U.S.-Israel Trade Agreement Extended as Negotiations Continue
President Joe Biden has announced the extension of the U.S.-Israel reciprocal trade agreement for an additional year.
Morgan Riley
- 2023-12-29
- Updated 07:32 PM ET
(NewsNibs) - In a move to sustain economic ties, the United States has extended its reciprocal trade agreement with Israel for another year. The trade agreement, which was due to expire, includes duty-free trade benefits for specified quantities of certain agricultural products between the two nations. The extension is designed to grant both governments ample time to negotiate a replacement for the trade framework established back in 2004, underlining the ongoing commitment to deepening bilateral trade relationships.
Continuing a Long-standing Economic Partnership
The current trade provisions come under the umbrella of a broader free trade agreement reached between the United States and Israel in 1985. This foundational agreement was aimed at fostering greater trade and investment opportunities by eliminating various trade barriers and improving transparency in regulatory practices. Maintaining this economic linkage is seen as vital for both economies. To facilitate ongoing economic partnership and address changing economic conditions, officials from the U.S. and Israel convene an annual joint economic development group, where they explore potential economic reforms and cooperative strategies for the forthcoming year.
Negotiating a Permanent Trade Solution
Israel has formally requested the resumption of negotiations toward establishing a permanent trade agreement, particularly concerning the trade of agricultural products. The current temporary agreement, known as the Agricultural Trade Agreement Program (ATAP), is the second of its kind, with an earlier version enacted in 1996 that offered limited preferential tariff treatment. In 2004, the ATAP allowed for slightly increased access to U.S. agricultural markets. Although initially set to expire in December 2008, the program has seen annual extensions since then, highlighting the complexity of negotiating a comprehensive replacement agreement. In recent trade statistics, U.S. imports of agricultural products from Israel stood at $372 million in 2017, reflecting a modest but significant trade relationship. With Israel ranked as the 24th largest trading partner for the U.S., the nations collectively accounted for $34.5 billion in total two-way goods trade in recent evaluations.
Working Towards Future Stability
The extension of the trade agreement underscores a mutual recognition of the importance of stable and continued economic ties between the United States and Israel. As negotiations for a more permanent trade framework advance, the extension ensures that both nations can maintain the flow of agricultural products and preserve the benefits of their 1985 free trade agreements. This interim measure reflects a shared commitment to sustaining the economic relationship while outlining a future trajectory for more enduring trade arrangements.
