Israel and South Korea to sign free trade agreement

Legislation | | MIC Customs Solutions |

A new free trade agreement between Israel and South Korea could come into force this month.

Israel and South Korea will sign a multi-billion dollar free trade agreement when Israeli prime minister Benjamin Netanyahu flies to Asia at the end of this month, it has been reported.

According to the Hebrew TV station Channel 13, both sides are keen to ink the deal in a bid to boost trade between the two nations and remove bureaucratic barriers.

However, the agreement will exclude Israeli settlements in the West Bank, East Jerusalem and Golan Heights as part of a unique territorial clause.

Israel and South Korea established diplomatic relations in 1962 and Israel has had an embassy in Korea since 1992, but no deal has ever been signed before due to these excluding clauses.

Now, though, an agreement has been reached, provided that a disclaimer is included to state the paragraph excluding these territories does not alter Israel's view of their status.

This is a clause Israel has already used to further free trade agreements, including one with the European Union, Channel 13 points out.

It is hoped that the new deal will significantly increase Israeli exports to South Korea, as well as resulting in cheaper exports and lower production costs.

Israel's president Reuven Rivlin is currently on an official visit to South Korea and has met with his counterpart Moon Jae-in, with the two signing agreements on increasing cooperation in the energy and education sectors.

They also reportedly discussed South Korea's summit with US president Donald Trump and North Korea's Kim Jong Un at the Demilitarized Zone, as well as the issue of peace between northern and southern parts.

Other items on the agenda included bilateral ties and high-tech industry such as 5G communication and artificial intelligence.

Mr Rivlin was welcomed by start-ups minister Park Young-sun and also invited to meet with a business delegation in the Asian nation.

It is expected that Mr Netanyahu will continue to Japan to discuss trade following his stop-off in South Korea.