EU to Review Trade Agreement With Israel in Response to Gaza Offensive

The Israeli Ministry of Foreign Affairs rejected EU criticism and said it ’reflects a total misunderstanding of the complex reality Israel is facing.’

Military vehicles stand near the border with Gaza, in Israel on May 20, 2025. REUTERS/Amir Cohen

The European Union’s foreign affairs representative, Kaja Kallas, said on May 20 that the bloc is reviewing its political and economic agreement with Israel because of the “catastrophic” situation in the Gaza Strip.

“The aid that Israel has allowed in is, of course, welcomed, but it is a drop in the ocean. Aid must flow immediately without obstruction and at scale because this is what is needed,” Kallas told reporters. “Pressure is necessary to change the situation.”

The EU says it is Israel’s biggest trading partner, accounting for 32 percent of Israel’s total trade in goods with the world in 2024.

The association agreement includes a free trade area, although it excludes “goods originating from Israeli settlements in territories that have been under Israeli administration since June 1967 [the West Bank and Golan Heights].”

Israel has come under intense pressure from its international allies in recent days after Israeli Prime Minister Benjamin Netanyahu decided to press ahead with a new ground offensive, known as Gideon’s Chariots, to destroy Hamas.

In a May 19 video statement, Netanyahu said Israel’s “greatest friends in the world,” including a number of senators, had told him: “We cannot accept images of hunger, mass hunger. We cannot stand that. We will not be able to support you.”

On the same day Canada, France, and UK issued a joint statement in which they said, “If Israel does not cease the renewed military offensive and lift its restrictions on humanitarian aid, we will take further concrete actions in response.”

‘Saving Lives’ Top EU Priority

Kallas said a strong majority of the 27 EU ministers who met in Brussels on May 20 supported reviewing Article 2 of the bloc’s association agreement with Israel.

“So, we will launch this exercise and, in the meantime, it is up to Israel to unblock the humanitarian aid,” she said, “Saving lives must be our top priority.”

In a May 20 post on social media platform X, the Israeli Ministry of Foreign Affairs said it completely rejected the direction taken in Kallas’s statement, “which reflects a total misunderstanding of the complex reality Israel is facing.”

“This war was forced upon Israel by Hamas, and Hamas is the one responsible for its continuation. Israel agreed time and again to the American proposals to a ceasefire and to the release of the hostages. Hamas refused each and every one of these proposals,” the ministry stated.

“Ignoring these realities and criticising Israel only hardens Hamas’s position and encourages Hamas to stick to its guns. Hamas’s recent praise for such criticism is a clear indication of this and results in prolonging the war.”

Under Article 2 of the agreement, which came into force in 2000, the EU and Israel agreed that their relationship “shall be based on respect for human rights and democratic principles, which guides their internal and international policy.”

In 2012, in response to a question in the European Parliament, Catherine Ashton, who was vice president of the European Commission at the time, wrote: “This agreement provides a standard clause in its Article 2 that is inserted in all EU framework agreements with third countries since the beginning of the 1990s. The aim of this clause is to make it clear for both parties that the respect of human rights and fundamental freedoms shall be an essential element of the agreement.”

In a letter proposing a review of Article 2, Dutch Foreign Minister Caspar Veldkamp said Israel’s policies were “exacerbating an already dire humanitarian situation.”

He also said members of the Israeli cabinet had made statements about having a permanent presence in Gaza.

After Kallas announced the review, Veldkamp said it was “a very important and powerful signal,” echoing sentiments of officials from France and Ireland.

Others did not back a review. Czech Foreign Minister Jan Lipavsky said the bloc should hold a meeting with Israel under the association agreement to raise its concerns, rather than conducting the review.

UK Sanctions on ‘Extremist Israeli Settlers’

On May 20, the British government announced that it was suspending free trade negotiations with Israel and imposing sanctions against “extremist Israeli settlers” in the West Bank.

Amid the diplomatic maneuvering, Israel pressed ahead with its offensive on May 20, launching further airstrikes that the Hamas-controlled health ministry in Gaza said killed at least 85 Palestinians.

COGAT, the Israeli government agency that oversees humanitarian aid, said 93 aid trucks entered the Gaza Strip on May 20.

United Nations spokesman Stéphane Dujarric said none of the aid—which included baby food, medical supplies, flour, and food for soup kitchens—reached Palestinian civilians.

Dujarric said during a May 20 news briefing that the Israeli security process for getting aid cleared to warehouses was a “long, complex, complicated, and dangerous process.”

The conflict in Gaza began on Oct. 7, 2023, when Hamas terrorists crossed the border into Israel, killing 1,200 people and taking about 250 hostages back into the strip of territory they controlled.

Israel responded with airstrikes and a ground offensive that the Hamas-controlled health ministry in Gaza claims has killed at least 53,000 Palestinians, many of them women and children.

Israel has maintained that civilian casualties are low compared with many other armed conflicts.

Indirect talks between Israel and Hamas representatives have been taking place in Qatar.

Qatari Prime Minister Mohammed bin Abdulrahman Al Thani, who is leading the mediators, said a “fundamental gap” remained between the two negotiating teams.

The Associated Press and Reuters contributed to this report.