Israel and South Korea concluded negotiations for a free trade agreement, the Israeli Economy and Industry Ministry announced on Wednesday.
The deal will reduce or eliminate tariffs on Israeli exports to South Korea on goods such as wines, cosmetics, metals, and industrial machinery. Customs duties will also be lowered on South Korean goods imported into Israel such as vehicles and vehicle parts, medical equipment, electronic components, refrigerators, toys and games, plastics, and chemicals.
“It is anticipated that the agreement will provide a competitive advantage and ease activity for Israeli exporters in the South Korean market, thus strengthening Israeli exports and increasing economic growth,” the ministry said. The agreement has been in the works for three years in cooperation with the Israeli ministries of Foreign Affairs, Finance, Agriculture, Communications and Justice, as well as the Population and Migration Authority, the Tax Authority and the Competition Authority.
South Korea currently has 15 free trade agreements with various countries and trading blocs, including the US, the EU, India and China. The free trade agreement between Israel and South Korea will assist in equalizing Israel’s trade terms with those of the foregoing countries, the ministry said, adding that the was of “great importance to relations between the countries and will advance bilateral relations as well as encourage trade in new areas.”
“The free trade agreement with South Korea is an historic agreement, the first to be signed with an East Asian country that is one of the leading economies in the world,” said Economy and Industry Minister Eli Cohen. “South Korea is an important trade partner for the State of Israel. The international trade agreements are, as a rule, of strategic importance for the Israeli economy and assist in increasing exports, lowering the cost of raw materials, which increases the competitiveness of Israeli exporters and constitute welcome news for Israeli consumers in light of the entry of a broad range of products without customs duties.”
Prime Minister Benjamin Netanyahu said in a statement: “Israel is a vibrant, advanced economy and I think our partnership will do tremendous good for both our economies.”
Netanyahu, Cohen and Republic of Korea Trade Minister Yoo Myung-hee met in Jerusalem on Wednesday after negotiations for the deal were completed.
“Technological exchanges will give us great advantage for the future. The people of Israel are delighted with this increased cooperation between our two countries. Welcome,” Netanyahu told the South Korean minister.
“Both countries, South Korea and Israel, we have a lot of similarities and also we have complementary economic structure. Based on this FTA I’m sure that it will further promote our trade and investment as well as further promote our technology cooperation,” said Minister Yoo Myung-hee, according to a press statement.
In 2018, trade between Israel and South Korea amounted to approximately $2.5 billion, an increase of almost 15 percent over 2017, Israel’s Economy and Industry Ministry said.