(Bloomberg) -- The Trump administration’s campaign to win better access for U.S. products is coming up against an unwitting obstacle: Benjamin Netanyahu.
Efforts to upgrade the U.S.’s agricultural trade pact with Israel look like they’ll be delayed by the Israeli prime minister’s failure to form a government, according to two people who asked for confidentiality because negotiations are ongoing.
Talks were expected to resume this summer, after U.S. negotiators traveled to Israel in March to discuss reducing barriers for American farm exports, one of the people said. But that’s now been pushed to at least November, the person added, given the time needed to form a new government after the collapse of coalition talks produced a Sept. 17 revote.
The sides are separated by a relatively small gap but no further meetings are scheduled yet, according to one of the people, who is a Ministry of Agriculture official.
Israel’s Foreign Trade Administration and the Office of the U.S. Trade Representative declined to comment.
America is by far Israel’s largest trading partner with annual trade worth more than $30 billion. In 2018, it racked up a $11.3 billion trade deficit with its Middle Eastern ally, according to the latest data compiled by Bloomberg.
While the overwhelming majority of American agricultural exports by value already enter Israel duty free, there’s an imbalance that rankles the Trump administration, which has made trade wars with far bigger partners a signature feature of its tenure.
“Virtually any product produced in Israel that can be competitive in the U.S. market can enter the U.S. duty-free,” according to a 2018 exporter guide from the U.S. Department of Agriculture’s Foreign Agricultural Service. “In contrast, U.S. products continue to face high tariffs in many sectors limiting their access to the Israeli market.”
The scope of the agricultural trade illustrates just how far the Trump administration will go in its efforts to redress its grievances. In 2017, American agriculture exports and imports accounted for less than $1 billion of trade between Israel and the U.S., according to the website of the U.S. Trade Representative.
Israel is open to discussing tariff reductions and duty-free quotas for agricultural items across categories, the Agriculture Ministry official said. That includes items such as apples, pears and almonds that Israel considers sensitive because they grow near borders or in less-populated areas, the official said.
Along with being a close geopolitical ally, Israel is also the U.S.’s oldest free trade partner, with an agreement stretching back to 1985. The agricultural component of the free trade accord hasn’t been updated since 2004.
To contact the reporter on this story: Ivan Levingston in Tel Aviv at firstname.lastname@example.org
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