Israel's extensive network of international trade and economic cooperation agreements includes Free Trade Area agreements, R&D programs, agreements for the protection of investments and treaties for the avoidance of double taxation. Following a thorough unilateral trade liberalization program, implemented in the early 1990's to expose domestic industry to foreign competition, Israeli trade policy aims to continue the expansion of its network of bilateral trade agreements.
Free Trade Agreements (FTA)
Free trade agreements serve to facilitate international trade in merchandise by eliminating or reducing tariffs and other trade barriers between the participating parties.
Israel enjoys FTAs with North America and most of Western Europe that cover close to 80% of Israel's foreign trade.
Israel has signed an association agreement with the European Union. The FTA provides for import-duties exemptions for most Israeli-made products arriving in the EU.
Complementing its EU agreement, Israel has also concluded FTAs with the EFTA countries, as well as with Turkey.
Across the Atlantic, Israel has signed separate FTAs with all 3 NAFTA member countries – the U.S.A., Canada and Mexico.
Israel recently signed a historical free trade agreement with MERCOSUR, the Latin American regional trade union (comprising of Brazil, Argentina, Uruguay and Paraguay)
Israel has signed an Agreement on Trade and Economic Cooperation with the Kingdom of Jordan which includes significant tariff reductions in bi-lateral trade
International R&D Programs
Similar to its trade agreement program, Israel has developed an extensive network of international R&D accords that foster industrial and technological cooperation with many countries
Bi-national R&D funds: These funds have proven to be remarkably successful and effective in supporting joint R&D projects to the mutual benefit of both parties. Each has its own independent administration and budget provided by the respective governments. Israel has established bi-national funds with the U.S.A, Britain, Canada, Singapore and Korea as well as with the Province of Ontario in Canada and the State of Victoria in Australia.
Bi-national R&D Agreements: These agreements support joint R&D projects through the appropriate authorities in the respective countries. In Israel, the Office of the Chief Scientist in the Ministry of Industry, Trade and Labor is the responsible authority for implementing these agreements. Israel has concluded such agreements with 13 countries including: France, Germany, Italy, India, China and more.
E.U. Sixth Framework Program: This program is the prime vehicle for Research and Technological Development of the European Union. Israel is the only non-European Associated State participating as an equal member in the program.
Treaties for the Avoidance of Double Taxation
Treaties for the Avoidance of Double Taxation are aimed at reducing tax impediments to cross-border trade and investment. Israel has concluded treaties with 40 countries including: the U.S.A., Brazil, Canada, China, France, Germany, Italy, Japan, the Netherlands and Russia.
Agreements for the Protection of Investments
These international agreements are designed to promote and legally protect the flow of capital for the productive sector with regard to direct foreign investment (FDI) on the basis of reciprocity. Israel has concluded agreements with over 30 countries including: Argentina, China, Germany, India, Kazakhstan, Poland, Romania, South Korea, Turkey, South Africa and more.
International Institutions
Israel has been a member of the WTO since its establishment in 1995.
Israel is one of the signatories of the WTO Government Procurement Agreement (GPA), which offers mutual market access for government purchase to its members.
Israel is an observer and active participant in several committees and working parties within the OECD, including the Industry Committee and the Committee on Science and Technology Policy. Israel has recently been chosen as a membership candidate with the OECD.
Israel is also a member of the 35 country Euro-Mediterranean Partnership, a framework for political, economic and social relations between European and non-European Mediterranean states.
Israel’s Trade Policy Goals
Expand the network of international agreements designed to promote trade.
Facilitate market access and neutralize non-tariff barriers.
Deepen economic activities in old and new markets.
Improve Israel’s export and investment promotion infrastructure.
Create an attractive climate for potential investors.
Enhance the competitiveness of Israeli industry in domestic and foreign markets.