U.S. President Donald Trump's drive to reshape global trade could lead to lower dairy and fruit prices in Israel.
U.S. trade negotiators will travel to Israel this week for advanced talks to rework the countries' 1985 free-trade accord, upgrade their agricultural trade pact and reduce barriers for American farm exports to the Jewish state, Bloomberg reported.
The Americans want Israel to remove import taxes on American products, including pears, apples and cheeses with long shelf lives.
If a new deal reduces protectionism and opens the local market to more competition, it could have the support of some in Israel, where high consumer costs are a frequent source of frustration.
Ever since the countries signed the free-trade accord over three decades ago, Israeli economic output has expanded about 13 times, while in recent years the U.S. trade deficit with Israel has reached $14 billion. The United States is Israel's largest trade partner, and annual trade between the two countries is upward of $30 billion. Agricultural trade stood at less than $1 billion in 2017, according to the U.S. Trade Representative's website.
Israel's key exports to the U.S. are precious stones, pharmaceuticals and electrical machinery.
In a 2018 review of foreign trade barriers, Bloomberg reported, the U.S. highlighted the increase in sales that could result from reduced levies on processed food in Israel, including dairy products.
Under the current terms of the deal, "virtually any product produced in Israel that can be competitive in the U.S. market can enter the U.S. duty-free," according to a separate 2018 report from the U.S. Department of Agriculture's Foreign Agricultural Service.
"In contrast, U.S. products continue to face high tariffs in many sectors limiting their access to the Israeli market."
The Farmers Federation of Israel has said it strongly objects to the U.S. initiative and that dairy and produce farmers would protest outside the Prime Minister's Office.
Avshalom Vilan, the secretary general of the Israel Farmers Federation, said he would consider petitioning the High Court of Justice to block the initiative.
Government officials familiar with the matter told Israel Hayom that talks with the Americans would be conducted in good faith and not under coercion, and that alongside the desire to protect the interests of Israeli farmers, the citizens of Israel could benefit from a new trade pact with the United States, particularly in lowering certain costs of living.
MK Sharren Haskel (Likud) welcomed the Trump administration's initiative.
"Removing [trade] barriers and free trade will bring benefit to the entire economy, and mainly to Israeli citizens," Haskel said. "With that," she emphasized, "the state must give farmers in the country the tools to compete. We have to take care of the bureaucracy and regulations suffocating the farmers, and immediately shut down the Farmers Federation. I will continue to promote my bill on this matter."
Agriculture Minister Uri Ariel declined to comment on the report.
