It was met with applause from advocates who do not support settlements they consider illegal.

“The labeling of products of the Jewish state by the European Union brings back dark memories. Europe should be ashamed of itself. It took an immoral decision. Of the hundreds of territorial conflicts around the world, it chose to single out Israel and Israel alone, while it’s fighting with its back against the wall against the wave of terror,” Israeli Prime Minister Benjamin Netanyahu said in a statement.

“The European Union is not going to hurt the Israeli economy. It’s strong enough to weather this, but it’s the Palestinian workers in Israeli enterprises in Judea and Samaria that will be hurt. This will not advance peace; it will certainly not advance truth and justice. It’s wrong,” the Prime Minister said.

Israel suspended some upcoming meetings with the EU following the labeling decision, Israel’s Foreign Ministry said.

Palestine Liberation Organization Secretary-General Saeb Erakat praised the EU’s labeling.

“We welcome this decision and consider it a significant move toward a total boycott of Israeli settlements, which are built illegally on occupied Palestinian lands,” Erekat said.

“The EU has once again moved from the level of statements to taking concrete policy decisions. We believe that more actions are necessary to hold Israel accountable for the crimes it continues to commit against the land and people of Palestine,” Erekat said.

EU: A ‘clarification’ of existing law

Changes to EU law require the approval of the commission, the European Parliament and the European Council, which is the gathering of 28 heads of EU national governments, along with the presidents of the council and the commission.

But the European Commission portrayed the change adopted Wednesday as merely a clarification of existing law, which mandates that labeling not be misleading. Many countries and international organizations regard Israel’s presence in the territories taken in 1967 as illegal. The United States does not.

Mandatory labeling applies to fresh fruit and vegetables, wine, honey, olive oil, poultry, organic products and cosmetics, the commission said in a statement.

Labeling such goods as “product from Golan Heights” or “product from West Bank” would not be specific enough and therefore would not be acceptable, the commission said. Instead, the goods would have to be labeled something along the lines of “product from the Golan Heights (Israeli settlement)” or “product from West Bank (Israeli settlement),” the commission said.

For other products, a label indicating their origin is voluntary, but it may not be “misleading.”

EU ambassador: Those products will still be welcome

Lars Faaborg-Andersen, the EU’s ambassador to Tel Aviv, was summoned to Israel’s Foreign Ministry Wednesday to be reprimanded over the move, according to the newspaper Haaretz.

Faaborg-Andersen said products coming from beyond the green line cannot be marketed in Europe as “made in Israel” because the EU does not recognize those areas beyond the green line as Israel, within its recognized borders.

The green line refers to the boundaries specified in the 1949 Armistice Agreements between the armies of Israel and those of its neighbors after the 1948 Arab-Israeli War.

“This also happens to be the view of 99% of the international community,” Faaborg-Andersen said.

Products from those areas will still be welcome on the European market, he said, but they must have an accurate indication of origin on them.

In the United States, 36 senators signed a bipartisan letter of concern led by Ted Cruz, R-Texas, and Kirsten Gillibrand, D-New York, to the European Commission.

“As allies, elected representatives of the American people, and strong supporters of Israel, we urge you not to implement this labeling policy, which appears intended to discourage Europeans from purchasing these products and promote a de-facto boycott of Israel, a key ally and the only true democracy in the Middle East,” the letter states. “We believe strongly that these efforts are unwarranted, dangerous, and damaging to the prospects of a negotiated solution to [the Israeli-Palestinian] conflict.”

More than $32 billion in annual trade

Enforcement will be left to the individual EU member countries.

Currently, products from Israel benefit from preferential tariffs when they enter the EU, but products from the territories do not. And that situation will not change.

The European Union is Israel’s largest trading partner, with a total trade of about 30 billion euros ($32 billion) in 2014. The European Commission, citing several estimates, says that products from Israeli settlements amount to less than 1% of the total.

CNN’s Michael Martinez contributed to this report.