WORLD TRADE
ORGANIZATIONWT/REG124/3
13 March 2003
(03-1414)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN ISRAEL AND MEXICO
Communication from the Parties
I. BACKGROUND INFORMATION ON THE AGREEMENT
1. Membership and Dates of Signature, Ratification and Entry into Force
The Parties to the agreement are The United Mexican States and The State of Israel.  The
Agreement was signed  on 10 April 2000.  The Mexican Senate ratified the Agreement on
30 April 2000 and the Government of Israel informed on 31 May 2001 that the Knesset (Israel
Legislative Body) had ratified the Agreement. The Agreement entered into force for the Parties on1 July 2001.
The Agreement was notified to the Council on Trade in Goods on 22 February 2001, in
accordance with Article XXIV:7(a) of GATT 1994.
2. Type of Agreement
 The Agreement establishes a free trade area in conformity with the definition set out in
Article XXIV: 8(b) of GATT 1994.
3. Scope
The Agreement covers substantially all trade. The products covered are products originating
in Israel or Mexico according to the rules of origin laid out in Chapter III of the Agreement.
The agricultural products covered by the Agreem ent are those listed in Annex 2-03.4(a) of the
Agreement for Mexico and Annex 2-03.4(b) of the Agreement for Israel.
In addition, article 2-03.5 of the Agreement provides that the Parties shall examine
periodically the possibilities of granting each other further concessions in trade in agricultural goods.
In order to ensure the proper functioning of the Free Trade Area, the Agreement contains,
inter alia , provisions on government procurement, intellectual property rights, competition,
monopolies and state enterprises, and provides th e framework for future relations between Mexico
and Israel.
4. Trade Data
Please refer to the Annex.WT/REG124/3
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II. TRADE PROVISIONS
1. Import Restrictions
1.1 Duties and Charges
According to Article 2-03(7) of the Agreement,  any customs users fees applied on originating
goods on an ad valorem  basis should have been eliminated upon entry into force of the Agreement.
In accordance with Articles 2-03(3) of the Agreement, all customs duties on originating
industrial goods (HS Chapters 25-98) shall be eliminated in four equal stages, the first one taking
place on the entry into force of the Agreement and the other three on January 1 of each successive
year, with the exception of some sensitive products on which customs duties shall be gradually
eliminated in six equal stages by January 1, 2005 at the latest.
Customs duties on industrial products originating in Mexico or in Israel listed in
Annex 2-03.3(a) of the Agreement shall be eliminated on the entry into force of the Agreement.
Customs duties on industrial products originating in Mexico or Israel listed in
Annex 2-03.3(b) of the Agreement shall be gradually eliminated by January 1, 2005.
In the case of agricultural products (HS Chapters 1-24 and goods classified in the HS
headings 3502 and 3505) specific concessions, in the form of duty free, preferential duty or tariff
quotas are listed in Annexes 2-03.4(a) and  2-03.4(b) of the Agreement.
1.2 Quantitative Restrictions
Article 2-04 of the Agreement provides that no Party may adopt or maintain any prohibition
or restriction on the importation or exportation of any good of the other Party. The Parties agreed on anumber of exceptions that are mentioned in Annex 2-02 of the Agreement.
1.3 Common External Tariff
The Agreement does not include any provision for the establishment of a common external
tariff.
2. Export Restrictions
2.1 Duties and Charges
The Agreement does not include any provision for charges and custom duties on exports.
2.2 Quantitative Restrictions
Quantitative restrictions under the Agreement are mentioned in Annex 2-02 of the
Agreement.
3. Rules of Origin
Chapter III of the Agreement establishes the requirements necessary to establish a status of
origin.WT/REG124/3
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Section B to the Annex to Article 3-03 stipulates the detailed rules of origin. The
requirements for the determination of origin are based on:
• The product has been wholly obtained or produced in one of the parties.
• The product has been sufficiently worked or processed. This is to be determined by a
change in the tariff classification, mainly  at the heading level (four digits). An
additional method of determination of origin, based on a percentage of added value to
the product, is also available in part of the cases.
