Canada-Israel Free Trade Agreement

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What is the CIFTA?


In 2014, Canada and Israel agreed to modernize the Canada-Israel Free Trade Agreement (CIFTA), a goods-only agreement in force since January 1, 1997. Through two phases of negotiations in 2014-2015 and 2017-2018, Canada and Israel updated four chapters and added nine new chapters to the CIFTA.

The modernized CIFTA improves access to the Israeli market for Canadian companies through further elimination and reduction of tariffs on agricultural, agri-food and fisheries products. With the addition of new inclusive trade provisions on gender, small and medium-sized enterprises and corporate social responsibility, as well as new labour and environmental protections, the modernized CIFTA signals the importance of inclusive trade and ensuring that the benefits and opportunities that flow from trade and investment are widely shared.

Since CIFTA first came into effect over two decades ago, Canada’s two-way merchandise trade with Israel has more than tripled, totalling $1.9 billion in 2018.

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Key facts

  • The original Canada-Israel Free Trade Agreement came into effect over 20 years ago, on January 1, 1997.
  • Two-way merchandise trade between Canada and Israel was valued at more than $1.9 billion in 2018.
  • Science and technology are significant drivers of the Israeli economy.

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Frequently asked questions


Answers to common questions about the Canada-Israel Free Trade Agreement.

Modernized CIFTA: Benefits for Canada


Advantages of the modernized Canada-Israel Free Trade Agreement for Canada.

Backgrounder


Key achievements for Canada during CIFTA modernization negotiations.

Timeline


A history of the discussions and consultations that took place.

Canada-Israel Free Trade Agreement: Frequently asked questions


Why is the Canada-Israel Free Trade Agreement (CIFTA) important to Canada?
  • Canada is a trading nation. Canadians’ standard of living depends on robust international trade as a key driver of economic growth for a prosperous middle class.
  • Israel, with a GDP of $479.2 billion, is an important economic player in the Middle East and offers a range of opportunities for Canadians and Canadian businesses, including in trade, investment, science, technology and innovation.
  • Since CIFTA came into force in 1997, Canada-Israel merchandise trade has more than tripled, reaching a value of over $1.9 billion in 2018.
Why modernize CIFTA?
  • The original CIFTA was a goods-only agreement that eliminated tariffs on all industrial products and some agricultural, fish and seafood products.
  • Canada and Israel agreed to modernize CIFTA by updating existing chapters and adding new elements. This makes CIFTA a 21st-century agreement by reducing technical barriers to trade, enhancing cooperation, increasing transparency in regulatory matters, reducing red tape for business and adding inclusive trade elements that seek to ensure the benefit and opportunities that flow from trade are more widely shared.
  • Through the modernized CIFTA, Canada and Israel are creating the right conditions for trade in their modern and knowledge-based economies.
  • Since CIFTA came into force over two decades ago, two-way merchandise trade between Canada and Israel has more than tripled, totaling $1.9 billion in 2018. There is room to grow and deepen the commercial relationship.
  • A modernized Canada-Israel FTA enables our companies to take greater advantage of expanded market access; creates more favourable conditions for exporters through important non-tariff commitments; and establishes mechanisms under which Canada and Israel can cooperate to address and seek to resolve unjustified non-tariff barriers that may arise.
  • Finally, the modernized agreement helps to further strengthen Canada’s support for Israel, as it works toward securing its future as a stable, democratic and prosperous country.
What are the benefits of the modernized CIFTA?
  • The modernized CIFTA includes additional provisions to help Canadian businesses succeed in the Israeli market. The benefits of the modernized CIFTA include:
    • provisions that address non-tariff barriers and establish mechanisms to allow Canada and Israel to discuss, prevent and resolve unjustified non-tariff barriers that may arise;
    • enhanced border efficiencies, increased regulatory transparency and reduced red tape;
    • new and improved market access for virtually 100% (up from 90%) of Canadian exports of agricultural, agri-food, fish and seafood products to Israel;
    • a more level playing field for Canadian exporters competing with those from other countries, such as the United States and the European Union, and;
    • support for Canada’s inclusive trade approach in areas such as gender equality, small and medium-sized enterprises (SMEs) and corporate social responsibility (CSR).
What is the relationship between the existing CIFTA (1997) and the modernized Agreement?
  • The modernization and expansion of CIFTA was done through an Amending Agreement, which replaces the entire 1997 CIFTA text with the expanded and modernized CIFTA text.
What are the market access outcomes in the modernized CIFTA?
  • Canada negotiated the reduction or elimination of a number of Israeli tariffs on agricultural, fish and seafood products that are of export interest to Canadian stakeholders.

