United States and Israeli officials today defended the just concluded U.S.-Israel Free Trade Agreement (FTA) before members of Congress as the House Ways and Means Committee opened hearings on the pact.
The new agreement, which provides for the gradual elimination by both countries of tariffs on goods traded between them, is expected to win Congressional approval by early next month. But continued opposition from U.S. manufacturers and reservations about the precedent setting nature of the agreement indicate that some modification will be made before the text is completed and submitted to Congress.
In the hearings today, Assistant U.S. Trade Representative Doral Cooper and Philip Opher of the American-Israel Chamber of Commerce and Industry defended the agreement as an opportunity for both U.S. and Israeli exporters to expand their respective shares of the foreign market.
In particular Cooper noted that the the U.S. would most benefit from the phasing out of tariffs, since a far smaller percentage of U.S. export than Israeli goods exported to the U.S. currently benefit from duty free tariffs.
PACT TO HELP U.S. IN EUROPE
According to the agreement, tariffs on some goods will be eliminated immediately while duties on goods considered “sensitive” to import competition will be phased out progressively over 10 years. The agreement also provides for the gradual elimination of non-tariff areas, including Israeli export subsidies and its extension of certain credits for export goods.
The agreement, Cooper said, would also permit the U.S. to compete on an equal footing with Israeli producers in Europe. The European Economic Community has already concluded a similar free trade agreement with Israel according to which duties on most manufactured goods will be completely phased out by 1989.
But representatives of the textile and leather industries as well as spokesmen for avocado and rose exporters testified today that the agreement’s provision to phase out Israeli export subsidies over a six-year-period was insufficient to protect their industries. They also objected to provisions for Presidential waiver of any law restricting U.S. government precurement of certain goods to domestic producers. Such restrictions are included in the General Agreement on Tariffs and Trade (GATT) which Israel is expected to sign as a provision of the new agreement.
MAY SET PRECEDURE
While House representatives spoke favorably of the agreement at the hearing today, questions were also raised about the precedent it might set for the conclusion of similar agreements with other countires. Rep. Sam Gibbons (D. Fla.), suggesting that Arab nations might also indicate an interest in such a pact, said he had spoken with Israeli officials here and was told that “Israelis would welcome” such an arrangement.
Cooper responded that the Administration viewed the new agreement as “a fine framework for future negotiations” on free trade arrangements with other countries.
The Trade and Tariff act of 1984 permitted the President to negotiate an agreement with Israel without the approval of Congress. Unlike a treaty, the agreement requires the approval of the House as well as the Senate.
After hearing today’s testimony, which also included statements by Thomas Dine, executive director of the American Israel Public Affairs Committee, and Jay Finkel of the Zionist Organization of America, some Committee members spoke glowingly of the new agreement.
Rep. W. Henson Moore (R. La.), calling the deal “a landmark decision that would help an important ally” said, “This is a fine day indeed.”
COINCIDES WITH MODAI VISIT
The agreement has not been officially submitted to Congress as the House prepares to consider modifications for inclusion in a final bill. As it stands now the agreement will be initialled tomorrow at the Executive office.
Today’s hearing coincided with Israeli Finance Minister Yitzhak Modai’s visit to Washington where he will be pushing for Congressional passage not only of the Free Trade Agreement but of a U.S. aid package for fiscal years 1986 and additional emergency financing. He met today with Secretary of State George Shultz.
The House Committee on Foreign Affair’s subcommittee on Europe and the Middle East began hearings today on the package. In addition to the initialling the new agreement Modai will meet Congressional leaders on both issues tomorrow.
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