'End of WTO talks to keep prices high'

"People don't realize that because of these fantastic tariffs they're paying higher prices for domestic products as well."

By DANIEL KENNEMER
July 28, 2006 04:00
2 minute read.
'End of WTO talks to keep prices high'

wto 88. (photo credit: )

 
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The collapse earlier this week of the World Trade Organization's Doha round of talks, which aimed to create an international agreement to lower tariffs and subsidies would set back efforts to increase competition within Israel, as well, said Federation of Israeli Chambers of Commerce President Uriel Lynn. "I believe that this is a serious missed opportunity ... to advance further exposure of the Israeli economy to competition," Lynn said. "We had expected that this would be advanced by the WTO, but for now the progress has been brought to a halt." Nevertheless, Lynn said there would be no immediate, negative impacts on the local economy. In addition to reducing impediments to trade internationally, an accord would have effectively undercut the ability of food producers and distributors to artificially inflate prices ultimately paid by the consumer. Basic food stuffs are currently overpriced due to tariffs that protect Israeli producers by charging a tax of up to 560 percent on imported dates; up to 255% on imported honey; up to 212% on imported dairy products; 190% on radishes and fresh meat imports; 170% on fresh cucumbers; and 114% on imported popcorn kernels. "People don't realize that because of these fantastic tariffs they're paying higher prices for domestic products as well," Lynn said, adding that without the pressure of the WTO, he didn't see any hurry to reduce these tariffs. "I'm not saying that any system protecting of domestic producers should be abolished, only that the tariffs be brought within reasonable levels of protection." Lynn expressed confidence that talks would be revived and an agreement signed within a year. "Over the years, we've learned that eventually logic prevails at the WTO," he said. WTO's Doha Round of talks - initiated in 2001 - came to an end Tuesday when trade and agriculture ministers from India, the US, Europe, Australia, Brazil and Japan, meeting in Geneva failed, to agree on how to reduce protective tariffs on agricultural and industrial imports, while cutting internal agricultural subsidies, the Industry, Trade and Labor Ministry said. The negotiations also addressed intellectual property, liberalization of international trade in services, the interests of developing countries and other trade concerns. The ministry stressed that Israel's important agricultural sector is sensitive and in need of protection, and that both it and the Agriculture Ministry agreed that the country's flexibility in handling the sector's needs must be preserved. Reducing tariffs on manufactured goods in third-countries - with which Israel does not have trade agreements - should take into account any reduction of tariffs in sensitive sectors to enable Israel to offset losses by boosting exports to destination markets, the ministry said.

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