WORLD TRADE
ORGANIZATIONWT/REG110/3
30 January 2002
(02-0473)
Committee on Regional Trade Agreements Original:  English
EURO-MEDITERRANEAN AGREEMENT BETWEEN
THE EUROPEAN COMMUNITIES AND ISRAEL
Communication from the Parties
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
The Euro-Mediterranean Agreement establishing an association between the European
Communities and their Member States, of the one part, and the State of Israel, of the other part, wassigned on 20  November 1995 and entered into force on 1st June 2000.
2. Type of Agreement
The Agreement establishes an association between the Parties. It reinforces the existing
free-trade area between the Community and Israel.
The objectives of the Agreement include: expansion of trade in goods and services; reciprocal
liberalisation of the right of establishment; the further progressive liberalisation of government
procurement; the free movement of capital; and the intensification of co-operation in science and
technology; thus to foster in the Parties the ad vance of economic activity, the improvement of living
and employment conditions, and increased productivity and financial stability.  The agreement also
encourages regional co-operation and co-operation in other areas of common interest.
3. Scope
Industrial, agricultural and fisheries products: the Agreement covers all Chapters of the
Harmonised System (1-97).
4. Trade Data
EU imports from Israel in 2000 amounted to €9,876 million.  EU exports to Israel in the same
period amounted to €15,963 million.  Products other than agricultural, food or fisheries products
constitute the most substantial share of trade and represent more than 94.6 per cent of total trade (see
annexed statistical data).WT/REG110/3
Page 2
II. TRADE PROVISIONS
1. Import Restrictions
1.1 Duties and charges
Industrial products originating in Israel are imported into the Community free of customs
duties and charges having equivalent effect and without quantitative restrictions or measures having
equivalent effect.
Customs duties and charges having equivalent effect applicable on import into Israel of
products originating in the Community are imported into Israel free of customs duties and chargeshaving equivalent effect.
1.2 Quantitative restrictionsQuantitative restrictions on imports and measures having equivalent effect between Israel and
the EC are prohibited.
1.3 Common external tariffThe Agreement does not include any provision for the establishment of a common external
tariff.
2. Export Restrictions
The Agreement prohibits the application of customs duties or measures having equivalent
effect on exports between the EC and Israel.  Quantitative restrictions on exports and measures havingequivalent effect between Israel and the EC are also prohibited.
3. Rules of Origin
The definition of the concept of “originating products” is set out in Title II of Protocol
Number 4 of the Agreement.
Evidence of the originating status of products is furnished by the EUR.1 movement certificate
or by a declaration given by the exporter on an  invoice, a delivery note or any other commercial
document.
The concept of bilateral cumulation with materi als originating in the Community is treated in
Article 3 of Title II of Protoc ol Number 4 of the Agreement.
4. Standards
The Agreement provides that the Parties take appropriate steps to reduce differences in
standardisation and conformity assessment. The EC and Israel undertake to conclude, where
appropriate, agreements on mutual recognition in the field of conformity assessment.  Until now, aseparate agreement on the recognition of Good La boratory Practices (GLP) was signed in 1999 and
entered into force in May 2000.   GLP is basically a set of rules on how tests should be carried out,
recorded, animals be quarantined, fed, treated etc so that tests are reproducible and reliable.  This
agreement eliminates costly and duplicative testing of chemicals moving between Israel and the EU.WT/REG110/3
Page 3
5. Safeguards
The EC or Israel may take appropriate measures, where the increase in imports of a product
occurs in such quantities and under such conditions as to cause or threaten to cause:
- serious injury to domestic producers of like or directly competitive products in the
territory of one of the parties or
- serious disturbances in any sector of the economy or difficulties which could bring
about serious deterioration in the economic situation of a region.
In the case of serious balance of payment difficulties, Member States of the EU or Israel may
adopt for a limited period restrictions on current transactions, in accordance with the conditions laiddown within the framew ork of the GATT and with Articles VII and XIV of the Articles of Agreement
of the International Monetary Fund.  These restrictions may not go beyond what is strictly necessary
to remedy the balance of payments situation.
