The United States–Israel States Free Trade Agreement (FTA) is a

trade pact A trade agreement (also known as trade pact) is a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. It exists when two or more countries agree on terms that help them trade with each other. The most common tr ...

between the State of Israel and the

United States of America The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territo ...

established in 1985 to lower

trade barriers Trade barriers are government-induced restrictions on international trade. According to the theory of comparative advantage, trade barriers are detrimental to the world economy and decrease overall economic efficiency. Most trade barriers work ...

in some goods. The agreement reduces rates of duty, and in some case eliminates all duties, on merchandise exported from Israel to the United States. The agreement also covers merchandise exported from the

Gaza Strip The Gaza Strip (;The New Oxford Dictionary of English (1998) – p.761 "Gaza Strip /'gɑːzə/ a strip of territory under the control of the Palestinian National Authority and Hamas, on the SE Mediterranean coast including the town of Gaza.. ...

and the

West Bank The West Bank ( ar, الضفة الغربية, translit=aḍ-Ḍiffah al-Ġarbiyyah; he, הגדה המערבית, translit=HaGadah HaMaʽaravit, also referred to by some Israelis as ) is a landlocked territory near the coast of the Mediter ...

. The U.S.–Israel FTA was the first such free trade agreement entered into by the United States. It is the only FTA the United States has signed that does not include a chapter on

intellectual property rights Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...

, which have become a staple of all subsequent U.S. trade treaties.

History

Negotiations for the pact began January 1, 1984, and concluded February 1, 1985. The pact was signed on April 22, 1985. Implementing legislation was introduced into the

U.S. Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washin ...

on April 29 by Rep. James C. Wright, Jr. (D–

Texas Texas (, ; Spanish: ''Texas'', ''Tejas'') is a state in the South Central region of the United States. At 268,596 square miles (695,662 km2), and with more than 29.1 million residents in 2020, it is the second-largest U.S. state by ...

). This legislation was approved by the U.S. House of Representatives on May 7 by a 422–0 vote, and by the

U.S. Senate The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and pow ...

on May 23 by a

voice vote In parliamentary procedure, a voice vote (from the Latin ''viva voce'', meaning "live voice") or acclamation is a voting method in deliberative assemblies (such as legislatures) in which a group vote is taken on a topic or motion by responding vo ...

. The pact was signed into law by President Ronald Reagan on June 11, and implemented on September 1. On January 1, 1995, all products produced in Israel that were eligible for reduced duty under the agreement became duty-free.

Israel-United States bilateral economic relationship

The FTA between Israel and the United States was signed to set an example to the rest of the world to move forward with trade liberalization. The United States goals were to create bilateral economic relations with Israel beyond military support, reduce Israel's dependence on US assistance, and strengthen the Israeli economy. Israel’s goals of the FTA were to secure a large trading market outside of the Arab boycotting region due to political conflicts, build trade with higher income countries to reduce debt, and to strengthen ties between the United States beyond economic means. Under the bilateral economic relationship, the United States is Israel’s largest trading partner and Israel is the United States's 24th largest trading partner. With an $8 billion U.S. goods trade deficit in 2014, the United States' total goods imported were $23 billion and total goods exported were $15 billion. The top United States-Israel imports and exports are precious stones/diamonds, machinery, pharmaceutical products, medical investments, and agriculture products. United States leading imports from Israel in 2014 were $9.4 billion in diamonds and $4.6 billion in pharmaceuticals. Machinery, electric machinery, and optic/medical instruments imports were all around $1.5 billion in 2014.

References

External links

{{DEFAULTSORT:Israel-United States Free Trade Agreement Foreign trade of Israel Free trade agreements of the United States 1985 in Israel Treaties concluded in 1985 Treaties entered into force in 1985 Treaties of Israel Israel–United States relations