Israel’s parliament, the Knesset Plenum, has passed a significant European Union (EU) import reform aimed at dismantling import barriers, according to an announcement made on Monday. In a unanimous decision, 22 members of the Knesset voted in favor of the reform, with no opposing votes or abstentions, as per the official release.
This reform bill, which had previously cleared the Ministerial Committee on Fighting the Cost of Living, proposes amendments to the existing standards law, enabling imports, manufacturing, and sales in line with EU regulations. With its enactment, suppliers who comply with EU standards can import goods into Israel without meeting additional local conditions, thus removing significant bureaucratic hurdles and promoting free trade.
The explanatory notes accompanying the bill specify that importers adhering to European regulations will no longer be required to present conformity evidence or conduct lab tests upon entry into Israel. This regulation is expected to diversify the product range available in the local market, thereby enhancing competition and reducing the cost of living. Israeli Minister of Economy and Industry MK Nir Barkat characterized the reform as “an effective declaration of war on the high cost of consumer goods,” suggesting it paves the way for increased market competition.
Local media, including The Jerusalem Post, suggest that the reform could significantly alleviate financial strains on Israeli households by potentially reducing prices in the estimated NIS 53 billion ($14.5 billion) consumer market. Furthermore, Israel’s Minister of Health Uriel Menachem Buso described the development as “historic news for importers” and predicted “significant savings” for families.
Industry expert Sefi Kedmi, CEO of Sphinx Research & Consulting, posits that the regulatory changes will drive greater competition by increasing the variety of products on the market, including high-margin goods. This increased competition is anticipated to lower consumer prices. However, Kedmi also cautioned that an overreliance on external markets could lead to price volatility and potentially disadvantage local producers, as evidenced by the recent surge in olive oil prices due to reduced imports following the October 7, 2023 events.
The reform comes at a time when Israel is grappling with a substantial increase in the cost of living and housing, issues that have been exacerbated over recent years. The OECD’s 2023 economic survey highlights that the housing crisis and post-COVID-19 economic pressures have particularly inflated living costs in urban areas. Skyrocketing expenses have led to widespread discontent among Israelis, with 60 percent attributing the increase to government policies, as per a Jerusalem Post report.