6. Anti-Dumping and Countervailing Measures
If one of the parties finds that dumping is taking place in its trade with the other party, the EC
or Israel may take appropriate measures in accordance with Article VI of GATT, its related internal
legislation and respecting the information exchange procedures established by the Agreement.
7. Subsidies and State-Aid
Any public aid which distorts or threatens to distort competition by favouring certain
undertakings or the production of certain goods is incompatible with the proper functioning of the
Agreement.
The Member States and Israel shall progressively adjust, without affecting commitments
made under GATT, any state monopolies of a commercial character so as to ensure that, by the end of
the fifth year following the entry into force of th e Agreement, no discrimination exists regarding the
conditions under which goods are procured and marketed between nationals of the Member States and
of Israel.
8. Sector-Specific Provisions
8.1 Textiles
There are no specific provisions for textiles products.8.2 Agricultural and fisheries products
(a) Agricultural products originating in Israel benefit on import into the EC from the
provisions set out in Protocol Number 1.
For more than 140 products (about 260 8-digit tariff lines, notably fruit and
vegetables) originating in Israel, customs duties are eliminated or reduced.  For
products where the customs tariff foresees the application of an ad valorem  duty,
rates of reduction apply only to the ad valorem  duty.  For certain products, customs
duties are eliminated within the limits of tariff quotas or in the framework of
reference quantities.WT/REG110/3
Page 4
(b) Agricultural products originating in the Community benefit on import into Israel from
the provisions set out in Protocol Number 2.
Israel applies reduced customs duties to the Community for about 90 products, mostly
within the limits of tariff quotas.
(c) At the latest three years after the entry into force of the Agreement the Community
and Israel will examine the possibility of granting each other concessions in trade in
fisheries products.
(d) The Agreement specifies that the EC and Israel will progressively establish a greater
liberalisation of their trade in agricultural products of interest to both parties.  To this
end, from 1 January 2000 the Community and Israel will assess the situation of their
trade in agricultural products with a view to determining the liberalisation measuresto be applied by the Community and Israel with effect from 1 January 2001.
(e) Sanitary and Phytosanitary measures shall apply to certain cut flowers and fruits as
set in Protocol Number 3.
8.3 Processed agricultural products
(a) The provisions on free movement of goods do not preclude the retention by the
Community of an agricultural component on imports of certain processed agricultural
products originating in Israel, listed in Annex II with the exception of 4 products
listed in Annex III.
This agricultural component is calculated on the basis of the difference between the
price in the Community market of the agricultural products used in the production
and the price of imports from third countries .
(b) Likewise, the provision on free movement of goods shall not preclude the retention
by Israel of an agricultural component on imports of certain processed agricultural
products originating in the Community, listed in Annex IV with the exception of 17products listed in Annex V.
The agricultural component is calculated along the same lines as specified for the
Community.
(c) In the trade between the Community and Israel, some 15 products are subject to a
reduction in the agricultural components, listed in Annex VI.
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and Reservations
The Agreement does not preclude prohibitions or restrictions on imports, exports or goods in
transit justified on grounds of public morality, public policy, public security, the protection of health
and life of humans, animals or plants, the protection of national treasures of artistic, historic orarchaeological value or the protection of intellectual and commercial property or rules relating to gold
and silver.WT/REG110/3
Page 5
A contracting party may take measures it considers necessary for its security and defence, in
the event of serious internal disturbances, in time of war or serious international tension.
3. Dispute Settlement Procedures
Either Party may refer to the Association Council any dispute relating to the application or
interpretation of the Agreement: differences are settled by means of a decision.
In the contrary case, either Party may notify th e appointment of an arbitrator to the other
Party, which must then appoint a second arbitrator within two months.
The Association Council shall appoint a third arbitrator.  The arbitrators’ decisions are taken
by majority vote.
4. Relation with other Trade Agreements
(i) The Agreement does not preclude the maintenance or establishment of customs
unions, free-trade areas or arrangements for frontier trade insofar as they do not have
the effect of altering the trade arrangements provided for in the Agreement.
