Cabinet Decision on Free Trade Treaty with the European Union

Israel had been conducting prolonged negotiations with the European Union for a revision of its trade agreement with what was once called the EEC. It had been asking repeatedly for a special status in its relations with the EU. This was approved in December 1994. Now Israel wanted to add additional items for negotiations before signing the new trade agreement. The reason for making public the Cabinet's decision of 21 May had to do with the forthcoming meeting of the EU foreign ministers forum due to take place in mid June 1995. Since trade with Europe accounted for almost 40% of Israel's foreign trade, it ascribed vast importance to this agreement. Text:

In accordance with the Government's decision Number 5453 from 21.5.95:

The Government decided:

A. To initial the draft treaty between Israel and the European Union on the basis of the EU representatives' proposal and add the following:

1. The Government welcomes the declaration made by the EU's leaders at their December 1994 meeting in Essen, Germany, during which they called for Israel to be given special status in its relations with the EU.

2. These negotiations will not detract from the conditions of existing agreements between Israel and the EU.

3. The Research and Development Agreement, including full participation, without the right to vote in the committees administering the various projects, is an essential condition of the full agreement.

4. Israel will conduct negotiations on the matter of government procurement on the understanding that the EU take into account the limits, and relative advantages of Israel in this sphere, and particularly in the telecommunications sector, and according to Israel's negotiating position on this during GATT.

5. Israel proposes that with the aim of preventing damage as a result of raising duties within the framework of the Uruguay Round, and following the accession of the three EFTA countries to the EU, that agreements in the area of agriculture and processed foods operate between them, immediately following the signing of the agreement, without waiting for ratification.

6. Israel is prepared to delay implementation of the agreement concerning the price of entry for oranges until 1.11.95.

7. Israel insists upon receiving a letter from the EU affirming that the subject of O.P.T. will remain on the negotiating table between the two sides. The Government aspires to find a solution to the problem by the end of the new agreement's ratification process.

8. The Government authorizes its representatives to the negotiations to continue discussing the EU's requests regarding the import to Israel of agricultural goods and processed foods.

9. The Government calls on the EU to take immediate steps to reduce the huge trade deficit between the two sides.

B. Authorizes the Foreign Minister to notify the EU and its Presidency of these decisions. The Government calls on the EU's Foreign Ministers Forum, in its 12-13.6.95 meeting, to approve the draft agreement in accordance with the EU's proposal, and along the lines described above.