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

simple average MFN for the sector has increased from 20.5% in 1999 to 25.5% in 2005.
According to WTO (2006), average tariffs have increased for food manufacturing and
preparations, but decreased for the beverage and tobacco industries. MFN tariffs are
particularly high on dairy products (112.7% on average), manufacture of bakery products
(60.9%) and meat products (50.3%). Tariff rates also feature a high dispersion, ranging from
zero to 340% in the food industry and fruit and vegetables canning.
Finally, it is interesting to note that regarding textiles and wearing apparel, the simple average
applied MFN tariffs are at present "only" 7.7% (down from 12.5% in 1999) and 11.3% (down
from 31.2% in 1999), respectively. As noted in much of the literature on Israel's trade policy,
Israel has accepted since at least a decade that if textile and clothing firms are to survive under
Israeli ownership and management they had to be "de-localized" to neighbouring countries
such as Jordan and Egypt and some less developed East European countries (like Romania) .
The process has taken place in an orderly way and is now almost completed. It is remarkable
to note that whereas such a move has been accepted as a second best for the textiles and
clothing industry, such is not the case neither for the agricultural nor for the food sectors.
Apart from the old conventional argument that population dispersion is a defense imperative,
something which was also true regarding textiles and clothing, there are two other possible
reasons one can think about. One might be that small protected farms are partly in the hand of
settlers in the West Bank, including the Jordan Valley (and until 2005 in the Gaza Strip).
They have had a lot of clout in certain key political parties. Another reason for the high
tariffs might be the fear of the government that lowering protection might leave without
alternative employment the very poor Arab Israeli population in the Neguev desert, made up
of Bedouin tribes. Such a move could lead to a nationalist uprising in Israel or to massive
migration to urban suburbs in the centre of the country. So here the lobby in favour of
maintaining protection would be the defense establishment and the intelligence services. The
oligopolistic food industry had probably also played a role in lobbing for higher level of
protection.
Thus, it seems that the Israeli government was efficient - especially in comparison to other
MPCs - in implementing gradual, mostly unilateral, liberalization of its trade policy regime.
Agriculture is the only major exception to the liberalization tendency. This trend reflects
mainly a broad consensus among major political parties in Israel in pursuing liberal trade
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