(ii) The EU is ready to envisage cumulation of origin in Israel’s trade with other
Mediterranean countries.
5. Institutional Provisions
An Association Council, at Ministerial level, examines any significant problems arising in the
framework of the Agreement; an Association Committee is responsible for management of the
Agreement and areas for which the Associ ation Council has delegated power to it.
6. Duration
The Agreement is concluded for an unlimited period.  Either party may denounce the
Agreement by notifying the other party.  Six m onths after such notification the Agreement would
cease to apply.
7. Previous Agreements
From its entry into force, the Association Agreement replaced the Co-operation Agreement
between the European Community and the State of Israel signed in 1975.
IV. OTHER
Provisions on Right of Establishment and Services
The Parties agree to widen the scope of the Agreement to cover the right of establishment of
one Party’s firms on the territory of the other and liberalisation of the provision of services by one
Party’s firms to consumers of services in the othe r.  The Agreement specifies that the Association
Council shall make the necessary recommendations for the implementation of this objective and
further that the Council should make a first assessment of the achievement of this objective no later
than three years after the Agreement enters into force.WT/REG110/3
Page 6
Intellectual, Industrial and Commercial Property Rights
The Agreement commits the Parties to granting and ensuring adequate and effective
protection of intellectual, industrial and commercial  property rights in accordance with the highest
international standards.  To this end, the Agreement identifies a number of relevant multilateralconventions, to which Israel should accede or which it should ratify.  In addition, the Parties confirm
the importance they attach to the obligations arising from certain other relevant multilateral
conventions, to which they are both already party.  If any problems occur in this area affecting trading
conditions, the Parties agree to consult bilaterally in the Association Committee in order to resolve
them.
Public Procurement
The Community and Israel agree to take measures with a view at a mutual opening of their
government procurement markets and the procurement market of undertakings in the utilities sectors
beyond what has been mutually covered under the WTO Government Procurement Agreement, to
which they are both signatories.
Procurement is the object of two separate agreements on government procurement and
procurement in telecommunications markets, both sign ed in 1997.  Further to these agreements Israel
opened a number of services sectors to all GPA members.
Co-operation
The Agreement is not limited to the establishment of a free-trade area but also establishes a
partnership between the two parties with the obje ctive of bringing closer the economies of the
Community and Israel or producing growth and employment. This co-operation is targeted at areas ofactivity affected by the agreement and more particularly by the liberalisation of trade between Israel
and the European Community.
Co-operation is also undertaken in the area of science and technology according to the
provisions and arrangements of a separate agreement. The economic co-operation involves economic
co-operation in a broad sense covering a large number of areas, social co-operation as well as co-
operation on cultural and audio-visual matters.WT/REG110/3
Page 7
ANNEX
Trade Data
Note: The following tables show the development of trade between the EC and Israel over the
period 1997-2000.  For ease of comparison, figures are also given for the development of EC
trade with all third countries.
