A free trade agreement between Ukraine and Israel will come into effect on January 1, 2021, President Volodymyr Zelensky announced on Twitter on Nov. 24, after the Knesset, the Israeli parliament, ratified the deal.
The agreement will strengthen economic ties between the two countries, as it abolishes most import duties for them.
The president also believes the deal can help ramp up bilateral trade to $2 billion a year, compared to $1 billion in 2019 and $502 million in the first half of 2020.
“This is a new level of relations between the countries and a green light for increasing Ukrainian exports, closer cooperation in the fields of high-tech, engineering and the development of investment cooperation,” Zelensky said.
According to the agreement, Israel will cancel about 80% of import duties for Ukrainian industrial goods and over 9% for agricultural products. In turn, Ukraine will drop about 70% of import duties for Israeli industrial products and over 6% for agricultural products.
Ukraine mostly exports agricultural products to Israel, including cereals, oil seeds and plants like rapeseed and sunflower, while importing chemical products, mineral fuel, oil and products created by refining oil, nuclear reactors and boilers, machinery, fruits and nuts.
Now, Ukraine will be able to export its wheat and wheat products absolutely for free, and Israeli avocados would be imported into Ukraine for free as well.
“This free trade agreement will help lower the cost of living in both countries and raise the quality of life of our citizens by having access to better products and technologies,” Joel Lion, Israel’s ambassador to Ukraine, said in a text message to the Kyiv Post.
“It is a historical achievement opening opportunities for our people to move the trade between our countries to a higher level,” Lion added.
According to Alexandra Ben Ari, head of the public diplomacy department at the Israeli Embassy in Ukraine, services aren’t included in this free trade agreement, only goods, even though Zelensky said in August 2019 that the countries planned to include services.
The negotiations over the deal lasted for more than seven years, until Ukraine and Israel signed the free trade agreement in January 2019 and the Ukrainian parliament ratified it in July. But it took Israel 16 months to ratify the agreement, as the country had parliamentary elections.
“We had three (parliamentary) elections in the last year and half, and we needed our government to sit down and ratify this agreement. That’s the only reason why it took us some time,” Ben Ari said.
