INTRODUCTION

International trade plays a vital role in the economy of the State of Israel. Indeed, in recent years, the Israeli economy has integrated into the global trading system in a rapid and efficient manner, by implementing multilateral and bilateral trade agreements, as well as by pursuing a unilateral process of trade liberalization and structural reforms.

In harmony with the policy steps, aiming at the full integration of the Israeli economy into global trade trends, the Israeli economy has undergone a substantial process of structural reforms. In a relatively short time the Israeli economy has developed into a liberalized marketplace trading in a wide range of manufactured goods and services worldwide.

Throughout the 1990’s, mass immigration from the former Soviet Union, proactive economic policies, fiscal and monetary reforms pursued by the Israeli government, initiated a period of innovation and growth. The Israeli economy became open to competition from within and without, driven by the private sector. Intense entrepreneurial activity became the hallmark of the business environment, attracting the attention of foreign and local investors. The Israeli technological, research and knowledge based industries have gained world wide recognition and have served as an engine for economic growth. Consequently, in less than two decades, export trading has risen fivefold, industrial exports sevenfold and exports of machinery, electronics and IT products have risen over tenfold.

(1) TRADE POLICY
Israel's trade policy objectives are as follows:
- Continued integration of the Israeli economy into the global trading system, through the use of policy instruments that relate to trade in goods, services, investments, competition, environment, intellectual property, development and others.
- Promoting and maintaining Israel's export competitiveness by expanding and updating the network of international agreements designed to promote trade, facilitate market access, neutralize non-tariff barriers and achieve sustainable economic growth.
- Increasing the efficiency of resource allocation, by enhancing reforms that aim at the introduction of greater competition and increased transparency in the domestic market.
- Creating an attractive climate for investors, businesspeople, consumers and the public as a whole.
Israel's trade policy is enhanced by a wide range of international agreements and commercial arrangements with countries and international bodies. In recent years, the Government of Israel has been pursuing its international trade policies in a well coordinated effort, along three paths in parallel: multilateral, bilateral and unilateral.

WTO
Israel is a founding and active member of the WTO. Israel has respects and supports  the fundamental  principles and norms of the WTO i.e. non-discrimination, rule based system, transparency, consensus in decision-making, fair trade, progressive liberalization and special & differential treatment for Developing countries and Least Developed countries.

Israel supports the Doha Development Round of negotiations in the WTO, and hopes it will come to a successful conclusion.

Israel has faithfully implemented its Uruguay Round obligations.  It took an active part in the negotiations on basic telecommunications and financial services. Its commitments under the Forth and Fifth Protocols of GATS reflect open and liberal policies, as well as its willingness to achieve even greater liberalization.

Israel has also been actively participating in plurilateral trade arrangements initiated under the framework of the WTO such as the Government Procurement Agreement (GPA).

Israel was among the first group of WTO Member countries who signed on the Information Technology Agreement (ITA), in 1997. That Agreement called for the elimination of tariff duties on telecommunications equipment, computers and related equipment on an MFN basis.

(2) BILATERAL TRADE AGREEMENTS
Israel’s bilateral trade agreements cover a substantial portion of Israel’s international trade.
Israel has had free trade agreements with its major trading partners for many years - with the European Union since 1975, with the United States since 1985, as well as with the EFTA states since 1993.  In November 1995, Israel and the European Union concluded a more comprehensive agreement to cover wide aspects of economic relations beyond trade in goods, enabling Israel’s participation in the European Union’s Research and Development Framework Programs.

In recent years Israel and the EU have signed several agreements and protocols to further liberalize trade in agricultural goods, to include Israel in the Pan-European system of cumulation of origin, and the participation of Israel in the European space project of Galileo. During the last two years Israel and the EU have been involved in a wide ranging dialogue within the framework of the European Neighbourhood Policy. This includes issues such as negotiations on standardization, services and dispute settlement procedures.

 To further open markets and to maintain Israel's exports competitiveness in European and North-American markets, free trade agreements have also  been signed with Canada (1996), Turkey (1997), and Mexico (2000).

Israel continues to explore new initiatives to expand its market access to other countries through either multilateral or regional agreements. Recently, Israel has been focusing its attention on Asia and Latin America, in the light of the growing importance of these regions in world trade. Israel and the MERCOSUR have concluded a framework agreement on trade which forms the basis on which the parties are currently negotiating a Free Trade Area agreement.

Economic relations with its neighbours in the Middle East are of particular importance to Israel.  Israel has also initiated and signed regional trade arrangements; Qualified Industrial Zone (QIZ) Agreements, operating under the framework of the Israel-US free trade area agreement, have been concluded with Jordan (1997) and Egypt (2004). The QIZ Agreements have contributed enormously to the bilateral growth of trade between Israel and Jordan on the one hand and Israel and Egypt on the other hand. Israel is confident that regional economic cooperation will contribute to the peace process and to the well-being of all people in the region.

(3) UNILATERAL TRADE LIBERALIZATION
In recent years, Israel has adopted a more liberal and open trade policy.  An Import Policy Department has been established within the Foreign Trade Administration. Its mandate is to explore ways to further facilitate the flow of trade into, and out of, the Israeli market as well as to carry out liberalization steps. In the framework of the above-mentioned policy objectives, Israel has unilaterally liberalized its import policy regarding a relatively large number of countries, which had previously been subject to the import licensing mechanism.

The updated  Free Import Order of 2006 entered into force in July 2006, this order deals with free imports of goods into Israel subject to import licensing requirements and/or standards, so as to ensure the safety and security of consumers and the public as a whole. As a result, the Government of Israel has introduced more transparency into the import licensing procedures, thereby removing bureaucratic barriers to trade.

(4) OECD
Israel has declared its interest and readiness to accede to the Organization for Economic Cooperation and Development (OECD) and is working actively to achieve this goal. In fact, Israel enjoys observer status in a substantial number of OECD Committees and Working Groups.

In 2002 Israel adhered to The OECD Declaration on International Investment and Multinational Enterprises, giving Israel full Member status in the Investment Committee and Working Party.  Likewise Israel adhered to the Mutual Acceptance of Data in the Assessment of Chemicals in the framework of the Committee on Chemicals and again received full Member status to the Working Party on Chemicals.