Israel - Country Commercial Guide
Trade Agreements

Describes bilateral and multilateral trade agreements that this country is party to, including with the United States.

Last published date: 2021-09-09

Israel has adopted a liberal import policy. In addition to its Free Trade Agreement (FTA) with the United States, it has FTAs with Bulgaria, Canada, the Czech Republic, Hungary, Mexico, Poland, Romania, the Slovak Republic, Slovenia, Turkey, the EU, and EFTA (Iceland, Liechtenstein, Norway, and Switzerland). In 2011 a trade agreement was signed with the MERCOSUR countries (Argentina, Brazil, Paraguay, Uruguay, and Venezuela), and agreements with India and China are under discussion. Israel also has a preferential trade arrangement with Jordan and maintains a customs union with the Palestinian Authority. In 2005, the European Union began imposing customs duties on goods manufactured by Israeli companies located in the West Bank.

In 1997, Congress amended the law governing the U.S.-Israel FTA to enable the creation of so-called qualifying industrial zones (QIZs) with Jordan and Egypt. Jordan took advantage of this opportunity beginning in 1997. Under the agreement, products manufactured in Jordan enjoy duty and quota-free access to the U.S. market if, inter alia, they contain a certain minimum percentage of Israeli inputs. As a result of the QIZ agreement, exports to the United States grew significantly. In 2001, Jordan and the U.S. signed an FTA which allowed duty free access to the U.S. for Jordanian goods, independent of Israeli content. The FTA eliminated the significance of the Israel-Jordan QIZ agreement in terms of joint Israeli-Jordanian manufacturing and exports to the U.S.

Egypt signed the QIZ agreement in December 2004. Egyptian products manufactured within a designated zone with 10.5% Israeli inputs may enter into the U.S. duty free. Exports to the United States under the program approach $1 billion and consist mainly of textiles. A list of current Egyptian QIZ-eligible companies and zones can be obtained at http://www.qizegypt.gov.eg/. All products manufactured in the West Bank and Gaza also may enter the U.S. duty free.