Jerusalem (The Brussels Morning Newspaper) – Israel’s parliament, the Knesset Plenum, enacted the European Union import reform in a second and third reading. In the vote, 22 associates of the Knesset voted to support the bills without dissenting votes or abstentions.
How Will Israel’s New EU Import Reform Affect Prices?
The bill, which flowed through the Ministerial Committee on Fighting the Cost of Living, seeks to remove barriers to consumer goods imports. The recent amendment of the standards law is a stage of four laws that enables a person to import, manufacture and trade a good following EU standards. With the effect of the ruling, any supplier in compliance with EU standards may import goods to Israel without further conditions, thereby improving the free import of products and eliminating bureaucratic hurdles.
What Does the Knesset’s New Reform Mean for Importers?
The explanatory letters to the bill establish that an importer who satisfies the requirements of the European regulation may freely import without, for example, presenting proof of conformity to conditions or performing laboratory tests upon entering Israel. It allows an expansion of the supply of products that are imported to the local market, growing competition and reducing the cost of living. Israeli Minister of Economy and Industry MK Nir Barkat explained the reform as “an effective declaration of war on the high cost of consumer goods”, adding that Israel is on its path to opening up competition.
How Will the Reform Affect Competition and Living Costs in Israel?
According to a local newspaper, The Jerusalem Post, the ruling would substantially alleviate financial strains on many Israeli households if the price decline was passed down to Israeli consumers, with a food and consumer outcomes market estimated at around NIS 53 billion ($14.5 billion). Israel’s Minister of Health Uriel Menachem Buso also calculated that this “historic news for importers” would include “significant savings” for Israeli households.
What Are the Expected Benefits of Israel’s EU Import Reform?
Sefi Kedmi, CEO of Sphinx Research & Consulting, established that the novel regulatory changes would increase competition by delivering a broader range of products on the market including high-margin goods produced in large amounts. This would improve competition and ultimately lead to lower costs for end-consumers. Kedmi nonetheless stressed that relying too heavily on external markets could also drive price fluctuations and disadvantage local food producers. An illustration of this is the cost of olive oil, which has increased significantly due to a fixed number of imports since October 7, 2023.
In recent years Israel has undergone a sharp rise in the expense of housing and living. According to the Organisation for Economic Co-operation and Development’s economy survey report for 2023, the housing situation and economic pressures since COVID-19 have resulted in increased costs of living across the country, especially in urban areas. The increase in the price of living has sparked widespread problems amongst the Israeli public, with 60 per cent accusing the government of higher expenditures.