Table 1
Share of Israel in Total EU Trade 1997-2000
(Billion ECU/EUR)
Extra-EU Israel Year
Exports Imports Total Exports Imports Total
1997 721.1 672.6 1,393.7 11.5 6.3 17.8
1998 733.4 710.5 1,444.0 10.9 6.9 17.8
1999 760.2 779.2 1,539.4 12.9 7.6 20.5
2000 936.0 1,025.5 1,961.6 15.7 9.9 25.6
Table 2
Share of Israel in Total EU Trade 1997-2000
(Percentage)
Extra-EU Israel Year
Exports Imports Total Exports Imports Total
1997 51.7 48.3 100.00 1.6 0.9 1.3
1998 50.8 49.2 100.00 1.5 1.0 1.2
1999 49.4 50.6 100.00 1.7 1.0 1.3
2000 47.7 52.3 100.00 1.7 1.0 1.3
Source:  Eurostat COMEXTWT/REG110/3
Page 8
EU15 trade 1997-2000 with Israel (million €)
imports exports balance total trade
HS Section 1997 1998 1999 2000 1997 1998 1999 2000 1997 1998 1999 2000 1997 1998 1999 2000
011 Extra-EU15 31-May-01
Total 6,274 6,921 7,645 9,876 11,512 10,892 12,860 15,693 5,238 3,971 5,215 5,817 17,787 17,814 20,506 25,569
of which:
01 Animals & animal products 22 21 20 24 55 58 45 42 32 37 25 17 77 79 65 66
02 Vegetable products 553 596 566 581 95 76 87 128 -458 -519 -479 -454 647 672 653 709
03 Animal or vegetable fats 23231 6 2 1 1 8 2 01 4 1 8 1 6 1 81 8 2 4 2 0 2 3
04 Prepared foodstuffs 164 170 181 210 380 371 337 372 216 201 156 163 544 541 517 582
05 Mineral products 130 159 134 262 85 68 140 344 -45 -91 6 82 216 227 274 606
06 Chemical products 826 850 993 1,213 1,083 1,144 1,224 1,374 257 295 232 160 1,909 1,994 2,217 2,587
07 Plastics & rubber 445 484 505 617 498 539 550 634 53 55 44 17 943 1,023 1,055 1,251
08 Hides & skins 10 11 11 12 25 23 18 22 15 12 7 10 35 34 29 34
09 Wood & wood products 8 8 8 10 154 145 140 164 146 138 132 155 161 153 148 174
10 Wood pulp products 49 51 55 74 299 319 339 396 250 267 285 322 348 370 394 471
11 Textiles & textile articles 516 492 509 503 525 509 466 484 10 16 -43 -20 1,041 1,001 974 987
12 Footwear, headgear 15 14 14 11 91 90 78 87 76 75 64 76 105 104 93 98
13 Articles of stone, plaster, cement, asbestos 35 41 45 66 283 261 247 262 248 220 203 196 318 302 292 327
14 Pearls, (semi-)precious stones, metals 1,325 1,273 1,445 1,995 2,868 2,346 3,247 3,923 1,542 1,073 1,802 1,929 4,193 3,620 4,692 5,918
15 Base metals & articles thereof 256 315 320 395 739 665 586 665 484 350 266 269 995 980 906 1,060
16 Machinery & mechanical applicances 1,315 1,642 1,897 2,763 2,273 2,425 2,877 3,887 957 783 980 1,124 3,588 4,068 4,775 6,650
17 Transportation equipment 62 83 74 129 1,241 955 1,057 1,495 1,179 872 983 1,367 1,303 1,039 1,131 1,624
18 Instruments - measuring, musical 355 433 580 676 272 354 436 562 -83 -79 -144 -113 627 787 1,016 1,238
19 Arms & ammunition 31 7 24 25 6 3 4 4 -25 -4 -20 -21 37 10 28 29
20 Miscellaneous 60 73 82 99 263 269 257 310 203 196 174 211 323 341 339 408
21 Works of art 13 15 6 14 8 27 9 6 -5 12 3 -8 21 43 14 20
Other 82 181 175 194 254 224 698 511 172 42 523 318 336 405 873 705
Statistical Regime 4 (Source Eurostat COMEXT 28-May-01) TRADE/D/1  Paul VERBURGTIsrael
0624 IsraelWT/REG110/3
