The Bottom Line / The foreign sock deluge
When Ehud Olmert took up his post as industry and trade minister, some people were worried, because he immediately took to "dealing personally" with certain matters, which is the favorite pastime of ministers.
When Ehud Olmert took up his post as industry and trade minister, some people were worried, because he immediately took to "dealing personally" with certain matters, which is the favorite pastime of ministers. Nothing is more important than to visit some faraway town, promising the inhabitants a new factory, a trumpeted construction project, and a new highway, and to win the adoration and gratitude of all those around who cannot wait to rush to the polling booths with the right name on the ballot.
So instead of establishing broad, equitable rules for general implementation, Olmert preferred to take the personal, piece-meal approach, such as negotiating with Coca-Cola management on conditions for their transfer to Ashkelon, or the special conditions for moving Gidron, Super-Sol's bakery division, to the South.
But Olmert has recently made a decision, a very important one, that inspires hope that he will indeed be a good minister, working for the public's benefit. The decision was not to raise customs duties on textile imports despite constant pressure by Ramzi Gabbay and Oded Tyrah of the Manufacturers Association, who have campaigned vociferously for raising the duty on clothing from the Far East from 12 percent to 32 percent - and that's just for starters.
Gabbay and Tyrah want to kill the policy of exposure to foreign trade that began in 1991, a policy that pushed the economy forward, boosted local industry and raised the standard of living for everyone following a significant drop in prices - in clothing, for example - that was felt particularly by society's poorer sectors. But what do Gabbay and Tyrah care about the poor? What do they care how much we pay for a shirt, pants or socks? They care only how much they can personally profit.
Olmert knows the way it works. He was health minister in Yitzhak Shamir's government, which decided on the open trade policy in 1991. Olmert knows that you cannot create employment via non-competitive factories, dependent for their survival solely on high protective trade barriers. Olmert also knows that had he taken the retrograde step proposed by Gabbay and Tyrah, then our living standards would have stooped to the level of wages in Southeast Asia.
One must also remember that Israel's textile industry is not one in peril. There are several good companies that thrive, manufacture and employ staff even in these difficult trading circumstances. See Delta Galil, Tefron, Yodfat, Castro and Fox. It is simply a question of management.
Gabbay is known as particularly brave. After his meeting with the minister Thursday, when Olmert threw his claims out the window, he called up the journalists and made his categorical demand: that the minister dismiss his director-general, Amir Hayek, because of his opposition to raising the import duties. There is a little problem with that, because Hayek had already tendered his resignation when Olmert took up the post. But then there is nothing surer than calling for the resignation of someone who has already left. Funnily enough, Gabbay had no bad word to say about Olmert. You never know when you may need the minister.
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