A Final Agreement Between South Korea And Israel On Free Trade Agreement

Yu Mingxi, Minister of trade and industry of South Korea, and Minister of economic and industrial development of Israel Eli Cohen, jointly announced the final agreement on the "South Korea Israel free trade agreement (FTA)" in Jerusalem (2019) in August 21st.

South Korea and Israel launched the Korea Israel FTA negotiations in May 2016, and held 6 formal consultations in 3 years. In July 15th this year, Israeli President Reuven Rivlin visited South Korea. During the summit meeting with President Wen Yin, he said he expected the two countries to complete the South Korean Israeli FTA negotiations at an early date. Therefore, the two sides accelerated consultations and reached an agreement recently. After the final agreement on the detailed technical contents of the future Israeli South Israel FTA, the text inspection (Legal scrubbing) process will be completed. It will be officially signed. This is also the fourth of the completion of the agreement after the signing of the "South Korea Central America FTA", the formal signing of the "South Korea us FTA", and the agreement between South Korea and Britain.

The main content of the final agreement is FTA.

(1) tariffs on goods:

99.9% of the goods imported from Israel will be zero tariff, 100% from Israel. Among them, about 97.4% of Korea's exports to Israel will enjoy zero tariffs, including automobile, components, spinning and cosmetic products. The tariffs of first semiconductor manufacturing equipment imported from South Korea and second electronic application machines will be abolished within 3 years after the entry of FTA. In addition, more sensitive items such as rice, chili, garlic, onion, mushrooms and radish, such as some agricultural products, processed meat and dairy products, will retain the current tariffs, while Israel's more concerned grapefruit, medical machines and compost fertilizers should be postponed and abolished.

(two) services and investments:

The free and open way of FTA services and investment in South Korea will adopt a negative list (negative), which promises to be more open to the general agreement on trade in services (negative) level than WTO, and to replace the investment protection system of the Korea Israel Investment Guarantee Agreement (BIT and its entry into force in 2003). In addition, Israel will increase the scope of opening up circulation, cultural content and other services, and expand the scope of investment protection to the stage before its establishment, so as to improve the current investment protection agreement. In addition, Israel will extend the valid period of the relevant information on the entry of the ROK people to Israel in the period of validity (currently 1 years), and after the review has confirmed that it has an economic contribution to Israel, it can extend the longest residence period (currently 63 months).

(three) origin, competition and government procurement:

The agreement between the two countries to improve the business environment of South Korean enterprises will be based on the recognition of the origin standard of simple items, in order to provide convenience for enterprises, and to stipulate the regulations for approving the overseas processing of Kaesong industrial park.

South Korea and Israel will plan to promote the institutional provisions of the Korean wave in Israel through the negotiation of South Korea Israel FTA, and protect the intellectual property rights of digital environment such as the Internet, including the protection of intellectual property rights such as the content of Korean wave and music, and the property rights of the industry.

(four) expand the technical cooperation in aviation, health care and medicine, virtual reality, big data (Big Data), renewable energy, IT and BT, artificial intelligence (AI) and agricultural food. The two countries will expand joint research, technology transfer, research talent exchange, exchange of legal system and intellectual property rights, and cooperate in academic, educational and training activities in the future.

According to the resolution of the Security Council of the United Nations (UN), Israel will not be able to apply the tariff preferences of South Korea Israel FTA in the occupied areas since 1967.

According to the analysis of the resources of industry and commerce, the significance of South Korea Israeli FTA to South Korea is as follows:

1. market diversification and expansion of trade:

Israel is one of the main countries in the Middle East. Korea is the first country in Asia to sign FTA with Israel. It is expected that in the future expansion of the Israeli market, it will be more competitive than Japan, China and other competitive countries. In the future, through the Korea Israel FTA, the market of Korea and Israel will be more open, and the industrial structure will complement each other and expand the trade between the two countries. The liberalization rate of product items was 95.2% in Korea and 95.1% in Israel.

2. industry technology cooperation:

South Korea Israel FTA will enable the two countries to expand industrial and technological cooperation in the future areas such as information and communication technology (ICT), bio engineering technology (BT), new renewable energy and aerospace. In addition, the scale of R & D in Korea and Israel accounts for GDP share in the first place in global competition. It is expected that the foundation of the sound manufacturing industry in Korea and the high-tech cooperation in Israel will produce a win-win (win-win) benefit.

The other two countries decided to increase the Korean Israel industrial technology research and development fund from the current 2 million US dollars to US $4 million per year. Since its establishment in 2001, the fund has invested 61 million US dollars to help 174 R & D projects, create new technologies, expand overseas markets and promote new businesses. The fund to be increased in the future will be invested in the development of high-tech industries such as AI, big data and self driving, such as 4 Industrial Revolution projects, new materials, renewable energy and so on.

3. innovation through FTA:

South Korea Israel FTA should be an innovative trade mode to expand the effect of free trade. At present, Israel has developed into an entrepreneurial country with the highest number of IT entrepreneurs per capita and nurturing new industries. The successful establishment of an independent ecosystem can serve as a reference model for Korean Entrepreneurs. Because of the strong strength of Israel in the field of entrepreneurship and innovation, cooperation with Israel is expected to benefit Korean enterprises and SMEs.

In addition, the announcement of the final agreement between South Korea and Israel FTA announced that the South Korean Institute of technology and technology signed a memorandum of understanding on materials, parts and equipment with Israel's Weizmann Institute of science and Technology (MOU). Cooperation between Israel and manufacturing power Korea, which has the experience of original technology and technology industrialization, is expected to upgrade the technology of materials, parts and equipment to the manufacturing industry. In response to the fourth industrial revolution, the two representative research institutes in the future will rapidly expand cooperation in materials, parts and equipment, and will establish a platform that can guarantee Korean enterprises to acquire relevant fields and promote the diversification of supply and export networks.