Israel South Korea Free Trade Agreement

„We have had free trade agreements with other parts of the world with the United States, with Europe and elsewhere, but this is the first free trade agreement we have with an Asian economy and what an economy, a global leader, a dynamic and progressive economy,” Netanyahu said. A source in the imported vehicle industry told Globes that the South Korean agreement would also lead to a free trade agreement with Japan. Car importers will be among the main beneficiaries of the agreement in Israel. It provides for the removal of 7% tariffs on vehicles imported from South Korea and on korean manufacturers` vehicles in Europe, which account for a high proportion of components from South Korea. The free trade agreement between Israel and South Korea is in the final stages of preparation and could be signed in a matter of weeks. Discussions between the two countries on the agreement have been ongoing for several years and the signing appears to have been postponed for political reasons. On August 21, 2019, South Korea and Israel announced that they had concluded negotiations for a free trade agreement. Negotiations began in June 2016 and Israel`s agreement is the first with an Asian partner. Once the agreement is signed, it will be ratified in both South Korea and Israel before entering into force. The free trade agreement between Israel and South Korea is in the final stages of preparation and could be signed in a matter of weeks. Discussions between the two countries on the agreement have been ongoing for several years and the signing appears to have been postponed for political reasons. Recently, however, the agreement has been given the green light by the Korean side, notably through the normalization of relations between Israel and the United Arab Emirates, which has made the agreement acceptable from the point of view of South Korea`s trade relations with the Arab world. Car importers will be among the main beneficiaries of the agreement in Israel.

It provides for the removal of 7% tariffs on vehicles imported from South Korea and on korean manufacturers` vehicles in Europe, which account for a high proportion of components from South Korea. In recent years, nearly one in three cars sold in Israel came from a South Korean manufacturer. In the first half of 2020, Hyundai Motors and its subsidiary Kia captured 27% of the new car market in Israel. In addition, the Chevrolet Spark and one of the Renault models are also manufactured in South Korea. Imports of vehicles and spare parts account for almost half of South Korea`s imports.

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