Trade and Economic Cooperation Agreements

Israel has an extensive network of international trade and economic cooperation agreements with countries throughout North America, Europe and Asia including: Free Trade Area Agreements (FTA’s) , bilateral R&D programs, Protection of Investments agreements 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, and to increase the efficiency of resource allocation, Israeli trade policy is aimed at continuing the expansion of its network of international trade agreements.

Free Trade Agreements (FTA)

Israel's Free Trade Agreements serve to facilitate international trade in goods by eliminating or reducing tariffs and other trade barriers between the participating parties.

• Israel enjoys three separate FTA's with all three NAFTA member countries - the U.S., Canada and Mexico - and with 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 duty-free treatment for industrial goods and most of the agricultural products traded between the parties to the agreement.
• Complementing its EU agreement, Israel has also concluded FTAs with the EFTA countries (Switzerland, Norway, Iceland and Lichtenstein) , as well as with Turkey.
• Israel has also signed an Agreement on Trade and Economic Cooperation with the Kingdom of Jordan which includes significant tariff reductions in bi-lateral trade.
• Under the platform of the U.S.-Israel FTA, Israel has signed two separate Qualifying Industrial Zones Agreements (QIZ's) with Jordan and Egypt. These two agreements provide duty free treatment in the United States for products produced in collaboration by Israeli-Jordanian or Israeli-Egyptian companies.
• Israel has recently concluded FTA Agreement with the Mercosur countries (Brazil, Argentina, Uruguay and Paraguay). The agreement is scheduled to come into force in 2008.

International R&D Programs

In parallel to its efforts to develop trade agreements, Israel has also focused its efforts on creating an extensive network of international R&D accords that foster industrial and technological cooperation between Israel and its trading partners:

• 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 the parties. Each has its own independent administration and budget provided by the respective governments. Israel has established bi-national funds with the U.S., 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.  

Other International Economic Agreements and Institutions

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., Brazil, Canada, China, France, Germany, Italy, Japan, the Netherlands, Russia, South Africa, the U.K. and more.

Protection of Investments Agreements

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.

Membership in International Economic Institutions and Organizations

Israel is a Founding Member of the World Trade Organization (WTO), and is committed to all WTO Agreements that cover trade in goods, services, intellectual property, etc.

Israel is one of the signatories of the Government Procurement Agreement (GPA), which offers nondiscriminatory  market access for public tenders.

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 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.

 Source: Invest in Israel-Investment Promotion Center (www.investinisrael.gov.il)