This week three high-ranking EU officials - external relations commissioner Chris Patten, trade commissoner Pascal Lamy and internal market commissioner Fritz Bolkenstein - informed the Israeli minister of industry and trade Ehud Olmert that his suggestion regarding labelling the origin of products exported from settlements in the West Bank and the Gaza region to EU member countries "is not acceptable."

The EU officials maintained, in a letter to the minister, that his recent proposal "differs from the proposal he made in Brussels last November".

Trade sources commented that the EU's recent decision - that goods including fresh produce originating in the territories are not eligible to benefit from the EU-Israel Free Trade Agreement - if implemented, is bound to cause heavy financial losses to growers in the West Bank and the Gaza region, whose main occupation is the cultivation of fresh produce for export.

In view of this development, Minister Olmert said that "within two months a solution will be formulated," stating that he does not intend to endanger Israel's $7 billion annual export volume to the EU "for the settlements' annual export volume of $120 million."

According to an earlier statement by the ministry, the EU had requested minister Olmert give additional details pertaining to his proposal for marking the origin of produce, as well as suggesting the formation of a joint EU-Israel ad-hoc committee for further negotiations in an attempt to solve the controversy.

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