WTO trade review gives Israel mixed grades

The World Trade Organization has given Israel mixed grades in a detailed country report, praising it for carrying out industry reforms and meeting international food standards but urging it to improve the transparency of its import procedures.

This was the fourth report on Israeli trade policy since the country joined the WTO in April 1995, and the first since 2006. All 157 WTO members are required to undergo trade policy reviews.

The report praised Israel for making “considerable progress” in aligning its technical regulations and food standards with international standards.

It noted that the government aims to accomplish full harmonization of Israeli technical regulations with overseas mandatory standards by end- 2012 (end-2013 for food standards).

Industry, Trade and Labor Director General Ohad Cohen, who represented Israel before the WTO panel in Geneva, said that the government has been making a concerted effort to adopt international standards, with the aim of easing trade.

Israel’s “well-developed” intellectual property system was also singled out for praise by the review, which said that it underpins the country’s status as one of the most innovative economies. Citing the example of the Copyright Act 2007 – which replaced the doctrine of fair dealing with fair use – it concluded that Israel provides a more flexible approach to copyright exceptions, which it called “an exceptional step that few jurisdictions have taken so explicitly.”

The report also applauded the Israeli government for conducting a series of structural reforms in various sectors to strengthen competition, including in financial services, telecommunications, and transport services.

“Far-reaching structural reforms have been carried out in Israel’s financial services sector since 2006, to promote competition and enhance the efficiency of financial intermediation,” the report noted. It singled out the “Bachar reform” of the capital market, which it said had encouraged insurers and other intermediaries, including foreign enterprises, to enter the market for those financial services that were traditionally controlled by the banks.

On the other hand, the review criticized Israel for maintaining non-automatic import licensing procedures on a vast range of products such as health, safety, security and tariff- quote administration, and recommended that up-to-date notifications would help improve the transparency of these import procedures.

“In general, Israel’s notification record has been mixed,” the report said, adding that there is room for improvement in areas where Israel has outstanding notification obligations, such as agriculture, regional trade agreements, and import licensing.

Turning to agriculture, the review noted that Israel uses border measures, notably tariffs, to support local producers.

It concluded that the “bill” for agricultural support is paid mainly by Israeli consumers, and argued that they would benefit from the opening of Israel’s food markets to more import competition.