The Department of Foreign Affairs and Trade (DFAT) is currently exploring all potential opportunities and benefits of opening a free trade agreement with Israel.
DFAT is undertaking a feasibility study on how best to strengthen trade and investment with the country.
The Freight and Trade Alliance (FTA) and Customs and Global Trade (CGT) were asked to submit supporting documentation to support this study, outlining why this would be beneficial for Australia.
The FTA and CGT outline in their submission that currently the level of trade with Israel is relatively low. But the absence of this free trade agreement is what is producing the low levels of trade of goods between Israel and Australia.
Australian Exports:
“Australian exporters are at a disadvantage when trading with Israel,” the submission says.
Currently, Israel holds a number of free trade agreements with the USA, Canada and the European Union (EU).
While Israel does not impose high tariffs across all of its imports, it does impose high tariffs on a range of agricultural goods.
For Australia, agricultural goods represent a significant sector for export and opportunity to export these goods into Israel.
However, without a free trade agreement between the two countries, Australia’s export of agricultural goods has little chance of competing in the market due to Israel’s established agreements with USA, Canada and the EU. Goods from these countries are prioritised and have little to no tariffs placed on their agricultural exports into the county.
Australian Imports:
“From an import perspective, Israeli exports complement the Australian industry,” the submission says.
Israel is known for its high technology industries such as information technology and pharmaceuticals. Many of these products are generally duty free on entry into Australia without the need for a free trade agreement.
As a result of this, Australian manufacturers are unlikely to face a significant increase in duty free Israeli imports as a result of the proposed free trade agreement.
As the FTA and CGT outlines, the free trade agreement must be a high quality agreement that is easy for importers and exporters to use for it to have great impact on both countries. Difficulties that could impact the use of the trade agreement are goods assessment and harsh documentation requirements.
In conclusion, the proposal of a free trade agreement between Australia and Israel is beneficial to both parties. Through the increase of duty free Australian exports, this will benefit Australian farmers, manufactures and businesses looking to expand their goods to the Israeli market.
As many Israeli goods that are imported into Australia currently possess minimal tariffs and duty taxes, it is proposed that there will not be a significant increase in goods from Israel into Australia. This protects the Australian manufactures specifically in the Israel’s strong markets such as Information Technology and Pharmaceuticals.
We will continue to provide updates on this situation as it develops.
