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Liberman turns to US, European regulators to help ease Israel’s high cost of living

Finance minister asks head of US Federal Trade Commission to reduce competition barriers faced by Israeli importers, which lead to jacked up prices for consumers

Finance Minister Avigdor Liberman speaks during a faction meeting at the Knesset on June 27, 2022. (Olivier Fitoussi/Flash90)
Finance Minister Avigdor Liberman speaks during a faction meeting at the Knesset on June 27, 2022. (Olivier Fitoussi/Flash90)

Finance Minister Avigdor Liberman has asked US and European trade officials to crack down on what he described as unfair and anti-competitive practices by producers importing goods into Israel, accusing them of contributing to the country’s high cost of living.

In a missive to US Federal Trade Commission Chair Lina M. Khan, Liberman accused producers in the United States and Europe of using deals with only a single official importer to set prices of their choosing, with red tape keeping other importers from being able to enter the market and compete.

In the letter, published by Channel 12 news on Tuesday, Liberman said anti-trust authorities in Israel and the US should cooperate more closely and share information to “protect consumers from unfair pricing and distribution practices.”

He also said the authorities should work “in lockstep to make sure that competition law in enforced upon exporters and importers” in both countries so that consumers in Israel and the US can “enjoy the fruits of free and fair competition.”

Liberman proposed an initiative that would establish a “multilateral framework governing competition between countries and trade blocks.”

The finance minister specifically addressed the unfair practices that are placed on “parallel importers,” where retailers and new importers can purchase products directly from original producers abroad rather than doing so via the main importer. However, currently, these importers are subject to more red tape and costly customs procedures that can hinder competition, such as in the car industry.

“These parallel importers face undue challenges in bringing consumer products into the Israeli market,” he wrote, adding that these challenges “have contributed to restrictions on competition in the Israeli market and have put the Israeli consumer at a disadvantage.”

The letter to European Commissioner for Competition Margarethe Vestager did not appear in the Channel 12 report.

FILE – Lina M. Khan, chair of the Federal Trade Commission, speaks during a Senate Committee on Commerce, Science, and Transportation confirmation hearing on Capitol Hill in Washington, April 21, 2021. (Graeme Jennings/Washington Examiner via AP, Pool, File)

Israel’s government has struggled to combat the rising living costs, and Liberman’s request is only one of several solutions sought over the years.

The Finance Ministry, under his leadership, has moved to relax import controls and regulations that drive up costs.

Last Thursday, Opposition leader Benjamin Netanyahu on Wednesday presented an “emergency plan” to address the issue in a 17-minute long video, which mainly revolved around lowering taxes and tariffs.

Diplomat, a top importer released a statement over a week ago saying it would put a hold on price hikes — slated to reach up to 16 percent on some items — on all its products.

As of last week, while the price of gasoline dropped, electricity soared a whopping 8.6%, while state-subsidized dairy items including milk and yellow cheese rose 4.9%.

In addition, a new public transport payment plan came into effect that lowered prices for some, raised prices for others, and made all transport free for those over age 75.

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