Canada-Israel Free Trade Agreement: Backgrounder

What is the Canada-Israel Free Trade Agreement?

The Canada-Israel Free Trade Agreement (CIFTA) entered into force on January 1, 1997, eliminating tariffs on all industrial products manufactured in Canada and Israel, as well as on a limited number of agricultural and fisheries products.

Between 1999 and 2003, additional agricultural and agri-food tariff reductions on goods previously excluded from the agreement were negotiated. The additions included better market access for a number of Canada's top agricultural and agri-food exports to Israel.

On October 10, 2010, Canada and Israel announced they would begin discussions to revise the existing CIFTA. Officials started exploratory talks to move beyond the original, first-generation trade agreement by significantly expanding it.

On January 21, 2014, the Canadian and Israeli prime ministers announced the launch of negotiations to expand and modernize CIFTA. Canadian industry and other stakeholders were consulted before and during the modernization negotiations.

In 2017, