The Knesset recently passed a series of import reforms under the title “What’s Good for Europe is Good for Israel,” but what about what’s good for the United States? The reform, which recognizes European regulations and standards for a wide range of products, including food, cosmetics, and electrical goods, in order to facilitate their import into Israel, ignores American standards, meaning that American products that are not exported to Europe will continue to face the same problems on their way to Israel.
The United States, which has sought in recent years to strengthen its industry at the expense of other countries, has decided to open talks with Israel on recognizing American standards for import purposes. The Economy Ministry confirmed to Globes that it had been agreed to launch a dialogue with the Americans on adopting American standards, and that “the desire is to increase mutual purchases.” However, the dialogue has not yet begun.
This move is in its early stages, and it is not yet clear which categories of products will be opened up to imports based on US standards only, what positions the various government ministries have on the issue, and what the timeline will be. For all the goodwill in the world to increase trade, it is likely to take a long time to agree on this. If US standards are adopted, the categories that will be most affected are toys and children’s products.
“claims of ingratitude”
“First of all, the Americans don’t like the fact that we don’t rely on their standards, and that’s understandable,” says Raz Helman, head of customs, imports and standards at the Federation of Israeli Chambers of Commerce. Another source adds that the US embassy in Israel “was talking about ingratitude, after their unwavering support since October 7, certainly compared to some European countries.”
Everything the US exports to Europe is supposed to meet European standards, so importing it into Israel should be easy, explains Hillman. However, there are products that are primarily intended for the US domestic market or for export to countries outside Europe, “and that’s where the problem begins,” he says.
As mentioned, one of the sectors that is mainly affected is toys and children’s products. According to the Central Bureau of Statistics, total imports of products in the category of “toys, sports games, parts and accessories” in 2023 amounted to about $1.8 billion. When it comes to toys and children’s products, American and European standards differ, but Hellman emphasizes that “American standards are good and not lax.” He adds: “For the Ministry of Health, this is not good enough, especially when it comes to chemicals. There are substances that are allowed under American standards and banned in Europe, so American products that are not exported to Europe may not meet the requirements.”
Real or theoretical danger?
The toy market in the United States is much larger than the European market in terms of size and product range, says Moti Garmiza, an importer of toys and children’s products and a member of the standards committee of the Israel Standards Institute. “The birth situation in Europe is bad, and the market reflects that,” he says. “The only market that is developing is the American market; they offer amazing solutions. But if it doesn’t meet European standards, even if the product is almost identical, you can’t import it.”
Garmiza says he had to invest $50,000 in destructive testing for a product he imported, even though it already met American standards. For other products, such as baby carriers, Garmiza fought and succeeded in obtaining temporary recognition of American standards. “Otherwise, a large category of popular products would have disappeared from the Israeli market,” Garmiza warns.
What is the difference between European and American standards?
Garmiza: “The European standard requires nineteen types of raw material inspection, while the American standard requires only eight. However, it is more stringent in other things. But in the standards committee, the representative of the Ministry of Health strongly opposed the adoption of the American standard for this reason.”
Does this mean there is a real danger?
“A few years ago, a delegation from the American National Standards Institute came to Israel to find out why we had not adopted their standards. I asked them about the gaps compared to the European standards, and they said that there was no documented evidence that the materials in dispute between the standards were harmful to children. So why make products more expensive just out of theoretical fear?”
Even in the case of industrial chemicals and cleaning products, the hazardous materials labeling requirements are in line with European rules, which restrict some products from the United States, Hillman adds. “You import a cleaning product from the U.S. with certain warnings, and then you translate them, but that’s not enough for the standards here, which can prevent the product from being imported,” Hillman says. “These are areas where it will be easier to import products once we recognize U.S. standards.”
These contradictions become even more apparent when we consider the fact that products can already be imported from the United States as personal imports. “If the exact same products can be imported as personal imports, why not allow imports that meet a standard as serious as the US standard?” asks Hellman. Garmeza adds that for personal imports, there is no need to pay VAT (on goods up to $75).
Recognizing the American standards would not be a first for Israel. In fact, Israel is one of the few Western countries that recognizes American standards alongside European standards for the purposes of importing vehicles to Israel. The decision to recognize American vehicle standards was made in the 1980s, following pressure from the US administration at the time. Also on the issue of fire safety, the government decided to abandon the unique Israeli standard and join the US National Fire Protection Association standard.
The current US efforts come against the backdrop of a new industrial policy that began under President Trump and continued under President Biden. “The US administration has adopted an industrial strategy aimed at getting the US manufacturing industry growing again, increasing the number of jobs in the industry, creating jobs in areas that have been neglected, and reducing dependence on manufacturing in Asia,” says Natanel Hyman of the Israel Manufacturers Association. “This also leads to a desire to expand recognition of US standards and give US manufacturers more export opportunities.” In such a situation, Israel’s recognition of European regulations rather than US ones is causing anger in Washington.
“I have been active in engaging with the U.S. Embassy in Israel to pressure the government here,” Garmeza says. “And of course the U.S. Department of Commerce is very keen to promote recognition of U.S. standards, not just in children’s products. Why are we supporting cars and rejecting these products?”
Garmeza believes that the Israeli public will benefit greatly from adopting American standards. “It will provide cheap solutions for those who want them, and this is the greatest savings available to the Israeli public at the moment,” he says. “In Europe, there is a decline in development and investment in new products, at least in my field. If we open up, only the consumer will benefit.”
This article was published in Globes, Israeli Business News – en.globes.co.il – on August 27, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.
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