Business Notes Treaties

While talk of global protectionism has been grabbing headlines recently, last week brought a striking example of trade peace. In Washington, American and Israeli officials signed an agreement to remove all duties and other barriers to commerce between the two nations by 1995. The accord was the first of its kind between the U.S. and a foreign country. Said William Brock, the outgoing U.S. Trade Representative: "This is a precedent-setting agreement reflecting the Reagan Administration's commitment to free trade with all nations." The White House, which hopes that the agreement will encourage a loosening of trade restrictions around the world, approved the unique arrangement in part as a way to bolster the ailing Israeli economy. Israel, which sought the pact since 1981, last year sold $1.6 billion worth of merchandise to the U.S., while importing $1.8 billion in American products.

The removal of trade barriers should benefit American consumers. Gottex, an Israeli firm whose stylish swimwear ranges from $70 to $250, said that once the 32% duty that it now pays is lifted, its fashion-minded U.S. customers will see lower prices.