Fashion and textile trade between the United States and Israel is expected to increase in the wake of the new U.S.-Israel Free Trade Area (FTA) agreement scheduled to take effect September 1, an Israeli trade official said today.
At a news conference at the Harley Hotel here, Abraham Rosental, Israel’s Trade Commissioner to the U.S., outlined his predictions for a “bilateral flow of trade” between the two countries that would offer expansion and co-venture opportunities for American fashion and textile producers as well as for American retailers who sell Israel’s fashion merchandise.
“Our final goal for 1995 is that all trade will have a duty-free access of products from one country to the other,” Rosental explained.
ALL APPAREL ITEMS COVERED IN PACT
Under the FTA agreement, signed by Industry and Trade Minister Ariel Sharon and by U.S. Trade Representative William Brock last April, all articles of apparel are covered in one of the four categories of tariff-cutting.
While some items, such as women’s and girls’ swimming suits, will receive immediate duty-free treatment, the remainder will undergo a phase-down of duties, beginning with a 20 percent reduction in September, and will be duty-free either by 1989 or 1995. “This reduction at a wholesale level will eventually be passed along to consumers as well,” Rosental predicted.
He asserted that the FTA agreement, encompassing all trade between the two countries, “is an excellent opportunity for Israeli and American businessmen to explore joint business ventures.” It should also “encourage American apparel and textile companies to penetrate the Israeli market with exports and to co-venture manufacturing enterprises in Israel.”
“Not only can producers take advantage of Israeli technology and manpower expertise,” Rosental continued, “they can also re-export back into the U.S. duty-free, enjoying a price edge against other world producers.” All other countries supplying apparel to the U.S. have no tariff reduction benefits; the rate of duty ranging from 4.5 percent to 37.5 percent.
FTA IS FIRST FOR U.S.
The FTA agreement is the first the U.S. has entered into while Israel is the only country that has a FTA agreement with the European Economic Community (EEC) and the U.S. “It is a good way of access from the U.S. to the EEC,” noted Rosental and added that the agreement could “strengthen ties between Israel and the U.S.”
Although Israel already imports a substantial volume of textiles from the U.S., Israel’s exports to the U.S. remain a small portion of the American market. But as Israel increases its sales of apparel, the volume of U.S. textile exports should also increase.
Rosenthal emphasized that Israel won’t compete “with cheap labor and mass production” but rather with “high quality and designs.” To support this statement, the Israel Trade Center here in cooperation with the Israel Export Institute in Tel Aviv, will present Israel Designs, a showcase of 35 Israeli fashion designers that, according to Rosental, “will be a good kickoff for the implementation of the FTA Agreement.”
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