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Israel Free Trade Agreement

This year marks the twenty-ninth anniversary of the United States-Israel Free Trade Agreement, which was the first FTA entered into by the United States. It continues to serve as the foundation for expanding trade and investment between the United States and Israel by reducing barriers and promoting regulatory transparency. In 2009, U.S. goods exports to Israel declined by 36 percent to $9.3 billion, while U.S. imports from Israel decreased 18 percent to $18.3 billion.

The central oversight body for the FTA is the United States-Israel Joint Committee. In December 2009, the Joint Committee met to exchange views on issues and concerns related to agricultural market access and telecommunications and government procurement, among other topics. Both governments acknowledged the progress and collaborative work that has taken place since the last meeting of the Joint Committee in Washington, DC which was in October 2007. At the 2009 meeting, the United States and Israel agreed that the two sides would explore discussions of a mutual recognition agreement on telecommunications and explore concerns voiced by U.S. exporters in meeting Israeli customs requirements. They also made progress on a number of market access issues related to standards, customs classification, and technical regulations. Both sides agreed to continue the dialogue through the U.S.- Israel Working Group on Standards and Technical Regulations, which last met in March 2009.

Recognizing in the 1990s that the FTA had not served to liberalize some aspects of bilateral agriculture trade, the United States and Israel concluded an Agreement Concerning Certain Aspects of Trade in Agricultural Products (ATAP), which provided for duty-free or other preferential treatment of certain agricultural products. The 1996 agreement was extended through 2003, and a new agreement was concluded in 2004. In December 2009, the two sides agreed to extend that agreement for a second time, extending through December 31, 2010. The Working Group on Agriculture agreed to meet in early 2010 to continue negotiations of a successor to the 2004 ATAP.

Despite the impasse over agricultural free trade, during 2009, technical experts from the United States and Israel worked together to resolve some existing agricultural trade concerns. The Israelis removed a longstanding obstacle to U.S. pistachio exports to Israel, and the United States opened the U.S. market to Israeli eggplant and resolved customs questions on the transshipment of fresh herbs and flowers. However, many technical barriers still remain for U.S. agricultural products’ entry into the Israeli market.

In connection with the 2009 Special 301 out-of-cycle review (OCR), the United States and Israel are continuing negotiations to resolve longstanding issues with Israel’s intellectual property rights (IPR) regime for pharmaceutical products.