The Free Trade Agreement between the EFTA States and Israel was signed in Geneva, Switzerland, on 17 September 1992. The agreement entered into force on 1 January 1993.
The Agreement covers trade in industrial products as well as fish and marine products. In addition, bilateral agricultural arrangements between the individual EFTA countries and Israel have been concluded which form part of the instruments creating the free trade area.
Among the objectives of the Agreement (Article 1) are the progressive liberalisation of trade in goods in conformity with Article XXIV of the GATT. As of 1 January 1993 virtually all customs duties on trade in industrial goods and fish and other marine products were eliminated. The Agreement includes provisions relating to the elimination of customs duties and other trade barriers as well as other trade-related disciplines such as rules of competition, protection of intellectual property, public procurement, state monopolies, state aid, and payments and transfers. Under the Agreement a Joint Committee is established which supervises the Agreement.
The Agreement consists of a total of 37 Articles, a Record of Understanding, eight Annexes (I to VIII), and four Protocols (A to D) covering the following subjects:
- Trade in Goods
- Public Procurement
- Intellectual Property
- State Aid
- Joint Committee and Dispute Settlement
Trade in Goods
Israel is an important trading partner for the EFTA States in Eastern Europe and an important market for its exports, with significant growth potential. Bilateral trade in goods in 2001 amounted to 1156, 755 million USD (EFTA exports amounting to 825, 493 million USD, whereas Israel's exports to the EFTA States represented 331,262 million USD.
Rules of Origin
The rules of origin for industrial goods (Protocol B) concerning the definition of the concept of originating products and the methods for administrative co-operation, are based on the current pan-European model, maintaining the general structure and the substance of the European standard rules. The specific list rules (Annex II to Protocol B) are also based on the current pan-European model.
The Agreement provides for effective market access for industrial goods in terms of tariffs and rules of origin, creating EFTA and EU parity for EFTA exports to Israel. As from entry into force all industrial goods originating in the EFTA States or Israel enjoyd duty free access (Article 4).
Fish and marine products
The Agreement covers trade in all fish and other marine products (Article 2 and Annex II). The EFTA States and Israel grant duty free access on virtually all imports of fish products after the end of the transitional period on 31 December 2003.
Trade in agricultural products is covered in three bilateral agricultural agreements negotiated between the respective EFTA State (Iceland, Norway and Switzerland/Liechtenstein) and Israel.
These agreements form part of the instruments establishing the free trade area and are subject to the relevant disciplines for trade in goods in the main agreement.
They provide for substantial concessions on both sides, while taking into account the respective sensitivities. Each agreement contains specific rules of origin, generally based on the “wholly-obtained” criteria.
The Article on public procurement (Article 14) contains a review clause with a view to further liberalization of the public procurement markets in the Partner countries.
The provisions on protection of intellectual property rights (Article 15 and Annex V) covers, inter alia, patents, trademarks and copyright and geographical indications.
The level of protection in certain areas goes beyond what is stipulated under the WTO Agreement on Trade Related aspects of Intellectual Property, taking into account the principles of most favoured nation treatment and of national treatment.
Regarding competition (Article 17), the agreement includes provisions on co-operation and exchange of information with the aim of ensuring and facilitating the enforcement of the Parties' respective competition laws.
State Aid The Agreement contains comprehensive and specific rules governing the granting of state aid by public authorities of the partner countries (Article 18). The objective of these provisions is to ensure that aid granted by the authorities to private entities do not distort, or threaten to distort, competition among undertakings in the applicable territories of the agreement.
Joint Committee and Dispute Settlement
A Joint Committee comprising the EFTA States and Israel supervises the implementation of the free trade agreement (Articles 26 and 27).
Consultations are the fundamental mechanism of dispute settlement between the FTA partners. The agreement implies that the Parties are to endeavour to solve any differences between them on the interpretation and application of the agreement by direct consultations, and, if need be, through consultations in the Joint Committee. For cases where the consultations do not led to a satisfactory solution, the Parties may revert to arbitration (Article 25bis). Annex VIII (Annex VIII) governs the constitution and functioning of the tribunal.
Annexes, Protocols and Record of Understanding
|Decision||Subject||Adopted||Entry into force|
|No. 1/2006||Amendments to Articles 18 and 23 and Annex II, and deletion of Annexes VI and VII concerning State Aid||03.07.2006||05.07.2010|
|No. 4/2005||Amendment to Article 22 concerning balance of payment difficulties||15.06.2005||11.07.2008|
|No. 3/2005||Protocol E on mutual administrative assistance in customs matters||15.06.2005||11.07.2008|
|No. 2/2005||Amendment to Protocol B||15.06.2005||01.07.2005|
|No. 1/2005||Administrative Arrangement concerning the implementation of Protocol B and Annex II of the bilateral agricultural agreements||15.06.2005||01.07.2005|
|No. 2/2003||Annex II||01.08.2003||01.08.2003|
|No. 1/2003||Annex I||01.08.2003||01.08.2003|
|No. 2/1999||Deletion of Annex IV||24.06.1999||24.06.1999|
|No. 1/1999||Amendment to Annex II||24.06.1999||01.01.2000|
|No. 6/1997||Amendment to Annex VI to Protocol B||12.11.1997||01.01.1998|
|No. 5/1997||Introduction of a new Article 25 Bis and Annex VIII on arbitration procedure||12.11.1997||29.08.2006|
|No. 4/1997||Amendment to Annex IV (deleted by Decision No. 2/1999)||12.11.1997||12.11.1997|
|No. 3/1997||Deletion of Annex III||12.11.1997||12.11.1997|
|No. 2/1997||Deletion of Protocol C||12.11.1997||12.11.1997|
|No. 1/1997||Amendment to Annex I||12.11.1997||12.11.1997|
|No. 5/1996||Amendment to Article 37 concerning depositary of the Agreement||14.02.1996||13.05.2004|
|No. 4/1996||Amendment of Annex IV (deleted by Decision No. 2/1999)||13.02.1996||13.02.1996|
|No. 3/1996||Amendment of Annex III (deleted by Decision No. 3/1997)||13.02.1996||13.02.1996|
|No. 2/1996||Amendment to Protocol C (deleted by Decision No. 2/1997)||13.02.1996||13.02.1996|
|No. 1/1996||Amendment to Protocol A||13.02.1996||13.02.1996|
|No. 4/1993||Amendment to, and corrections of technical errors in Annexes and Protocols to the Agreement||11/12.11.1993||12.11.1993|
|No. 3/1993||Amendment to Protocol A||11/12.11.1993||12.11.1993|
|No. 2/1993||Sub-committee on customs and origin matters||11/12.11.1993||12.11.1993|
|No. 1/1993||Rules of Procedure of the Joint Committee||11/12.11.1993||12.11.1993|