Page 9EU15 trade 1997-2000 with EXTRA-EUR (million €)
imports exports balance total trade
HS Section 1997 1998 1999 2000 1997 1998 1999 2000 1997 1998 1999 2000 1997 1998 1999 2000
011 Extra-EU15 31-May-01
Total 672,568 710,538 779,216 1,025,544 721,128 733,428 760,172 936,025 48,561 22,890 -19,044 -89,519 1,393,696 1,443,966 1,539,388 1,961,568
of which:
01 Animals & animal products 12,227 13,392 13,430 15,372 10,897 10,090 10,629 12,056 -1,330 -3,302 -2,801 -3,316 23,124 23,481 24,059 27,428
02 Vegetable products 25,438 25,098 23,940 25,079 9,758 9,368 9,852 11,188 -15,680 -15,730 -14,089 -13,891 35,196 34,467 33,792 36,267
03 Animal or vegetable fats 2,390 2,789 2,635 2,360 2,978 3,223 2,620 2,669 588 434 -15 309 5,368 6,012 5,255 5,028
04 Prepared foodstuffs 19,019 19,587 20,146 22,152 27,746 27,332 26,437 29,923 8,726 7,745 6,291 7,771 46,765 46,919 46,584 52,075
05 Mineral products 95,742 72,327 88,453 159,793 19,632 16,876 19,240 33,254 -76,110 -55,450 -69,214 -126,539 115,374 89,203 107,693 193,047
06 Chemical products 46,237 49,736 53,424 63,662 81,774 85,324 95,358 113,290 35,537 35,589 41,934 49,628 128,011 135,060 148,783 176,952
07 Plastics & rubber 19,323 21,103 21,726 26,325 27,148 27,515 28,751 35,212 7,825 6,412 7,025 8,887 46,472 48,618 50,478 61,537
08 Hides & skins 8,498 8,239 7,724 10,201 7,375 6,471 6,484 8,964 -1,123 -1,768 -1,241 -1,237 15,874 14,709 14,208 19,165
09 Wood & wood products 10,974 11,451 12,415 14,596 4,928 5,204 5,766 6,991 -6,046 -6,247 -6,649 -7,605 15,902 16,656 18,181 21,587
10 Wood pulp products 11,997 12,616 13,112 17,018 19,764 19,664 20,172 24,457 7,767 7,048 7,060 7,440 31,760 32,281 33,284 41,475
11 Textiles & textile articles 55,253 57,954 59,625 69,598 34,725 35,322 34,943 40,562 -20,528 -22,632 -24,682 -29,037 89,979 93,276 94,568 110,160
12 Footwear, headgear 8,308 8,264 9,172 10,904 6,313 6,107 5,758 6,823 -1,995 -2,157 -3,414 -4,081 14,621 14,371 14,930 17,727
13 Articles of stone, plaster, cement, asbestos 5,091 5,677 6,341 7,832 12,916 12,936 13,016 15,116 7,825 7,259 6,674 7,283 18,007 18,613 19,357 22,948
14 Pearls, (semi-)precious stones, metals 23,890 26,975 26,540 35,644 19,287 18,005 21,417 28,948 -4,603 -8,970 -5,123 -6,695 43,177 44,979 47,957 64,592
15 Base metals & articles thereof 40,315 44,664 42,888 57,384 46,947 45,807 43,145 52,839 6,633 1,143 257 -4,545 87,262 90,471 86,033 110,223
16 Machinery & mechanical applicances 173,128 197,538 222,885 298,486 226,484 235,496 239,830 297,536 53,356 37,959 16,945 -950 399,612 433,034 462,716 596,022
17 Transportation equipment 56,404 69,178 81,613 90,474 104,706 110,905 112,647 139,300 48,302 41,727 31,034 48,825 161,111 180,083 194,259 229,774
18 Instruments - measuring, musical 27,814 30,261 33,923 42,442 28,129 29,259 31,426 39,453 315 -1,003 -2,497 -2,989 55,944 59,520 65,348 81,895
19 Arms & ammunition 603 510 751 601 1,326 1,661 1,271 1,571 724 1,151 520 970 1,929 2,170 2,022 2,172
