Israel ratifies free trade agreement with South Korea

Hyundai Pallisade Credit: PR

Israel is also negotiating free trade agreements with China and Vietnam.

Israel is accelerating efforts to sign free trade agreements with East Asian economic powers and Israel's vehicle market is likely to benefit from this over the coming months.

Sources close to the matter have informed "Globes" that the free trade agreement between Israel and South Korea, which was formally signed last year, has been formally ratified by Israel over the past few weeks - a major step which brings implementation of the free trade agreement closer. The agreement now needs to be formally ratified by the Korean parliament, which according to the Korean media, should happen in the coming few weeks with the full support of all parties across the political spectrum.

The Israel Foreign Trade Administration at the Ministry of Economy and Industry expects the 7% excise tax on all Korea cars imported into Israel to be canceled when the agreement comes into effect. But sources in Israel's car industry are trying to temper expectations and insist that cancellation of the excise tax will only help moderate the sharp price rises being dictated by manufacturers due to increased production costs, and won't be reflected in an actual fall in current prices.

At the same time, Israel is also expected to sign a free trade agreement with Vietnam later this year. Earlier this week an Israeli importer signed an agreement to import Vietnam's Vinfast electric vehicles from the fourth quarter and the free trade agreement will also reduce the prices of these cars, which includes 7% excise tax. The Foreign Trade Administration said, "Talks to prepare a free trade agreement with Vietnam are in advanced stages. The sides hope to complete the negotiations during 2022. The Foreign Trade Administration stresses that the agreement will require ratification by both countries before coming into effect."

The third free trade agreement being negotiated with an East Asia country is the biggest of all - China, which is also a major player in the car market. Last month Chinese TV station CGTN reported that Israel and China had agreed to speed up negotiations on the free trade agreement in a phone conversation between Israel's Foreign Minister Yair Lapid and his Chinese counterpart Wang Yi.

Published by Globes, Israel business news - en.globes.co.il - on April 27, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Hyundai Pallisade Credit: PR
Hyundai Pallisade Credit: PR
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