Agriculture – a key export interest for Canada. Upon entry into force, 92% of current Canadian exports will enter Israel duty free in unlimited quantities, up from 83%.

  • Immediate duty-free treatment for:
    • Dog and cat food (previous tariff of 4%);
    • Soy beverages (previous tariff of 6%);
    • Baked goods including bread, pastries and biscuits (previous tariff of up to 8%); and
    • Sweetened and dried cranberries (previous tariff of 12%).
  • Volume-limited duty-free access under new or expanded Tariff Rate Quotas (TRQs):
    • Apples – new TRQ of 900 metric tonnes (MT) (previous tariff of $0.63/kg);
    • Chickpeas – expansion of TRQ from 100MT to 400MT (previous tariff of $0.36/kg);
    • Wines, including ice wines – new TRQ of 60,000 litres (previous tariff of 12% plus $0.46/litre); and
    • Frozen processed potatoes, including frozen French fries – expansion of TRQ from 50MT to 100MT (previous tariff of 50%).
  • Israel will also provide preferential tariff rates for other goods, such as:
    • Canola oil (reduction of 40% from previous 8% tariff);
    • Shelled beans (reduction of 50% from previous 12% tariff); and
    • Turkey hatching eggs (reduction of 50% from previous $1.14/unit tariff).

Fish and Seafood – Under the modernized CIFTA, 98% of current exports will enter Israel duty free in unlimited quantities, up from 90%.

  • Shrimp (previous MFN tariff of 26% tariff; duty-free TRQ of 150MT and an over-quota rate reduction of 25%).
How does the modernized CIFTA align with Canada’s inclusive trade agenda?
  • The modernized CIFTA is more than just an ambitious trade agreement: it is the product of bilateral cooperation that prioritizes inclusive trade.
  • An inclusive approach to trade is integral to Canada’s trade policy and is being advanced in all of Canada’s new free trade agreements. Everyone benefits when more Canadians are able to participate in the global economy.
  • CIFTA’s modernization provided an opportunity for Canada to add inclusive trade provisions, such as:
    • trade and the environment, to ensure that both countries pursue high levels of environmental protection while realizing the benefits of liberalized trade
    • trade and labour, to commit the two parties to effectively enforcing their labour laws, which must, in turn, embody and provide protection for internationally recognized labour rights and principles, with recourse to an enforceable binding dispute-settlement mechanism
    • trade and gender, to acknowledge the importance of incorporating a gender perspective into economic and trade issues and to ensure that economic growth benefits everyone. The trade and gender chapter establishes a dedicated committee to facilitate activities to help women more fully benefit from the opportunities created by the agreement
    • small and medium-sized enterprises (SMEs), to include general provisions on the importance of SMEs to Canada’s and Israel’s economies, to facilitate cooperation activities and information-sharing, and to establish an SME committee to perform accountability, transparency, and advisory functions
    • new corporate social responsibility (CSR) provisions,  including a commitment to encourage the use of voluntary CSR standards with specific reference to the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises

Modernized Canada-Israel Free Trade Agreement: Benefits for Canada


As one of Canada’s long-standing trading partners, Israel represents an important market for Canadian goods and services. Through the modernized Canada-Israel Free Trade Agreement (CIFTA), Canada and Israel are creating the right conditions for increased trade and new opportunities to further expand the Canada-Israel economic partnership.

Summary

Modernization overview and chapters

Through two phases of negotiations between 2014 and 2018, Canada and Israel updated four existing chapters in the Agreement and added nine new chapters. The modernized CIFTA also adds a provision on corporate social responsibility. The modernized CIFTA is more than just an ambitious trade agreement; it is the product of bilateral cooperation to expand the Agreement to include an inclusive approach to trade, which seeks to ensure that Canadians more broadly share the benefits and opportunities that flow from trade and investment.

Updated chapters:

New chapters:

Canada-Israel Free Trade Agreement: Backgrounder


What is the Canada-Israel Free Trade Agreement?