• The requirements are based on a positive standard. In the case of the requirements for
a change of headings, the headings are clearly specified. In the case of the
requirements for ad valorem  percentage criterion, the methods for calculating the
percentage are also indicated in Chapter III of the Agreement.
These rules are all in compliance with Annex II  to the Agreement on Rules of Origin of the
WTO.
Article 3-08 of the agreement provides for bilateral cumulation  between producers from
Mexico and Israel of materials from the other party, as long as the materials comply with therequirements of Article 3-03.
Article 4-02 of the Agreement provides for th e Certificate and Declaration of Origin. The
Certificate of Origin is a document to certify that a good exported between the parties complies with
the requirements necessary to establish a status of origin, as stipulated in the Agreement.
4. Standards
4.1 Technical Barriers to Trade
According to Article 7-02 of the Agreement, the Parties confirm their rights and obligations
relating to standards, technical regulations and conformity assessment procedures under the WTO
Agreement on Technical Barriers to Trade.
4.2 Sanitary and Phytosanitary Measures
According to Article 7-03 of the Agreement, the Parties confirm their rights and obligations
relating to sanitary and phytosanitary measures under the WTO Agreement on the Application of
Sanitary and Phytosanitary Measures.
5. Safeguards
In accordance with the provisions laid down in Chapter V, Israel or Mexico may take
appropriate measures -bilateral or global emergency actions- when the increase in imports from oneParty leads to serious injury or threat thereof in the domestic industry of like or directly competitive
products of the other Party.
6. Anti-Dumping and Countervailing Measures
According to Article 7-01 of the Agreement, the Parties confirm their rights and obligations
arising from the WTO Agreement on Implementation of Article VI of the GATT 1994 and from the
WTO Agreement on Subsidies and Countervailing Measures.WT/REG124/3
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7. Subsidies and State-aid
There are no provisions concerning subsidies and state aid other than Article 7-01 (dealing
with countervailing duties).
9. Other
9.1 Competition Policy
Chapter VIII of the Agreement provides the framework addressing competition policy
including monopolies, restrictive arrangements and cooperation between the Parties on these issues.
According to Article 8-02 of the Agreement th e Parties undertake to enforce the respective
competition laws in order to avoid anti competitive business conduct, which may have adverse effectson bilateral trade.
 9.2 Intellectual Property
According to Article 7-05 of the Agreement th e Parties confirm to maintain rights and
obligations undertaken under WTO Agreement on TRIPS.
 9.3 Government Procurement
Chapter VI of the Agreement provides an extensive framework for the opening of the
respective government procurement markets of th e Parties. Annex I to Chapter VI lists the
Government entities and enterprises of both Parties, which are covered by the Agreement. Annex II to
Chapter VI lists the goods covered by the Agreement. Annex III covers the services covered by the
Agreement. Annex IV relates to construction services. Annex V determines the thresholds for the
application of the Agreement.
III. GENERAL PROVISIONS OF THE AGREEMENT
1. Exceptions and Reservations
According to Article 11-02 of the Agreement, the Parties incorporated into the Agreement
Article XX of the GATT 1994 and its interpretative notes.
In Article 11-03 of the Agreement, the Parties confirm their rights regarding National
Security such as reserving the access to any info rmation or taking any actions that it considers
necessary for the protection of its essential security interests in pursuance of its obligation under the
United Nations Charter of maintenance of international peace and security.
According to Article 11-04 of the Agreement, exceptions are established with respect to
“taxation measures”. Article 11-05 of the Agreem ent stipulates that the WTO’s understanding on
B.O.P governs issues relating to this matter.
