What kind of economic policy does the European Economic Community work out towards the Mediterranean basin? Why are there tariff agreements between the EEC countries and Israel-but not between Egypt and Lebanon? Why, on the other hand, does Algeria, the most extreme of the Arab Maghreb countries, enjoy privileges which other Arab countries do not obtain from the EEC members? These are but a few of the questions which arise, as soon as an effort is made to untangle the skein of economic and tariff agreements which the EEC has forged, from the early sixties to this day, with various Mediterranean countries. On the surface, it appears there is no single coherent policy which might direct these varying and at times, contradictory economic efforts. But such an impressions would be erroneous-the EEC has a clear-cut, if muddled Mediterranean policy. The aim of this policy is very simple: to try to create a web of preferential relationships with the countries of the Mediterranean basin. And this, out of economic, political and even historical considerations. First, there are those countries who enjoyed some kind of traditional relationship with one or more of the EEC partners in the past-and to on getting preferential treatment despite the absence of any legal, or contractual relationship between them and the EEC as such, Nonetheless, Tunisia and Morocco, for instance, have a most special relationship with the French economy. Algeria too had preferential relations with France – but the oil crisis between France and Algeria has thwarted negotiations on an official renewal of such preferential relations. Algeria, nonetheless, still has pretty good economic relations with both France and Germany.
Then there are those Mediterranean countries which enjoy tariff reductions both out of political regional considerations and because of their economic sub-development, compared with the EEC members. The first two countries to sign such an agreement with the Europeans were Greece and Turkey, in July 1961 and in September 1963, respectively. As for Greece, the measures adopted by the EEC try to help this country along the road that would allow it to climb to one and same economic level as the rest of western Europe. The measures connected with current relations between the EEC and Greece stayed as they were, after the general’s putsch of April 21, 1967. All steps leading to an eventual adhesion of Greece to the EEC were, however, suspended. Israel, like Spain, has signed a preferential trade agreement with the EEC, basing itself on Paragraph 113 of the Rome treaty. This agreement was signed on June 29, 1970 and started being applied on October 1 of that year. It gives Israel a 40 percent discount for her citrus exports, taking into consideration the particular extent of Israeli fruit exports to France. The same discount is granted to Spain, while Morocco and Tunisia get an 80 percent discount. As for other agricultural and industrial products, a wide range of concessions was granted to each of these countries separately and in a differing way – all of them based on the particular trade situation between given European countries and one of the Mediterranean nations.
ISRAEL – EEC PREFERENTIAL AGREEMENT GIVES ISRAEL CERTAIN ECONOMIC ADVANTAGES
Since the spring of 1970 negotiations have been going on and off between Europe and Egypt and Lebanon. Preferential trade agreement could have been worked out long ago, except for the insistence of the two Arab countries not to adhere to the clauses of the EEC agreements which state that no member or adherent to these pacts may discriminate against the EEC member states, their commercial enterprises and industrial works. Obviously, an Arab country which supports the boycott of Israeli products, and that of firms trading with Israel, cannot respect such conditions. This, therefore, is but one more opportunity in which the anti-Israeli Arab boycott really hurts the Arabs more than it hurts the Jews and their trading partners. Nevertheless, since both sides hope to find a way out of the impasse, the Arabs now try to find a formula which would allow them to bypass the precise formulations of the non-boycott clause. The signature of a preferential agreement between Israel and the EEC on June 29, 1970 gave the Jewish state certain economic advantages: safety for its foreign investments; a possibility of aligning its industrial production on that of the EEC, organizing its export policy to complement that of the latter; and above all: the knowledge that Israel is not Isolated in the area anymore, that the economic equilibrium of this area will not be jeopardized by “wild” concessions granted to one of the states there, without compensations to the rest. This last point is particularly important as regards the citrus exports, as Israel, Spain and Morocco are neck-to-neck competitors as far as the European citrus market is concerned. Thus the situation stood till this spring. Now Britain has agreed to join the EEC and Denmark, Norway and Ireland will follow suit.
How will the enlarged EEC influence the Israeli economy 7 For Israel, the six becoming the ten will create more problems than offer solutions. First of all one finds among the products which are essential to Israel’s industries some products such as the bromides, polyvinyls and laminated woods, which enter British markets upon payment of very low custom dues, while these same products are not included in the preferential agreement between Israel and the EEC. There, Israel has to pay higher dues. In other words: after Britain adheres to the EEC these materials will be costlier for Israel, if some new agreement is not worked out. Another, more subtle, obstacle will now have to be surmounted by the Israelis: Britain served, in many cases, as an “intermediary market” which allowed it to regularize its economic relations with the EEC. So did the three other countries due for membership to the EEC. On June 1. 1971 a meeting was held between the Israeli delegates and the EEC representatives. Israel lodged its complaints and explained its fears concerning what would happen after the EEC is enlarged. The members of the EEC committee promised the Israelis they would do whatever was in their power to create an “equilibrium” between the new members and Israel. This problem will probably be considered by the EEC ministers in the fall of 1971. This leaves ample time for regressions on compensations to be found and worked out – Britain is due to join the EEC not before January 1, 1973.
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