. /. RESTRICTED  WORLD TRADE  
ORGANIZATION  GPA/W/294 
18 July 2005 
 (05-3202) 
Committee on Government Procurement Original:   English 
  
 
ISRAEL'S LEVEL OF OFFSET RIGHTS 
 
Communication from Israel
 
  
 
 The following communication, dated 14 July 2005, is being circulated at the request of the Delegation of Israel.  
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  1. Israel hereby declares its intention to renew its  request to modify provisions regarding offsets, 
contained in a note in Israel's Appendix I.  
2. As Parties to the GPA may recall, in November  2004, Israel submitted a formal request to the 
WTO Committee on Government Procurement, requesting the modification of the timetable for a gradual reduction in the levels of its offset rights.  Due to the urgent nature of the matter and the need 
for more time to study Israel's request more thoroug hly, the decision was taken to extend Israel's right 
to require offsets at a level of 30 per cent for an  additional one year, i.e., until 31 December 2005 
(document GPA/83, dated 17 December 2004).  It wa s then understood that Israel, as well as the rest 
of the membership, would use this period of one year to further explore and negotiate the issue.  This 
understanding is reflected in the minutes of th e Committee in document GPA/M/25 (paragraph 5), 
dated 18 January 2005.  3. In line with the above understanding, the G overnment of Israel has conducted a thorough 
study of the implications and consequences on Israel 's economy and industry of Israel's participation 
in the GPA.  In order to guarantee the objectivit y of the outcome, the Government has charged this 
assignment to an external private leading market re search and consulting firm - Business Data Israel 
Ltd.  Specifically, the study focused on the following:  
 (i) the impact of Israel's membership in the GPA on Israeli firms' access to and success 
in winning public contracts in GPA Parties' markets; 
  (ii) the effect of  Israel's membership  in the GPA on foreign and domestic suppliers 
bidding for public tenders in Israel;  and 
 
 (iii) the impact of the offset provisions on Israel's domestic industry and their contribution 
to economic development. 
 4. The main findings of the study are as follows:  
 (i) Israel's membership in the GPA has lead Israeli companies neither to participate more 
in public tenders nor to win public cont racts in other GPA Parties' markets. GPA/W/294 
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  (ii) Israel's public procurement market has been further opened to competition from 
abroad.  In 2004, direct purchases by Israeli entities from foreign suppliers covered by the GPA accounted for 56 per cent of total procurement, while the remaining 
44 per cent were purchased in Israel from either local manufacturers or importers. 
 
 (iii) The offset provisions in place have not  hindered nor discourag ed foreign suppliers 
from competing and winning public tenders in Israel. 
  (iv) Business opportunities for the Israeli industry, resulting from the offset provisions, 
constitute the main benefit of Israel's me mbership in the GPA.  These benefits are 
observed in aspects of direct business cont racts, the transfer of technology and 
know-how and the creation of long-term bus iness relations.  For the aforementioned 
reasons, offsets are an important vehicle for durable economic development. 
 5. In light of the above-mentione d considerations, Israel intends to renew its request to introduce 
amendments to its note concerning offset rights in Appendix I. 
 6. Israel stands ready to engage in construc tive negotiations concerning its request with other 
GPA Parties.  
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