Israels trade pact with E.U. faces last-minute obstacles

BRUSSELS — A long-awaited trade pact between Israel and the European Union has hit some last-minute snags.

Israel approved a draft of the trade accord on June 7, but it nonetheless called on E.U. officials to incorporate some changes into the agreement.

According to sources within the European Executive Commission, the E.U.'s principal decision-making body, the unresolved problems are linked to Israel's demand for free access to European markets for its agricultural exports, especially for its oranges.

Israel is also seeking to continue negotiations about Israeli companies tendering for European Union telecommunications contracts.

Israeli Foreign Minister Shimon Peres visited Spain earlier this month to seek agreement with Spanish leaders on issues blocking the conclusion of an Israeli-E.U. accord.

Some E.U. countries — including Spain — are eager to protect their agricultural markets from Israeli imports.

Peres' visit to Madrid took place less than a month before Spain takes over the rotating E.U. presidency on July 1.

Despite the last-minute difficulties, E.U. officials are predicting that an accord will soon be finalized.

A spokesman for Manuel Marin, the E.U. official in charge of relations with Mediterranean countries, said the European Commission would present a final agreement for the approval of the E.U. Council of Ministers at a summit set to take place in the French city of Cannes at the end of June.

"With efforts from both sides, a new accord could be initialed within a short time," E.U. sources said, adding that in the meantime, contacts with Israeli negotiators would continue.

The new trade pact would replace a 1975 trade and cooperation agreement between Israel and what was then known as the Common Market.

Negotiations on an updated accord between Israel and the European Union began in January 1994, after E.U. leaders decided to "reward" Israel for signing its peace agreement with the Palestine Liberation Organization in September 1993.

The new accord would bring Israel closer to the European Union by creating a formal framework for political dialogue between the two sides.

It would also give Israel observer status in the European Union's Science and Research Committee so that it would be able to participate in E.U. research and development projects.

The European Union is Israel's main trading partner, but Israel has repeatedly complained about its $7.5 billion trade deficit with the 15-member bloc.