PDF, GB, 139 p., 796 Ko - Femise

MFN tariff rates on non-agricultural products (WTO definition) are generally lower (5.1% on
average), with the highest rates (ranging up to 34.4%) applying to fish and fishery products
and textiles and clothing. MFN tariffs on agricultural products (WTO definition) remain
high, with an average tariff of 32.9%, and rates varying considerably among product groups.
Tariffs are particularly high on dairy products (with an average rate of 124.4%), fruit and
vegetables (54.0%), and live animals and products thereof (50.4%) (see later). Tariffs are
relatively low on chemicals and photographic supplies (with an average rate of 2.2%), mineral
products (3.6%), and transport equipment (3.6%).
Due to the low tariffs, tariff escalation almost does not exist, with a higher range, close to 8
percent for final and semi-processed products and a lower range for unprocessed products.
This system usually provides states a greater degree of protection for the local manufacturing
sector, but in recent years tariff escalation has not been maintained in all stages of processing.
Overall, the current tariffs represent negative escalation for raw materials and intermediate
goods, implying lower effective protection for every stage of processing than was indicated
by nominal rates.
Coverage of an additional tariff called the “safeguard levy” has also been substantially
reduced and phased out, from the equivalent of 2.7 percent of the tariff lines in 1992 to 0.8
percent in 1999 to nil at present. The main difference between MFN tariffs and the safeguard
levy is that any change in the former requires approval by the Knesset (the Israeli Parliament),
while the levy did not. This fact had introduced a certain element of uncertainty to tariff
protection and under strong protestations by the US it had to be phased out. Another aspect of
uncertainty for importers results from the fact that Israel has bound rates on just half of its
tariff lines. The bound rates are often above the applied MFN rates, giving Israel the
possibility to unilaterally raise its applied tariffs. This issue might be solved by narrowing the
gap between bound and applied rates, as well as by increasing the coverage of tariff bindings.
However the significance of MFN tariff schedules is limited. The bulk of Israel’s imports to
supply local consumers is conducted within the framework of free-trade agreements with the
EU (now covering 27 countries), the US, EFTA, Canada, Mexico, Turkey; a partial
preferential agreement with Jordan and the Customs Union Agreement with the PA. Thus, in
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