The European Communities Commission has recommended an association agreement with Israel calling for the mutual abolition of tariffs on all industrial exports. The recommendation has been sent to the Council of Ministers of the European Common Market. But the negotiation of such an arrangement, which would require a political decision by the Council, does not seem likely in the near future owing to differences among the members.
The report of the Commission favored a total preferential system involving either a free trade area or a full customs union between Israel and the Common Mark states. It rejected proposals for a non-preferential agreement or a partial preferential system based on a 25 percent tariff reduction as insufficient to boost Israel’s exports and encourage industrial investments. On the other hand, it was pointed out here, Israel might find it difficult to reduce its generally high tariffs in line with those of the six Common Market nations under a full preferential arrangement. At the moment The Netherlands is blocking progress in ECC contacts with Algeria in reprisal for French obstruction on the Israel issue.
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