The accumulation of origin means that a product can be processed from a partner country or can be added to a product from another partner country, but can nevertheless be considered a “product of origin” of that second partner country for the purpose of a specific trade agreement. Agricultural trade is the responsibility of three bilateral agricultural agreements negotiated between the State of EFTA (Iceland, Norway and Switzerland) and Israel. These agreements are part of the instruments for creating the free trade area and are governed by the disciplines applicable to trade in goods in the main agreement. They provide for significant concessions on both sides, taking into account the respective sensitivities. In 2013, the EU adopted a binding directive which will require the Israeli government to declare, in future agreements with the EU, that settlements in the West Bank, including East Jerusalem, are located outside the State of Israel. The directive partly implements an earlier statement by EU foreign ministers  that “all agreements between the State of Israel and the EU must clearly and explicitly express their non-performance in the territories occupied by Israel in 1967.”  The guidelines prohibit the granting of EU grants, financing, prizes or scholarships to Israeli institutions, unless a transaction exclusion clause is included. Israeli institutions and institutions that are on the Green Line before 1967 will not be automatically eligible. The European directive is similar to the one signed in 1972 between the United States and Israel, in which Israel pledged, in exchange for scientific funds, to limit projects within the 1967 borders.  The guidelines do not restrict subsidies from EU Member States.
Before the guidelines were published, Israel experienced a political and media storm.  The media has suggested that Israel will act against the EU. Maja Kocijancic, spokeswoman for Catherine Ashton, the EU`s head of foreign policy, said: “The EU is concerned by reports in the Israeli media that the Israeli defence minister has announced a series of restrictions on EU activities to support the Palestinian people. We have not received any official notification from the Israeli authorities. Our delegations on the ground are trying to provide urgent clarification.  The pan-European cumulative system was introduced in 2005. It brings together the EU, Israel and other European and Mediterranean partners to support regional integration through the creation of a common system of rules of origin. Rules of origin are the technical criteria for determining whether a particular product is eligible for duty-free access or other preferential access under a specific trade agreement. Israel was the first non-European country to share the European Union`s Framework Programme for Research and Technology Development (RDT).