After months of negotiations, the EU Council of Ministers approved the
draft of a trade agreement with Israel. There remained some additional
measures of approval before the formal signature scheduled for October
1995. Foreign Minister Peres hailed the agreement as a major turning point
in Israel-European relations and noted the adverse balance of trade
between Israel and the EU which stood at $8 billion annually. The
communique listed the agreement's major components. Text:
Last night, July 17, 1995, the European Union's Council of Ministers
approved the draft of a trade agreement between Israel and the European
Union. The new agreement is scheduled to be signed in October 1995, after
both parties complete the drafting of the final details. Following its
approval by the European Parliament, the agreement will be brought for
approval before the parliaments of the EU member states.
Foreign Minister Shimon Peres said that the importance of the decision
transcends the economic sphere. It is an important milestone in relations
between Israel and Europe, further proof of Europe's recognition of its
special and preferential relations with Israel. The decision paves the way
for a comprehensive agreement on matters of trade, research and
development and financial services between Israel and Europe. The Israeli
economy has taken a great step forward towards integration and closer ties
with one of the three main blocs in the new international economic order
that has emerged in recent years.
The agreement - primarily the sections dealing with government procurement
and with research and development - will facilitate increased cooperation
between the private sectors of both Israel and the European Union and will
decrease Israel's negative balance of trade with the EU (which is
approaching an annual total of $8 billion).
The negotiations were conducted by Foreign Ministry Deputy
Director-General for Economic Affairs Oded Eran and Mordechai Drori,
Israel's ambassador to the EU Institutions in Brussels - in cooperation
with the Ministries of Industry and Trade, Agriculture and Science.
The agreement's major components are as follows:
* Expansion of the free trade area: This will enable the export of larger
quantities of agricultural produce in fields which the agricultural sector
has developed over the past few years in an effort to overcome the problem
of water shortage, primarily flowers, peelable fruits and grapes. Israel
agreed to reduce its export quota of oranges to EU countries from 300,000
to 200,000 tons.
* General updating of the original document: The tremendous change in
Israeli industry, which has moved largely to advanced technology products,
required the updating of the original agreement with regard to rules of
origin and adjustment to new trade patterns. This will improve the ability
of Israeli industry to compete in European markets.
* Government procurement: Negotiations will be conducted on the opening of
the government procurement market - under preferred terms - primarily in
the field of telecommunications.
* Research and development: In recognition of Israel's special status and
its advanced capability in the area of R&D, the EU agreed to include
Israel in committees administering European Union research and development
projects. Israel will not have voting rights.