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Apr 25, 2013

Minister Bennet to accept foreign standards on many imported products (video)

Minister of Economy and Commerce Naftali Bennet is moving on to reforms in the commercial areas. His plan, as you can see in the video below, is to change the way the Standards Institute of Israel works. Instead of requiring every item to go through intensive analysis by the standards institute, even if it is being imported from countries that have already put the product through its own high level of standards certification, Israel will do away with that, and certain products from certain countries will be approved on the basis of the foreign standards institutes. This is expected to spur more imports and bring down prices.

It sounds strange to me. Israel has its set of standards that should be checked here. Does the USA or England accept the certification of the Israeli standards or do they check imported products on their own? Importing and producing more products should be encouraged, and perhaps the way the Standards Institute works, the cost involved and the amount fo time they take to analyze each product, should be changed, but I am not sure doing away with the need for the SI to analyze products for the Israeli market is the way to go.

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  1. You have to realize that Israel is a very small market in the global scheme of things. To produce products that meet the Israeli standard is either going to be very expensive or simply not done.

  2. I need a new router. In Israel, 4 brands are certified and about 5 products of each brand (in a market of 20 or so brands each having 30 or so products). The Israeli prices for those range from 50% - 250% higher than outside of Israel, and part of that cost is market penetration costs plus limited competition.

    The products certified tend to be 1-2 years behind the current market tech, oh the and importers decided the least featured cheapest models are the ones to invest in certifying for the Israeli market.

    So why is Israel testing and certifying home routers, and denying imports of any that haven't passed their testing (though they're US and EU certified as "safe not to destroy the local airwaves")?

  3. This is a good initiative, and it takes advantage of the global market. Israel is not going to rely on foreign standards willy-nilly, but will evaluate each one (as per Bennet's example, the German standard for highlighters) and determine if it makes sense for Israel. (From my own field, Israel accepts patents which have been accepted in foreign countries. The list of countries is evaluated, and has countries have been added/removed over time based on the situation in each country. Similar formal agreements between patent offices are becoming more common.)

    Relying on foreign authorities in this way recognizes that even though we have our own way of doing things here, other countries make similar evaluations, albeit in their own way, and those ways are acceptable as well. There's no reason to duplicate things unnecessarily. It's also a good way of developing a free market.

  4. Another great initiative that Bennet is pushing is to allow competition in the new car market. Today, there is 1 exclusive importer of a car brand (e.g. Toyota, Mazda, etc.) and therefore there is no competition. If you want a Toyota you have no choice, the price is fixed, period. If Bennet's reform goes through it will allow multiple importers to import Toyotas (or any other brand) leading to competition and lower prices.


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