A series of reforms in import regulations under the heading "What’s good for Europe is good for Israel" has recently passed the Knesset, but what about what’s good for the US? The reform, which recognizes European regulations and standards for a wide range of products, including food, cosmetics, and electrical goods, in order to make importing them to Israel easier, ignores US standards, which means that US products that are not exported to Europe will continue to encounter the same problems on their way to Israel.
The US, which in the past few years has sought to promote its industry at the expense of other countries, has decided to open talks with Israel on recognition of US standards for import purposes. The Ministry of the Economy confirmed to "Globes" that it had been agreed to launch a dialogue with the Americans on the adoption of US standards, and that "the desire is to increase reciprocal procurement". The dialogue, however, has yet to begin.
The move is at the initial stages, and it is not yet clear which categories of products will be opened up to imports in accordance with US standards only, what the stances of the various government ministries are on the matter, and what the timetable will be. With all the good will in the world to increase trade, agreement on it is liable to take a long time. If US standards are adopted, the category that will be affected most is toys and baby products.
"Claims of ingratitude"
"In the first place, the Americans don’t like the fact that we don’t rely on their standards, and that’s understandable," says Raz Hillman, head of customs, imports and standards at the Federation of Israeli Chambers of Commerce. Another source adds that at the US Embassy to Israel "there has been talk of ingratitude, following their uncompromising support since October 7, certainly in comparison with some European countries."
Everything that the US exports to Europe is supposed to comply with European standards, and it should therefore be a simple matter to import it into Israel, Hillman explains. There are, however, products mainly intended for the US domestic market or for export to countries outside Europe, "and that’s where the problem starts," he says.
As mentioned, one of the sectors chiefly affected is toys and products for babies and children. According to the Central Bureau of Statistics, in 2023, imports of products in the category "Toys, games, sports goods, their parts and accessories" totaled $1.8 billion. When it comes to toys and baby products, US and European standards differ, but Hillman stresses that "US standards are good, they’re not slack." He adds, however, "For the Ministry of Health, that’s not good enough, chiefly in connection with chemicals. There are materials that are permitted under US standards that are forbidden in Europe, so US products that are not exported to Europe might not meet the requirements."
A real or theoretical danger?
The US toys market is much bigger than the market in Europe in terms of the volume and range of products, says Motti Garmiza, an importer of toys and baby products and a member of the standards committee of the Israel Standards Institution. "The childbirth situation in Europe is bad, and the market reflects that. The only market that is developing is the US market; it has amazing solutions. But if you don’t meet European standards, even if it’s an almost identical product, you can’t import it," he says.
Garmiza relates that he had to invest $50,000 in destruction tests for a product that he imports, even though it already meets the US standard. With other products, such as carrying slings for babies, he fought, and managed to obtain ad hoc recognition for the US standard. "Otherwise," he warns, "a large and popular product category would have completely disappeared from the Israeli market."
What are the differences between European and US standards?
Garmiza: "The European standard requires nineteen kinds of check of raw materials, while the US standard requires only eight. Nevertheless, it is stricter on other things. But on the standards committee, the representative of the Ministry of Health adamantly opposed adoption of the US standard because of that."
Does that mean that there’s a real danger?
"A few years ago, a delegation of the American National Standards Institute came to Israel to find out why we weren’t adopting their standards. I asked them about the gaps versus European standards, and they said that there was no documented evidence that the materials in dispute between the standards harmed children. So why make products more expensive just because of a theoretical fear?"
Hillman adds that even in the case of industrial chemicals and cleaning reagents, the requirements for labelling of dangerous materials are in accordance with European regulation, which creates restrictions for some products from the US. "You import a cleaning reagent from the US with certain warnings on it, and translate them, but that’s not good enough for the standards here, which is liable to prevent importing the product," says Hillman. "These are areas in which it will be much easier to import products as soon as we recognize US standards."
The incongruity becomes even more glaring when one considers the fact that products can already be imported from the US on the personal import track. "If exactly the same products can be imported as personal imports, why not allow the import of products that meet a serious standard such as the US standard?" Hillman asks, and Garmiza adds that for personal imports it’s not even necessary to pay VAT (on goods up to a value of $75).
Recognition of US standards would not be a precedent for Israel. In fact, Israel is one of the few Western countries that recognizes US standards alongside European standards for the purposes of importing vehicles into Israel. The decision to recognize US vehicle standards was made in the 1980s, following pressure from the US administration at the time. On fire safety too, the government decided to abandon Israel’s unique standard and to come into line with the standard of the US National Fire Protection Association.
The current US effort comes against the background of a new industrial policy that started under President Trump and has continued under President Biden. Natanel Haiman of the Israel Manufacturers Association says, "The US administration adopted an industrial strategy with the aim of making US manufacturing industry grow again, increasing the number of jobs in industry, and creating jobs in regions that had become neglected, and to reduce dependence on manufacturing in Asia. That also leads to a desire to broaden recognition of US standards, to afford US manufactures more exporting opportunities." In such a situation, Israel’s recognition of European but not US regulation arouses anger in Washington.
"I was active vis-à-vis the US Embassy in Israel, to get them to put pressure on the government here," says Garmiza. "The US Department of Commerce of course very much wants to promote recognition of US standards, and not just in baby products. Why cars yes and those no?"
In Garmiza’s opinion, the Israeli public would gain a great deal from adoption of US standards. "It would provide cheap solutions for those who want them, and that’s the biggest saving available at present to the Israeli public. In Europe, there’s a decline in development and investment in new products, at least in my field. If we open up, the consumer will only benefit."
Published by Globes, Israel business news - en.globes.co.il - on August 27, 2024.
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