"Palestinian control of the border crossing between the Gaza Strip and Egypt won't lead to the dumping of cheap goods in Israel," said PA Minister of Economy and Trade Mazen Sinokrot. He made the comment in response to claims by the Manufacturers Association of Israel and Federation of Israeli Chambers of Commerce that the disengagement plan would lead to the dumping of substandard cheap goods in Israel.
Chambers of Commerce chairman Uriel Lynn believes that the pending agreement with Egypt on the Philadephi security road on the Gaza Strip-Sinai border should prevent the free flow of goods from Palestinian areas to Israel. He said such a flow could hurt Israel's economy, health, and public safety.
Lynn warned that the Standards Institution of Israel was liable to lose control if substandard goods seep into Israel from Palestinian areas undisturbed, without enforcement of import laws. He said Israelis were liable to face dangerous products, such as substandard or out-of-date drugs, food, and infant products. Such products might pose problems to people who keep kosher. There is also the risk of agricultural produce irrigated with contaminated water.
The Chambers of Commerce is worried that imported goods, on which high taxes are paid, will not be able to compete against goods coming from the Palestinian Authority (PA), on which low, if any, taxes are impose. This is liable to cause a loss of tax revenue on imports from place other than the PA.
Sinokrot said, "Goods will enter Israel only through proper border crossings such as Karni, where there is Israeli supervision, just like at any international border crossing." He added that the dumping of goods would also harm the Palestinian market, so the PA had an interest in preventing this.
Concerning the risk that establishing a land link between the Gaza Strip and West Bank would open smuggling channels, Sinokrot said both parties were holding negotiations on customs and supervision procedures at border crossing points.
Published by Globes [online], Israel business news - www.globes.co.il - on July 6, 2005