The Canada-Israel Free Trade Agreement (CIFTA) entered into force on January 1, 1997, eliminating tariffs on all industrial products manufactured in Canada and Israel, as well as on a limited number of agricultural and fisheries products.

Between 1999 and 2003, additional agricultural and agri-food tariff reductions on goods previously excluded from the agreement were negotiated. The additions included better market access for a number of Canada's top agricultural and agri-food exports to Israel.

On October 10, 2010, Canada and Israel announced they would begin discussions to revise the existing CIFTA. Officials started exploratory talks to move beyond the original, first-generation trade agreement by expanding its scope and liberalize tariffs on a number of additional agriculture and fish and seafood products.

On January 21, 2014, the Canadian and Israeli prime ministers announced the launch of negotiations to expand and modernize CIFTA. Canadian industry and other stakeholders were consulted before and during the modernization negotiations.

In 2017, Canada and Israel agreed to a further expansion of CIFTA to include new, inclusive trade elements dealing with trade and gender, small and medium-sized enterprises (SMEs) and corporate social responsibility (CSR).

On May 28, 2018, Francois-Philippe Champagne, Canada’s Minister of International Trade, and Eli Cohen, Israel’s Minister of the Economy and Trade, met in Montréal, Quebec, to sign the Protocol Amending the Canada-Israel Free Trade Agreement, which includes the 2015 and 2018 chapters.

On September 1, 2019, the modernized CIFTA entered into force for Canada and Israel.

Since CIFTA first came into force more than two decades ago, bilateral merchandise trade between Canada and Israel has more than tripled, totalling $1.9 billion in 2018.

Canada’s achievements

As part of the modernized CIFTA, updates were made to four existing chapters:

Nine new chapters and a provision were added that deal with new and ongoing trade elements and issues:

The addition of inclusive trade elements signal a commitment from both Canada and Israel to create the right conditions for trade in their modern, knowledge-based economies. Some of the chapters, including those on gender, labour and environment, are firsts for Israel in a free trade agreement; they are in line with recent agreements signed by Canada.

The modernized CIFTA also benefits Canadian companies by:

Canada-Israel Free Trade Agreement: Timeline


September 2019

The modernized Canada-Israel Free Trade Agreement enters into force on September 1, 2019.

May 2019

On May 27, 2019, Canada’s implementing legislation for the modernized CIFTA (Bill C-85) receives royal assent.

October 2018

The Minister of International Trade Diversification, Jim Carr, introduces Bill C 85, An Act to amend the Canada-Israel Free Trade Agreement Implementation Act and to make related amendments to other Acts, in the House of Commons on October 23, 2018, after having completed its 21-sitting-day period.

June 2018

Under the Policy on Tabling of Treaties in Parliament, on June 20, 2018, the Parliamentary Secretary of International Trade tables the modernized Canada-Israel Free Trade Agreement (CIFTA) treaty, with all binding side instruments, in the House of Commons for 21 consecutive sitting days.  

May 2018

François-Philippe Champagne, Canada’s Minister of International Trade, and Eli Cohen, Israel’s Minister of the Economy and Industry, meet in Montréal, Quebec, to sign the Protocol Amending the Canada-Israel Free Trade Agreement (CIFTA).

June 2017

Cabinet authorizes the signature, implementation and ratification of the 2015 and 2017 amendments.

2017

Canada and Israel agree to a further expansion of CIFTA to include new, inclusive trade provisions dealing with trade and gender, small and medium-sized enterprises (SMEs) and corporate social responsibility (CSR).

July 2015

Canada and Israel announce the conclusion of the modernized CIFTA. Amendments to the 1997 agreement include four updated chapters (Dispute Settlement, Goods Market Access, Governance, and Rules of Origin) and seven new ones (E-commerce, Environment, Intellectual Property, Labour, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, and Trade Facilitation).

January 2014

The prime ministers of Canada and Israel announce the launch of negotiations to modernized CIFTA.

October 2011

The Government of Canada begins consultations with Canadians on an expanded and modernized CIFTA.

1999 to 2003

Canada and Israel negotiate and implement reduction and elimination of tariffs on products previously excluded from CIFTA. This results in a reduction of tariffs on many of Canada's top agricultural and agri-food exports to Israel.

January 1997

The Canada-Israel Free Trade Agreement, a goods-only agreement, enters into force on January 1, 1997, eliminating tariffs on all industrial products manufactured in Canada and Israel.

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