2. Accession
According to Article 12-04 of the Agreement, the Parties agreed that any country or group of
countries may accede to this Agreement subject to such terms and conditions as may be agreed
between such country or countries and the Commission and following approval in accordance with
the applicable legal procedures of each country.WT/REG124/3
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3. Dispute Settlement Procedures
Article 10-03 of the Agreement stipulates that the dispute settlement provisions shall apply  to
actual or proposed measures that are or would be inconsistent with the obligations of the Agreement
or cause nullification or impairment.  Chapter X of the Agreement provides for a mechanism of three
stages for the resolution of a dispute: Consultations, a meeting of the Commission and an arbitralpanel, which shall comprise three members and will present to the Parties a final report. The Parties
shall agree on a resolution which shall conform with the report.
The complaining Party may choose between the procedures under the Agreement or the
WTO. The forum selected shall be used to the exclusion of the other.
Where a dispute relates to obligations or rights under the WTO Agreements, no Party may
have recourse to dispute settlement under Chapter X of the Agreement.
4. Relation with Other Trade Agreements
The Preamble of the Agreement states the mutual  interest of the Parties in reinforcing the
multilateral trading system as reflected in the WTO.
The Agreement incorporates by reference certain provisions of GATT 1994, namely
Articles III, XI and XX.
• The Agreement stipulates that  rights and obligations relating to some matters shall be
governed by the relevant WTO Agreement, namely: Agreement on Implementation of
Article VI of the General Agreement of Tariffs and Trade of 1994;
• Agreement on Subsidies and Countervailing Measures;
• Agreement on Technical Barriers to Trade;
• Agreement on the Application of Sanitary and Phytosanitary Measures; and
• Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIP’s).
Article 11-05 of the Agreement incorporat es the WTO understanding on Balance Of
Payments Provisions.
5. Institutional Framework
Section A of Chapter X establishes the Free Trade Commission, which is responsible for the
administration of the Agreement. The Commission shall convene at least once a year and shall:
• Monitor the implementation of the Agreement;
• Look into further elaboration of the Agreement.
All decisions of the Commission shall be taken by consensus.WT/REG124/3
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IV. OTHER
Chapter IX of the Agreement establishes provisions regarding Publication, Notification and
Administration of Laws for purposes of transparency, in order to make sure that the Parties will notify
each other of its laws, regulations, procedures and administrative rulings of general application
respecting any matter covered by this Agreement.WT/REG124/3
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ANNEX
Trade data
The following tables show the development of Mexican and Israeli imports from FTA and
extra FTA partners.
TABLE 1
FTA partners imports 1997 – 2002
(in million USD)
Mexico 1/Israel 2/
Year Imports
from IsraelImports from
the rest of
the WorldTotal
ImportsImports from
MexicoImports from
the rest of
the WorldTotal
Imports
1997 112.1 109,696.1 109,808.2 21.7 28,688.1 28,709.8
1998 137.4 125,235.6 125,373.1 23.0 27,497.8 27,520.8
1999 172.7 141,802.1 141,974.8 33.8 31,022.8 31,056.6
2000 296.5 174,160.5 174,457.0 70.2 34,382.0 34,452.2
2001 257.7 168,138.3 168,396.0 53.8 33,251.6 33,305.3
2002 250.1 168,697.9 168,948.0 62.9 33,179.9 33,242.8
1/ Source: Ministry of Economy
2/ Source: Ministry of Industry and Trade
TABLE 2
Mexican imports from Israel, 1997 - 2002
(in million USD)
Year Total Import from Israel  Import Covered by FTA %
1997 112.1 111.9 99.81
1998 137.4 137.2 99.85
1999 172.7 172.4 99.86
2000 296.5 296.3 99.93
2001 257.7 257.5 99.93
2002 250.1 249.8 99.89
   Source: Ministry of Economy
TABLE 3
Israeli imports from Mexico, 1997 - 2002
(in million USD)
Year Total Import from Mexico Import Covered by FTA % Covered
1997 21.7 19.4 89.3%
1998 23.0 20.0 87.1%
1999 33.8 32.1 94.9%
2000 70.2 68.5 97.5%
2001 53.8 51.6 96.0%
2002 62.9 61.3 97.5%
   Source: Ministry of Industry and Trade, The State of Israel
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