U.S. Statement at the Trade Policy Review of Israel

Statement as delivered by Ambassador Dennis C. Shea
U.S. Permanent Representative to the WTO

Geneva, July 17, 2018

Thank you, Chair.

The United States is pleased to welcome Trade Commissioner Ohad Cohen from the Ministry of Economy & Industry; Ambassador Aviva Raz Schecter; and, the other members of the Israeli delegation, to Israel’s fifth Trade Policy Review (TPR).  I would also like to commend Ambassador Roberto Zapata of Mexico for his excellent work as discussant.

During Israel’s last TPR in 2012, the Chair noted that Israel’s various programs of economic reform had succeeded in fostering impressive economic growth, while keeping inflation in check, reducing public debt, and strengthening Israel’s current account. But the Chair also highlighted a number of areas in which additional efforts were needed to sustain economic growth and contribute to a better allocation of resources in the economy. This included reducing the gap between bound and applied tariffs.  The Chair also noted the concerns expressed by a number of Members regarding remaining restrictions on trade, including a high level of tariff protection in Israel’s agricultural sector.

Today we are pleased to have the chance to review developments since the 2012 TPR and discuss Israel’s recent economic performance.

Economic growth in Israel has been impressive since the previous review, providing evidence of the success of the government’s reform efforts.  Its core strength lies in its capacity for innovation. Israel’s support for start-up enterprises and research and development is fueling an increase in domestic consumption and domestic investment.  This, in turn, has led to a drop in the unemployment rate and has kept inflation low. One key change in Israel’s trade and investment posture noted in the Secretariat’s report is the pronounced shift in Israel’s exports of goods to exports of services.

At the same time to lower the costs of imported goods, Israel reduced its average applied MFN tariff from 7.6 percent to 5.2 percent in 2018.  Also, noted were Israel’s increased commercial engagement toward countries in the Asian region and the European Union, and a concurrent decline in imports from free trade partners elsewhere.

Mutual trade and investment between the United States and Israel have generated increased employment opportunities in both countries, and the United States continues to support Israel’s efforts to boost economic growth through free and fair trade under the U.S.-Israel Free Trade Agreement.  Furthermore, we applaud Israel for implementing the revised Information Technology Agreement and the revised Government Procurement Agreement in addition to their acceptance of the Trade Facilitation Agreement.

Despite the positive aspects described in the Secretariat’s report, there are areas where we believe Israel could make further improvements.  Continuing progress in eliminating trade restrictions and increasing transparency would benefit Israel’s economy by improving efficiency and raising productivity to support sustained economic growth.  We urge Israel to redouble its efforts to open its market to world trade, particularly in the agriculture area, and to ensure world class intellectual property protection – all of this would greatly increase the competitiveness of the Israeli economy and lower the costs of living borne by the Israeli citizen.  The United States offers our questions and comments on the Israeli trade regime in a constructive spirit and we would like to thank the Israeli delegation in advance for considering and responding to them.

The United States notes continued concerns with aspects of Israel’s import prohibitions, licensing, and associated practices.  We would welcome a better understanding of actions taken to address trade remedies, including legislative amendments to the Trade Levies Law and provisions governing antidumping and countervailing duties.

We urge Israel to ensure prompt and full notification to WTO members of steps Israel intends to take to modify measures affecting imports, including the use of standards, technical regulations and conformity assessments.  We urge Israel to recognize the WTO TBT Committee Decision on international standards, and we would welcome greater detail on how Israel is managing their regulatory impact assessment process.

We would like to recognize Israel’s continued efforts to strengthen intellectual property protection, and in particular, its recent efforts to enhance patent protection and establish reasonable royalties. Nonetheless, we observe that some concerns on intellectual property remain. While the Secretariat’s report highlights continued constructive steps taken by Israel in the area of intellectual property rights enforcement, we believe that further comprehensive, coordinated and sustained efforts in this area are necessary to ensure the protection of intellectual property in Israel.  We would be interested in an update on any legislative, judicial or enforcement steps the Israeli government anticipates.

We recognize Israel’s view of the role that agriculture plays in its national security. Nevertheless, the significant and growing costs to the Israeli consumer of the use of licensing procedures to implement WTO and preferential tariff quotas on agricultural products should encourage Israel to re-examine its policies in this regard.

The United States welcomes the constructive role Israel plays at the WTO and is a valued member.  The United States appreciates the opportunity to participate in this review and provide observations.  We look forward to continuing our work with Israel and our trading partners to strengthen the global economy, allowing trade and investment opportunities to expand.

Thank you.