Israel

“Trade Policy Reviews” analyse the trade policies and practices of each member of the WTO. The reviews consist of three parts: an independent report by the WTO Secretariat, a report by the government, and the concluding remarks by the Chair of the WTO’s Trade Policy Review Body. The opening section - “key trade facts” - provides a visual overview of the WTO member’s major exports/imports, main export destinations, origins for its imports and other key data. This edition looks into the trade practices of Israel.

Israel has not been spared the effects of the global economic crisis, but its financial system has weathered the crisis comparatively well. Since its last TPR, in 2006, real GDP growth has averaged around 5% per year, only interrupted by a sharp decline in growth in 2009. Recently, there are again signs of slowing economic activity. The resilience and stability of the financial system has been attributed, inter alia, to cautious lending and limited exposure to “toxic” assets by Israeli banks, and a conservative supervisory approach by the Bank of Israel. There was no need for any bank bailout or major stimulus programme, although the Government has substantially increased its exposure to credit guarantees in order to stimulate exports. Public debt as a percentage of GDP has been reduced (74% in 2011).

This chapter provides a case study tracing the impact of domestic regulation on market structure in the retail distribution services sector and its ultimate effects on consumer food prices. Taking Israel, a small and relatively liberalized Organisation for Economic Co-operation and Development (OECD) economy, as an example, our research investigates whether market concentration and the absence of international competition can be attributed to domestic regulation. We place this discussion in the context of recent consumer-led social protest against the rising cost of food in Israel.

The Trade Policy Review Mechanism (TPRM) was first established on a trial basis by the GATT contracting parties in April 1989. The Mechanism became a permanent feature of the World Trade Organization under the Marrakesh Agreement which established the WTO in January 1995.