Free Trade Agreement

Mercosur – Israel

Roy Nir
Consul for Economic Affairs
São Paulo - Brazil
15.03.2010
 Israel - Economic Indicators

• Area: 22,145 sq km
• Population (2009): 7.5 Million
• GDP (2009): US$ 208 Billion
• GDP Growth (2009): 0.7%
• GDP per capita (2009): US$ ~28,000
• Foreign Direct Investment (2008): US$ 9.6 Billion
• Total Imports (2009): US$ 49 Billion
• Total Exports (2009): US$ 41.5 Billion
• Inflation (2009): 3,9%
• Unemployment (current): 7,4%
Total Israeli Exports
2009 – by Sector
Total Israeli Imports
2009 – by Sector
Total Brazilian Exports
2009 – by Sector
Total Brazilian Imports
2009 – by Sector
Brasil – Israel Trade
 Mercosur - Israel Trade

 Bilateral trade between Israel and Mercosur has increased 42% in

2008, and reached a peak of almost 1.9 B$

 In 2009 there was a decrease of -35.5% (-38.4% with Brazil)

 Derived from the global crisis and the sharp decrease of fertilizers
prices

 Israel exported US$ 782 million to Mercosur

 Israel imported US$ 427 million from Mercosur
 Trade Balance decreased -54%

The Israeli trade with Mercosur represents 51% of the total bilateral trade
beteen the country and Latin America.
 Mercosur – Israel Trade

Brazil is the main market to which Israel exports in Mercosur.

In 2008, 596 Israeli companies export to Brazil, reflecting a 37%

increase in 4 years.
Israeli Exports to Brazil
2009 – by Sector
Brazilian Exports to Israel
2009 – by Sector
 Israel Trade Agreements
- Free Trade Agreement Israel – European Union – ’75 / ‘96
- Free Trade Agreement Israel – U.S.A – ‘85
- Free Trade Agreement Israel – EFTA – ‘93
(Switzerland, Norway, Iceland, Liechtenstein)
- Free Trade Agreement Israel – Canada – ’97
- Free Trade Agreement Israel – Turkey – ‘97
- Free Trade Agreement Israel – Mexico – 2000
- Free Trade Agreement Israel – Mercosur – 2007
(In force with Uruguay, ratification process in Brazil, Argentina
and Paraguay)
- Preferential Trade Agreement – Israel – Jordan – ‘95
- QIZ agreements – Egypt / Jordan

- Future Prospects: India, S. Korea, Chile

 Mercosur – Israel FTA - Content

• Initial Provisions
• General Provisions
• Trade in Goods
• Rules of Origin and Customs Procedure
• Safeguards
• Technical Regulations
• Sanitary and Phytosanitary Measures
• Technical and Technological Cooperation
• Institutional Provisions
• Publications and Notifications
• Dispute Settlement
• Exceptions
• Final Provisions
 Mercosur – Israel FTA - Implementation

 In 10 years, more than 97% of tariff lines (products) will have

zero tariff (II, ‫ )מכס‬on both sides

 For products exported from Mercosur to Israel, 90% of tariff lines

will have zero tariff (II, ‫ )מכס‬as soon as the agreement enters
into force (Group A –Immediate), and the rest will enjoy gradual
discounts until tariff elimination, in 4, 8 or 10 years (Groups B, C,
D)

 For products exported from Israel to Mercosur, 50% of tariff lines

will have zero tariff as soon as the agreement enters into force
(Group A –Immediate), and the rest will enjoy gradual discounts
until tariff elimination, in 4, 8 or 10 years (Groups B, C, D)
 Benefits and Advantages of the
Agreement

Potential Exports to Israel

Section Products Brazilian Brazilian Israel total imports

Description Exports to Exports to to the world
the world Israel
Section V Mineral Products 26056.7 0.507 8156.0

Section VI Chemical Products 8000.0 59.8 4509.1

Section VII Plastic and Rubber 4953.7 7.3 2467.6

Section XI Textile 2364.2 1.6 1782.9

Section XV Base Metals 16851.8 20.3 3653.6

2007 in million dollars.

Source Ministry of Development, Industry and Foreign Trade, Israel Central Bureau of Statistics
 Benefits and Advantages of the
Agreement
Main Israeli Export to the World and the tariff in Mercosur
SH Descrição Exportações Tarifas
Israelenses (2005) Brasileiras

710239 Diamonds – with added value 9.078.759.081 10

710231 Gross Diamonds 2.845.087.733 8
300490 Medicines 1.143.484.923 0 - 14
851790 Parts of electric equipments, to telephony and telegraphy 584.168.927 0 - 12
300210 Anti-serum and blood fractions 572.372.120 0-8
851750 Telecommunication Equipments 496.556.300 0 - 16
820900 Cermet Plaque 478.180.932 16
852520 Transmission Equipments with receivers attached 403.570.001 0 - 16
392690 Plastics works 382.958.220 0 - 18
854221 Integrated circuits and digital micro conjoined 365.947.359 0-8
847330 Parts and pieces to machines 357.396.899 0 - 14
380830 Herbicides 354.611.706 8 - 14
711319 Precious Metals 352.627.721 18
901890 Equipments to odontology / dentistry 314.876.108 0 - 16
 Benefits and Advantages of the
Agreement
• Trade volume increase, as the potential is far from being exploited
• Trade diversification

• Brazil as the South American hub for Israeli exports (First Israeli FTA in
the continent)

• Israel as a bridge to free-trade with EU, US, through joint Brazilian-

Israeli ventures (First Mercosur FTA outside Latin-America)

• Enhancement of bilateral investments

• Enhanced technological and R&D cooperation

• Enhancment of economic, cultural, political and social ties

 “Shavit Program”

 Brazil has been selected by Israel’s Ministry of Industry,

Trade and Labor (MOITAL) and the Israeli Institute for Export
and International Cooperation (IEICI)
as a target market for specially Market
Research
budgeted focused activities, Internet Business
with the goal of promoting & marketing consulting

facilitating:
Business
Development Israeli Exhibitions
Platform &
• Direct investment in Brazil Exporter Trade Shows

• Strategic Alliances
Training
• Joint Ventures (JV) Visits to Israel
by Brazilian
“How to do
business?
decision makers
• Business Opportunities Focused Road
in Brazil”
shows in Brazil
 “Shavit Program”

• Telecom
• Home Land Security
• Medical Devices & Bio-Pharma
• Clean-Tech and Water Technology

 Key
Key Objective:
Objective:
Widen
Widen and
and deepen
deepen business
business cooperation
cooperation between
between Israel
Israel
and
and Brazil
Brazil while
while creating
creating valuable
valuable business
business opportunities
opportunities
and
and enhancing
enhancing the
the presence
presence of
of Israeli
Israeli High-tech
High-tech industries
industries
in
in Brazil
Brazil
 “Shavit Program”

Valuable market Information

• Market analysis, competition, main
opportunities
• Legislation, taxation etc
• Joint Ventures, partners etc

Hosting and Leading Business Delegations from/to Brazil

• Leading focused Israeli business delegations
to Brazil
• Company-tailored 1-on-1 meetings in Brazil
• Participating in key events & trade exhibitions in Brazil
• Upcoming events: World Cup 2014 & 2016 Rio
Olympics
Thank you
Obrigado
‫תודה רבה‬