Israel’s parliament, the Knesset Plenum, passed the European Union (EU) import reform in a second and third reading on Monday. In the vote, 22 members of the Knesset voted to approve the bills without opposing votes or abstentions.
The bill, which sailed through the Ministerial Committee on Fighting the Cost of Living, aims to remove barriers to consumer goods imports. The new amendment of the standards law is a set of four laws that enables a person to import, manufacture and sell a good in accordance with EU standards. With the effect of the legislation, any supplier in compliance with EU standards may import goods to Israel without additional conditions, thereby enhancing the free import of products and eliminating bureaucratic hurdles.
The explanatory notes to the bill establish that an importer who meets the requirements of the European regulation may freely import without, for instance, presenting proof of conformity to requirements or performing laboratory tests upon entering Israel. It enables an expansion of the supply of products that are imported to the local market, increasing competition and reducing the cost of living. Israeli Minister of Economy and Industry MK Nir Barkat described the reform as “an effective declaration of war on the high cost of consumer goods”, adding that Israel is on its way to opening up competition.
According to a local newspaper, The Jerusalem Post, the legislation would substantially alleviate financial pressures on many Israeli households if the price reduction was passed down to Israeli consumers, with a food and consumer products market estimated at approximately NIS 53 billion ($14.5 billion). Israel’s Minister of Health Uriel Menachem Buso also estimated that this “historic news for importers” would constitute “significant savings” for Israeli households.
Sefi Kedmi, CEO of Sphinx Research & Consulting, confirmed that the novel regulatory changes would boost competition by offering a broader range of products on the market including high-margin goods produced in large quantities. This would increase competition and ultimately lead to lower prices for end-consumers. Kedmi nonetheless emphasized that relying too heavily on external markets could also cause price fluctuations and disadvantage local food producers. An example of this is the cost of olive oil, which has risen significantly due to a limited number of imports since October 7, 2023.
In recent years Israel has experienced a sharp rise in the cost of housing and living. According to the Organisation for Economic Co-operation and Development’s economy survey report for 2023, the housing crisis and economic pressures since COVID-19 have resulted in higher costs of living across the country, particularly in urban areas. The increase in the cost of living has sparked widespread concern amongst the Israeli public, with 60 percent blaming the government for higher expenditures.
