Trade War Reaches Jerusalem: U.S. Pushes Israel to Drop Produce Import Duties

Currently, Israeli produce is not subject to import duties in the United States, whereas Israel taxes american exports limiting the quantities with quotas

Vegetables on sale in Israel
Dudu Bachar

The United States has been pushing Israel to remove import duties on fresh fruits and vegetables, in order to make such imports competitive in Israel.

This move is another embodiment of the American ideology against trading partners with protective trade practices, as the escalating trade war between the United States and China indicates. Over the past several months, high-level American officials have been in talks with Israel’s Agriculture Ministry regarding agricultural trade agreements.

The status quo favors Israel; Israeli farmers can export however much they want to the United States, and their products are not subject to import duties there. However, Israel controls how much American produce is imported to Israel, limiting the quantities with quotas, as is the case for all imported produce in Israel. For instance, an importer who brings tomatoes from the United States pays 70 agorot per kilogram. Imported oranges are subject to a duty of 65 agorot per kilogram.

>> Europe, then China. Now, Israel is the new front in Trump’s trade wars | Analysis

U.S. President Donald Trump has made fighting other countries’ restrictive trade practices one of his most signature policies. U.S. and Israeli representatives are scheduled to meet to discuss the matter late this month.

Currently, imported fruits and vegetables account for 3.7% of Israeli consumption. While it’s questionable whether Israel’s small market could ever become a major destination for American produce exporters, the American demand is important for Israeli exporters.

Israeli officials are making political calculations. Some government officials hope that granting the Americans an ideological win on the trade front will soften the blow when Trump releases his peace plan for Israel and the Palestinians. On the other hand, representatives of Israel’s agricultural sector fear they’ll be sacrificed in the name of Israeli diplomacy.

The Agriculture Ministry held a meeting Tuesday to prepare for the bilateral talks, in an attempt to draft a proposal for which U.S. fruits and vegetables could be freely imported to Israel.

Avshalom Vilan, the head of Israel Farmers Association, said that removing import duties would destroy entire sectors of Israeli agriculture. He noted that the politicians and top bureaucrats discussing the fateful proposal would shortly be leaving office due to the recent elections.