Arad Textile Industries Ltd. has warned that it may close its manufacturing operations in Israel if tariffs on Far Eastern products are lifted. In a letter to Minister of Finance Yuval Steinitz and Minister of Industry, Trade and Labor Shalom Simhon, Arad Textile CEO Guy Schwartz said that the lifting of tariffs would result in the immediate closing of the company's plants in Mitzpeh Ramon, Arad, and Migdal Ha'Emek, the loss of 550 jobs, and the transfer of production to Jordan and Ethiopia.
Arad Textile's largest factory in Arad produces towels and employs 400 people. Schwartz said that the current tariff on imports from countries with which Israel does not have a free-trade agreement is 12%, and eliminating it would expose domestic manufacturers to imports from China and Pakistan at prices that Israeli manufacturers could not compete against.
A quarter of Arad Textile's output is for the domestic market and the rest is exported to Europe and the US. "There's a great absurdity here. I can export my goods, but I cannot sell in the country where I manufacture, because it prefers to import inferior and cheap goods from other places without signing trade agreements with them. Lifting the tariff will be a death blow for us and for Arad, where we are the largest employer," said Schwartz.
Arad Textile's plant in Mitzpeh Ramon manufactures uniforms for the IDF, and its plant in Migdal Ha'Emek manufactures items for surgical rooms. "If we have to move our operations abroad because we cannot sell to the domestic market, the IDF may have to clothe its troops in uniforms made in Jordan, because there it's possible to produce them at lower costs. As it is, Israel's textile industry is in bad shape, and instead of helping us, we're being tripped up."
Published by Globes [online], Israel business news - www.globes-online.com - on October 24, 2011
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