In the aftermath of the ministerial committee on the cost of living meeting, Prime Minister Benjamin Netanyahu has made a pivotal decision to embrace the proposed framework known as "What is good for Europe is good for Israel." This visionary initiative, originally presented by Economy Minister and former Mayor of Jerusalem, Nir Barkat, and fervently supported by Finance Minister Bezalel Smotrich, carries the potential to usher in a transformative era in Israel's trade dynamics.

Central to this approach is the complete liberalization of imports from Europe into Israel, subject to specific exceptions granted by the regulatory authority. The genesis of this concept can be traced back to June when Minister Barkat introduced the "Free Import Law from Europe." This innovative law advocates for an import system characterized by open borders and the parallel adoption of European regulations. The overarching aim is to transition from cumbersome entry inspections to a streamlined process where products are scrutinized just once on the shelves, adhering to European standards.

The forum also held two MoU signing ceremonies, signed between leading Israeli companies and Japanese corporations: NTT and D-ID, and Sompo Digital Lab Tel Aviv and TytoCare.
These were followed by many B2B meetings of companies from both countries. pic.twitter.com/VS20fjtrQ4

— Israel Export (@IsraelExport) September 5, 2023

Barkat articulated the profound implications of this free import law, asserting that it has the potential to make history by unlocking access to a plethora of products, effectively circumventing the existing bottlenecks associated with the Standards Institute. He emphasized, "The idea is that a free import law for Israel will make history. It opens the gates to tens of thousands of products. It bypasses all the barriers at the current Standards Institute." Furthermore, he elucidated, "With the new law, any importer will be able to bring in any product that complies with European regulation. 25% of the products in Israel are imported and are subject to Israeli regulation. The goal is to reach 50% and it is not something out of reach. If Carrefour supermarket products are 40% cheaper, it says how much the new law can lower prices."

When Israel and Germany work together, we can achieve almost anything. This week has proven that once again. Minister Barkat and vice chancellor Habeck Thank you 🙏 for energizing 😂 our bilateral cooperation together@NirBarkat @BMWK pic.twitter.com/FMwttc5WCL

— Ambassador Ron Prosor (@Ron_Prosor) September 8, 2023

Barkat's rationale behind this paradigm shift lies in the core principle that any product conforming to European directives will enjoy direct entry into Israel, obviating the need for port inspections and the bureaucratic quagmire of paperwork. The essence of this approach is encapsulated in the belief that what benefits hundreds of millions around the world can equally benefit Israel. Barkat emphasized, "The bureaucracy imposes a 10% cost on imported products in Israel. We adopt the import method based on an open border policy for imports. Naturally, there will be exceptions. We are starting in the food and toiletry market, but we will not stop there. Our recommendation is to expand into other areas because there is no difference once it is implemented."

When considering the potential impact of this law on consumer prices, Barkat expressed optimism, stating, "This is at least a 10 percent reduction in the cost of living of consumer goods. This is significant and it approaches the European prices. There are some kosher and transport matters, but beyond that there should be no difference."