. /.   WORLD TRADE  
ORGANIZATION  WT/REG202/R/B/1/Add.1 
G/L/743/Add.1 31 March 2006 
 
(06-1515) 
Committee on Regional Trade Agreements   
  
 
FREE TRADE AGREEMENT BETWEEN THE UNITED STATES AND ISRAEL 
 
Biennial Report on the Operation of the Agreement 
 
 
Addendum  
 
 
 The following communication, dated 20 March 2006, is being circulated at the request of the 
Delegations of the United States and Israel.   
 This document reproduces questions addressed to the Parties and the responses provided by 
them.  
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 II. TRADE PROVISIONS  1. Could the Parties provide specific figures on  the coverage of the 2004 Agriculture 
Agreement? Which percentage of agricultural trade is not duty-free yet?   
As a result of the 2004 Agriculture Agreement, 0. 7 percent of Israeli agricultural exports enter 
the United States under a TRQ,  5 percent of U.S. agricultural exports enter Israel under a TRQ, and 
5 percent of U.S. agricultural exports will en ter Israel under tariff preference rate.   
 
2. The Biennial Report states that with respect to the United States, it is estimated that 
97.9% of chapter 1 through 97 tariff lines are now duty free for Israeli imports and over 99% of trade from Israel, in terms of value, is duty free. Could the Parties verify/prove these figures? 
Does it mean that agriculture products from Israel under quota or tariffs represent less than 
1% of the bilateral trade?  
Tariff line coverage
: The United States has 10,502 8-digit tariff lines. Of those 
10,502 tariff lines, 10,283 are granted duty-free, quota-free under the US-Israel FTA.  The remaining 219 tariff lines include the over-quota rates for TRQs under the WTO and under Annex D of the 
2004 US-Israel Agriculture Agreement.   
  Trade flow coverage
:  The total value of imports from Is rael into the United States  in 2005 
was $16.9 billion.  The total value of imports from Israel into the United States subject to TRQs in 2005 was $1.37 million.  The only imports from Israel in to the United States subject to TRQs in 2005 
were agricultural products.  Thus, all
 imports from Israel into the United States subject to TRQs in 
2005 comprised 0.008 percent of the total value of imports from Israel into the United States.    
We confirm that agricultural products from Israel under quota or tariff account for less than 
1 percent of bilateral trade.   
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G/L/743/Add.1 Page 2 
 
 
  III. GENERAL PROVISIONS OF THE AGREEMENT 
 
3. According to Part III of the Biennial Repo rt, the Joint Committee held in July 2004 
‘discussed measures to expand bilateral trade under the FTA through enhanced cooperation in 
such areas as customs administration, standards,  and intellectual property rights protection’. 
Could the Parties debrief on the measures adopted?  
In the area of standards, a Joint Committee recommendation was discussed that led to the 
creation of a working group formed by private sector representatives and Israeli government officials who meet as needed to discuss standards issues.  That working group has not proposed any specific 
measures.  In the area of IPR, the two sides ma intained a sustained, intensive and senior level 
dialogue as follow up to the JC meeting, but meas ures have not been proposed.  U.S. and Israeli 
customs authorities have a close working relations hip and cooperate on an “as needed” basis;  no 
measures have been proposed.   
 Dispute Settlement 
 
 4. As regards, Art. 19 of the FTA, which describes the functioning of the Bilateral Dispute 
Settlement Mechanism, the EC would like the US to ask the following questions: 
 Art. 19.1.f establishes that  “If the conciliation panel under this Agreement or any other 
applicable international dispute settlement mech anism has been invoked by either Party with 
respect to any matter, the mechanism invoked sh all have exclusive jurisdiction over that matter”    
 (a) Does this mean that the use of a certain mechanism entails giving up the 
possibility of using another mechanism when the first one is over? 
 It means that a complaining party cannot e ngage in dispute settlement twice over the same 
claim.  
 
(b) Which, if any, are the parameters that should be used to choose one mechanism 
or another? 
 There are no parameters governing which mech anism should be used; the Party invoking the 
mechanism decides.  
 
 Art. 19.1.e  says “The report of the panel shall be non-binding”,   
 
(c) So, if the multilateral mechanism cannot be  used after the ending of the bilateral 
mechanism, and the bilateral mechanism is non-binding, how will the resolution 
of disputes be guaranteed? 
While the report of the panel is “non-binding,” such that a conciliation panel’s  proposal on 
the settlement of the dispute does not bind a Party,  Article 19.1(e) provides that the report will be 
presented to the Parties and Article 19.2 permits the a ffected Party to take appropriate measures.  In 
light of the wide range of bilateral ties betwee n the United States and Israel, and the spirit of 
collaboration that characterizes our relations, we consider that bilateral consultations and other 
procedures provided for under the agreement will help to secure a mutually satisfactory resolution.   
 
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