China and Israel continue to make progress on the free trade agreement. The Ministry of Foreign Affairs of the People’s Republic of China reported that at the end of March, another round of direct talks on the agreement took place between representatives of the Israeli and Chinese governments. This is the eighth round of talks since 2016 and the first since November 2019 to be held face-to-face.
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According to the Chinese Foreign Ministry announcement, the talks covered, among others, cargo transportation, rules of origin, customs procedures, health procedures, e-commerce, environment, copyrights, competition, government procurement, dispute settlement, and legal procedures. .
It is noteworthy that unlike the Chinese side, the Israeli side did not make any official announcement about the meeting. A source close to the talks said that they are “in an advanced stage of narrowing down, and in fact the agreement between the two countries could be signed this year.” However, the experience of similar agreements in the past, such as the one signed between Israel and South Korea in 2021, shows that the formal ratification process after signing can take more than a year.
China is Israel’s second largest trading partner. The value of trade between the two countries rose 11.6% in 2022 to $24.45 billion. Chinese automobile imports to Israel have greatly contributed to the expansion of trade. In the first quarter of this year, Chinese-made cars ranked second in auto exports, after South Korea and ahead of Europe and Japan.
About 18,000 Chinese-made vehicles were sold in Israel in the first quarter, representing 17% of the market and a 450% increase over the first quarter of 2022. Israeli car importers are watching the progress of the free trade talks closely, due to the possibility of canceling the 7% duty currently imposed on Vehicles imported from China. Electric cars that are not imported from China but have batteries made in China are charged the same fee. Eliminating the fee could offset the negative impact on prices from a higher purchase tax on electric vehicles.
Published by Globes, Israel business news – en.globes.co.il – on April 27, 2023.
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