Modiin. Photo: Otto Magnus.

The European Union (EU) on Tuesday included the Israeli municipality of Modi’in-Maccabim-Reut on a list of settlements that are not part of Israel proper, meaning products exported from there to EU countries will not be eligible for the tax breaks stipulated by the EU-Israel free trade agreement.

While the other Israeli areas on the EU’s list—the Golan Heights, the West Bank, and East Jerusalem—are accustomed to this designation, Modi’in found itself on the list for the first time. A small part of the city, which is halfway between Jerusalem and Tel Aviv, includes three zip codes that are beyond the 1967 Green Line and therefore must pay full EU import taxes, according to the EU, whose follow-up statement to the decision on Wednesday called upon Israel and the Palestinian Authority “to renew the negotiations between them on all subjects in the permanent arrangement, including borders; the EU will recognize any change in the pre-1967 borders that is agreed upon by the sides.”

The Israeli Foreign Ministry said the EU “ignores reality when it extends the domain of conflict to places and issues that do not belong there.” Modi’in-Maccabim-Reut Mayor Haim Bibas called the city “an integral part of the State of Israel” and said the EU’s decision “does not reflect the reality on the ground.”

“If Modiin isn’t part of Israel, then the EU isn’t part of reality!” Israeli Public Diplomacy and Diaspora Affairs Minister Yuli Edelstein said. “It seems that as far as the EU is concerned, Tel Aviv and Itamar, Modi’in and Beit El are all built on illegitimate ground. Anyone who advocates a boycott will be boycotted in the end.”