Trade Affairs

Trade Affairs

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    The European Union is Israel's largest trading partner. In 2014, the trade between the two amounted to about 35 million Euro with the EU providing a market for 32% of Israeli exports. In addition to the EU being the world's largest economic entity the geographic proximity and cultural and historical affinity to Israel create a special relationship between the two partners.

    Trade relations between Israel and the EU are conducted on the basis of the Association Agreement. Furthermore, the Action Plan concluded under the European Neighborhood Policy with Israel helped to give new energy and focus to trade and EU-Israel relations in general. The volume of trade has grown steadily over the past decade – except for a decline in 2009 due to the economic crisis. Israeli imports of goods from the EU and exports to the EU are dominated by machinery and transport equipment, chemicals, and other semi-manufactures. On a bilateral basis the United Kingdom, Germany, Netherlands, Italy and France are the main trading partners among the old Member States (EU 15).

    Statistics on EU Israel trade from the European Commission can be found here and here 


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    ​Industry & Trade Office Services

    The Industry & Trade Office in Brussels is responsible for bilateral relations with Belgium and Luxembourg, as well as relations with the European Union Institutions situated in Brussels. The Industry & Trade Office in the Israeli Mission to the EU promotes trade and cooperative technological relations between Israel and the EU.

    In addition, it coordinates activities with European Union Institutions in a wide range of business and commercial realms, while handling requests from companies, organizations and government offices on these topics.

    The Office equally monitors legislation initiatives and programs that impact Israeli industry, and working with EU institution to solve trade disputes.

    The EU formulates hundreds of legislative initiatives and programs and the I&T Office monitors those who might impact Israeli industries, and is actively engaged in working with companies, organizations and various government departments to provide useful information.

     
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  • Main issues in which the I&T Office is involved

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    ​Business Dialogue

    During the negotiations on the Action Plan of the ENP in 2005 Israel and the EU agreed to assemble a forum of industry leaders to provide a framework for enhancing commercial ties on the overall European level. From the European side the Forum is co-chaired by Matthias Doepfner, CEO of the German media group Axel Springer, and from the Israeli side by Hi-Tech entrepreneur Mr. Yossi Vardi. The Forum's first meeting was held in 2007 under the auspices of the Israeli Industry, Trade & Labor Minister and the European Commissioners for Trade and Industry and continued to be held annually until 2011.

      

    Dispute Settlement Mechanism

    The Association Agreement mentions the issue of conflict resolution but only very briefly and not specifically and without outlining the relevant procedures. Therefore, the aim is to reach a new Dispute Settlement Mechanism that will be specific to the trade field. In 2007, discussions on a bilateral agreement of this kind began between Israel and EU, but due to differences that cannot be bridged at this stage the parties have not yet reached an agreement.

     

    Services

    The EU is very interested in promoting negotiations in the field of ​​trade in services and the right to establish companies in all sectors. The intention is the implementation of Article 29 of the Association Agreement, but the main motive for the negotiations is the belief that it is possible to reach an agreement in this issue which will be beneficial to Mediterranean countries – this based on a survey by the World Bank which reached just such a conclusion.

    During the Conference of Trade Ministers held in Lisbon in October 2007, Israel announced that it is ready to begin discussions with the EU on a Bilateral Agreement on Services. Furthermore, several discussions were held between 2008-2009 with the intent to exchange ideas and reach concrete proposals.
    Parallel negotiations on TISA (Trade in Services Agreement) are under way among the 25 companies of the WTO, including Israel and the EU.

      

    R&D Framework Program

    Israel is the only non-European member of the R&D Framework Program of the EU. The cooperation started in 1996 with the accession of Israel to the Fourth Framework Program (FP4) and is the flagship of Israeli-European cooperation. Participation in the program gives universities, researchers and companies, access to funds and grants for projects in many different fields ranging from nanotechnology, information technology and telecommunications to energy and health.

    The current R&D program is called Horizon 2020, the biggest EU Research and Innovation program ever with nearly €80 billion of funding available over 7 years (2014 to 2020). Israel's participation in the program is managed by ISERD – The Israel Europe R&D Directorate. According to ISERD, Israeli institutions have so far received research grants of about €134.5 million.

     

    Galileo

    Galileo is a new generation program of the European satellite navigation system (equivalent to the American GPS and the Russian GLONASS) funded by European governments. Israel joined the project in 2004 being one out of two non-European countries who are members (the second one is China).

    Participation in the program enabled some Israeli companies to participate in European Space Agency tenders for developing parts of the Galileo system. Israel regards its membership in the program as strategic importance of developing ties with Europe in these fields.

    During the visit of Commissioner for Industry Tajani in November 2011, a joint statement was signed with the Minister of Industry, in which the parties agree on continued cooperation in the program. In this context, it was decided to establish an information center on Galileo issues in Israel and the establishment of a Galileo ground station in Israel.

     

    SESAR

    SESAR is a large scale project aimed to upgrade ATM (Air Traffic Management) systems throughout the EU, Switzerland and the EEA countries. This project will include development and research in the field of command and control systems which will include satellites, unmanned aircraft, and sophisticated telecommunication systems.

    Israel has recently decided to join the project as a consortium of Israeli companies under the management of the Ministry of Industry, Trade & Labor. This means Israel will strive to join the Joint Undertaking which will manage the project development phase.

     

    Chemicals

    Exports of chemicals amounted to almost 40% of Israeli exports to the EU in 2014.
    The main legislation on these is the REACH regulation, which came into force in 2007 and deals with the requirements of registration, authorization and assessment of a very large number of chemicals produced or imported by the EU, and the CLP regulation, which came into force in 2009 and deals with requirements for classification, labeling and packaging of chemical substances and mixtures.
    Also, additional legislation is continually being monitored in the field of electronic waste, transportation of hazardous materials, pesticides, fertilizers and more.  ​

    The EU Environmental policies are getting more and more complex making it very difficult for small companies to cope with the costs of registration and licensing for their products in order to export them to the EU countries.