20 Miscellaneous 17,529 19,134 21,833 27,147 15,177 15,326 15,817 18,347 -2,353 -3,808 -6,016 -8,800 32,706 34,459 37,650 45,493
21 Works of art 1,797 2,574 2,420 2,671 2,934 3,034 3,410 4,581 1,136 460 990 1,910 4,731 5,608 5,831 7,252
Other 10,589 11,472 14,218 25,803 10,183 8,504 12,183 12,946 -407 -2,969 -2,035 -12,857 20,772 19,976 26,402 38,749
Statistical Regime 4 (Source Eurostat COMEXT 28-May-01) TRADE/D/1  Paul VERBURGTEXTRA-EUR
1011 EXTRA-EURWT/REG110/3
Page 10
__________balance balance
HS Section M€ % Total M€ % Total M€ M€ % Total M€ % Total M€ imports exports
31-May-01
Total 9,876 100.0% 15,693 100.0% 5,817 1,025,544 100.0% 936,025 100.0% -89,519 1.0% 1.7% 1.59
of which:
01 Animals & animal products 24 0.2% 42 0.3% 17 15,372 1.5% 12,056 1.3% -3,316 0.2% 0.3% 1.72
02 Vegetable products 581 5.9% 128 0.8% -454 25,079 2.4% 11,188 1.2% -13,891 2.3% 1.1% 0.22
03 Animal or vegetable fats 3 0.0% 20 0.1% 18 2,360 0.2% 2,669 0.3% 309 0.1% 0.8% 7.52
04 Prepared foodstuffs 210 2.1% 372 2.4% 163 22,152 2.2% 29,923 3.2% 7,771 0.9% 1.2% 1.77
05 Mineral products 262 2.7% 344 2.2% 82 159,793 15.6% 33,254 3.6% -126,539 0.2% 1.0% 1.31
06 Chemical products 1,213 12.3% 1,374 8.8% 160 63,662 6.2% 113,290 12.1% 49,628 1.9% 1.2% 1.13
07 Plastics & rubber 617 6.3% 634 4.0% 17 26,325 2.6% 35,212 3.8% 8,887 2.3% 1.8% 1.03
08 Hides & skins 12 0.1% 22 0.1% 10 10,201 1.0% 8,964 1.0% -1,237 0.1% 0.2% 1.81
09 Wood & wood products 10 0.1% 164 1.0% 155 14,596 1.4% 6,991 0.7% -7,605 0.1% 2.4% 17.17
10 Wood pulp products 74 0.8% 396 2.5% 322 17,018 1.7% 24,457 2.6% 7,440 0.4% 1.6% 5.33
11 Textiles & textile articles 503 5.1% 484 3.1% -20 69,598 6.8% 40,562 4.3% -29,037 0.7% 1.2% 0.96
12 Footwear, headgear 11 0.1% 87 0.6% 76 10,904 1.1% 6,823 0.7% -4,081 0.1% 1.3% 7.67
13 Articles of stone, plaster, cement, asbestos 66 0.7% 262 1.7% 196 7,832 0.8% 15,116 1.6% 7,283 0.8% 1.7% 3.99
14 Pearls, (semi-)precious stones, metals 1,995 20.2% 3,923 25.0% 1,929 35,644 3.5% 28,948 3.1% -6,695 5.6% 13.6% 1.97
15 Base metals & articles thereof 395 4.0% 665 4.2% 269 57,384 5.6% 52,839 5.6% -4,545 0.7% 1.3% 1.68
16 Machinery & mechanical applicances 2,763 28.0% 3,887 24.8% 1,124 298,486 29.1% 297,536 31.8% -950 0.9% 1.3% 1.41
17 Transportation equipment 129 1.3% 1,495 9.5% 1,367 90,474 8.8% 139,300 14.9% 48,825 0.1% 1.1% 11.62
18 Instruments - measuring, musical 676 6.8% 562 3.6% -113 42,442 4.1% 39,453 4.2% -2,989 1.6% 1.4% 0.83
19 Arms & ammunition 25 0.3% 4 0.0% -21 601 0.1% 1,571 0.2% 970 4.2% 0.3% 0.16
20 Miscellaneous 99 1.0% 310 2.0% 211 27,147 2.6% 18,347 2.0% -8,800 0.4% 1.7% 3.14
21 Works of art 14 0.1% 6 0.0% -8 2,671 0.3% 4,581 0.5% 1,910 0.5% 0.1% 0.44
Other 194 2.0% 511 3.3% 318 25,803 2.5% 12,946 1.4% -12,857 0.8% 4.0% 2.64
Statistical Regime 4 (Source Eurostat COMEXT 28-May-01) TRADE/D/1  Paul VERBURGT0624 IsraelIsrael
market shares Exp-Imp 
ratio
1011 Extra-EUREU15 trade 2000 with Israel
imports exports imports exportsEU15 trade 2000 with EXTRA-EUR Israel / Total