U.S.-Israel Free Trade Agreement
U.S.-Israel Free Trade Agreement & Trade Relations
In 1985, President Ronald Reagan signed the U.S.-Israel Free Trade Agreement. It was the first FTA the United States entered into, and has served as a model for many future trade agreements. The FTA eliminates all custom duties between the two countries, and has resulted in a huge increase in the overall volume of bi-national trade to total over $38 billion in 2015. The U.S. exported over $13.5 billion to Israel in 2015.
Israeli exports to the United States have also increased since the FTA’s implementation. In 2015, Israeli imports to the United States were $24.4 billion, an increase of over 300 percent since 1985. Israel is the 23rd largest export market for U.S. goods and services. California exports to Israel were up considerably from $1.2 billion in 2009 to $1.8 billion in 2015, with manufactured goods accounting for the majority of these exports.
Deputy United States Trade Representative Ambassador Miriam Sapiro and Israel’s Director General of the Ministry of Industry, Trade, and Labor, Sharon Kedmi, this week reached agreement on a process to further their shared commitment to expand trade and investment between the United States and Israel. They applauded progress on trade and investment issues since a meeting between Ambassador Kirk and Minister Ben Eliezer in Washington in October 2010, and agreed to a plan that will guide future discussions and develop further as those discussions evolve. They also agreed to redouble their efforts to make further progress ahead of the U.S.-Israel Free Trade Agreement (FTA) Joint Committee meeting, to be held later this fall.
“The Obama Administration places great importance on the relationship between our countries, and we will continue our collaborative efforts to expand trade and investment opportunities for American and Israeli exporters and investors,” said Ambassador Sapiro.
The two sides also agreed to explore ways to realize fully the potential benefits of the U.S.-Israel trade agreement, including through the further liberalization of trade in services and agriculture and the removal of trade-restrictive measures. Ambassador Sapiro and Director General Kedmi also committed to consider cooperation in other areas, including addressing regulatory issues which might be impeding the movement of goods, services and capital between the two countries, in consultation with relevant stakeholders.
ISRAEL HAD A GREAT ECONOMIC YEAR…NOW WHAT?
EDI ECONOMIC BLOG – JANUARY 8 2013
By Sherwin Pomerantz
The basic economic statistics for 2012 are now beginning to surface and it is clear that economically, in spite of the world’s financial doldrums, Israel did pretty well.
From 2009-2012 Israel experienced economic growth of 14.7%, well ahead of most OECD countries (e.g. US – 3.2%, Germany – 2.7%, Australia – 10.7%, Canada – 4.8%) and much better than the general decline in economic growth in Europe of 1.5%. Israel might have had even better results if not for the continued sabotaging of the natural gas line from Egypt which caused the country to replace that source of energy by purchasing fuel from more expensive suppliers. There is, of course, no telling ultimately what will happen with that situation, as much depends on how the political situation in Egypt evolves.
In 2012, Israel demonstrated economic growth of 3.3%, which was more than double the OECD average of 1.4%. The only two major economies of the world that did better than Israel were India, which saw 4.5% growth, and China which experienced 7.5% growth. Coupled with this growth was a decline in Israeli unemployment to 6.9%, also lower than the OECD average of 8%.
Where Israel really did well last year was in tourism. With 2.9 million tourists in 2012 the country set a new annual record and 2013 looks to be even better, given existing travel agency bookings. The single largest group of tourists came from the US, while other significant sources of tourism included Russia, France, Germany and Britain with a growing cadre of visitors from Asia. This will, no doubt, continue to improve as even countries with which Israel does not have diplomatic relations such as Malaysia, are now permitting their nationals to travel to Israel, especially for religious tourism.
The challenge for the country, of course, is to keep these numbers progressing in the positive direction and to leverage Israel’s position as the world’s second largest source of innovation so as to spur continued economic growth. For the moment, large firms worldwide continue their interest in growing their Israel operations. As examples, Google late last year opened a start-up incubator in Israel and Dutch giant Phillips has also announced the establishment of a new R&D center in the country.
All of this, of course, remains quite amazing in the face of continuing political distress among most of Israel’s neighbors which, in Syria’s case, has resulted in large scale fatalities as well. Israel’s added value is its depth of technological capability along with relative political and financial stability.
EDI continues to encourage its clients and prospects to explore opportunities in Israel further, as the firm is uniquely positioned both to assist foreign entities to gain a foothold locally and to assist local companies to locate strategic partners overseas.