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Israel has entered into several trade agreements in order to strengthen its position in international markets. The most significant agreements are the Free Trade Area Agreement (FTA) with the United States, the Free Trade Area Agreement with the European Union and the Free Trade Area Agreement with the European Free Trade Association States (EFTA). The agreements with the United States, the European Union, and EFTA countries place Israel in the unique position of being a Free Trade Area partner with the principal economic regions worldwide. Thus, Israel is able to intermediate for countries that do not have mutual agreements, provided that the products comply with the provisions of each agreement. In addition, Israel has signed FTA Agreements with Canada and Turkey, the GAAT Agreement, and has been granted preferences under the GSP (General System of Preferences) by the United States, as well by Australia, Austria, Canada, Finland, Japan, New Zealand, Norway, Sweden and Switzerland. As part of the peace process, Israel signed an Agreement for Economic Development with the Palestinian Authority.

In 1985 Israel and the United States entered into the Free Trade Area Agreement. This Agreement was fully implemented on January 1, 1995. The Agreement eliminates all import duties and non-tariff barriers between Israel and the United States. The Agreement allows non-tariff restrictions on agricultural products.
“Rules of origin” exist, which are different from those of the European Agreement, to determine products’ eligibility to benefits from this Agreement.

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In 1995 Israel entered into an Agreement for the establishment of a free trade area with the European Union for industrial products and for some agricultural products. According to this Agreement, most Israeli-made products are exempt from import duties. On its part, Israel gradually reduced import duties on European-made products.
In general, to be eligible for exemption from import duties, the products are required to comply with certain “rules of products’ origin”. These rules require a minimum local added value depending on the origin of materials, manufacturing process, etc. Tariff and non-tariff barriers still exist regarding agricultural products and processed foods in respect of international trade with the European Union.

The Agreement between Israel and EFTA countries became effective on January 1, 1993. The Agreement is intended to eliminate or reduce duties, mainly on industrial goods, and to reduce non-tariff barriers.
This Agreement also has its own “rules of origin”, different from those of the above mentioned agreements.

A Free Trade Area Agreement between Israel and Canada was signed in July 1996 and became effective on January 1, 1997. The Agreement expresses the parties’ intention to gradually eliminate duties on industrial goods and on some agricultural products.
The Agreement with Canada has special advantages since both parties have entered into FTA Agreements with the United States, enabling Israel to include United States origin components in its exports to Canada, and Canadian components in its exports to the United States, without breaching any “rules of origin.”

The agreement, signed in December 2004,  removes all U.S. tariffs on goods produced in Egyptians Qualified Industrial Zones using Israeli inputs. For more information, click here.