Democratic Palestine : 22 (ص 28)
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- Democratic Palestine : 22 (ص 28)
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The FTA is intended to maintain the rigorous economic
reforms brought about under the guardianship of Reagan who
said, «I am confident that as this agreement is implemented,the
US—lIsrael FTA will prove to be one of the cornerstones of
Israel’s future economic development program.»
An alternative to dollarizing the Israeli economy was to base
the shekel on the currencies of the five imperialist industrial
giants:the US, Japan,France,the UK and West Germany. This
step was taken after the dollar-linked shekel lost ground
against European currencies, making imports from Europe
more expensive for ‘Israel’. It will create greater stability in the
Zionist state’s foreign trade and prevent extreme fluctuations
from occurring as a result of changes in the exchange rates of
foreign currencies.
FTA: OVER AND BEYOND
The US had previously enacted more limited free-trade ar-
rangements such as the one-way, duty-free trade established by
the Caribbean Basin Economic Recovery Act (CBI) and the
sectoral free trade agreement with Canada in the automotive
sector. The FTA, however, goes even beyond the existing
US—Israeli Treaty of Friendship, Commerce and Navigation,
by stipulating that no requirements to export or purchase
domestic goods or services be made a condition for investment
or for receiving investment incentives. A former high trade of-
ficial, Herald Malmgren, noted the exceptional nature of the
FTA: Ever since 1947, the US has adhered to a multilateral,
most-favored nation (MEN) policy, whereby trade concessions
made to one nation are automatically applied to all MFN
members. The bilateral FTA with ‘Israel’ violates this long-
standing policy by offering ‘Israel’ privileges not extended to
any Other nation.
On the other hand, ever since the mid-seventies, about 90%
of Israeli exports have been duty-free, enjoying tariff exemp-
tion under the Generalized System of Preferences (GSP).
Under this 140-nation United Nations agreement, the US and
other industrial countries eliminate duties on products from
developing countries. The GSP was, however, scheduled to
expire at the end of 1984, leaving Israeli exports exposed to an
uncertain future. The FTA would have protected them had the
GSP not been renewed. More importantly, the GSP imposes
constraints. If the export of a product to the US exceeds $57
million or 50% of the US import of that product from all
sources, the tariff exemption may be revoked. This constraint
is bypassed in the FTA.
Finally the FTA is different because it covers a full range of
services as well as goods. Both parties are to open their markets
to the other’s service industries, providing the same treatment
as is extended to domestic companies, and making information
on laws and regulations readily accessible. Until the conclusion
of the FTA, only large Israeli companies had the strength and
manpower to maintain warehouses and service facilities in the
US, in addition to sales offices.
Passage of the FTA overrode every other consideration,
sailing through the US Congress despite the growing protec-
tionist trend there. Still, the clamor of objections and fears
from major US industries and labor unions could not simply be
waved away. The most prominent opponents of the FTA came
from the American Textile Manufacturers: Institute, the
Leather Products Coalition, Manufacturing Jewelers and
28
Silversmiths of America, and the California-Arizona Citrus
League, among others. In California, 28 agricultural
representatives submitted a petition demanding that farm
products be protected from Israeli «dumping». Opposition was
temporarily appeased by categorizing Israeli export products
which would threaten US suppliers and compete price- and
quality-wise, as super-sensitive. This meant they would be
subject to a more drawn-out process of tariff reduction, to
begin in 1990.
Due to its own priorities, the Reagan Administration pro-
moted the FTA with a vengeance, depite the fact that it en-
dangers domestic jobs and even some capitalist concerns. After
all, anti-labor policies are a hallmark of this administration
which consistently champions the most powerful sectors of
monopoly capitalism, especially the military-industrial com-
plex. In this policy framework, the US’s strategic alliance with
the Zionist state is vastly more important than jobs or con-
sumer industries. This is especial'y true today when the FTA’s
economic arrangements are to be combined with the
technological and military advances to be made with the SDI.
The expected result is an enormous boosting of the US’s
overall economic and military prowess.
The recategorizing of some Israeli products as supersensitive
did not entail any real disadvantages for the Zionist state.
These products comprise only 6% of the total Israeli exports to
the US; 2/3 of that is gold necklaces and the rest mainly citrus
and tomato products. On the other hand, the bulk of Israeli
agricultural exports (95%) have been going to the European
Economic Community, but this export market is now being
threatened by two new competitive agricultural exporters
entering the EEC - Spain and Portugal. Jeopardized Israeli
agricultural products will find an outlet in the US market, and
by the time, tariffs will have been completely phased out.
For purposes of duty elimination, the products of both
countries are divided into four areas of sensitivity:
(1) products on which duties will be eliminated immediately
upon the FTA agreement coming into force;
(2) products on which duties will be eliminated in several stages
by January I, 1989;
(3) products on which duties will be eliminated in eight stages
over a ten-year period;
(4) products on which duties will not be reduced for a five-year
period, after which advice will be sought from the US Interna-
tional Trade Commission, and elimination of tariffs enacted
based on this advice.
THE EUROPEAN CONNECTION
It would be interesting to shed further light on this division.
Under the first category are included transportation equip-
ment, electric machinery and all non-metallic minerals, except
fuels, among other related products. What is significant about
these products is that they include the types of goods which the
US and EEC countries compete to sell on the $8 billion Israeli
market. This category accounts for 1/4 of Israeli imports from
the US. Israeli tariffs on US goods were scaled down to the
European level as soon as the FTA came into force. In 1987,
they will be pared down in parallel with European products by
60%, to be nullified by 1989 (the same date that the tariff
phasing-out process of the free trade agreement between the
EEC and ‘Israel’ will be completed). US companies already
export $2 billion in non-military goods to ‘Israel’ each year, - هو جزء من
- Democratic Palestine : 22
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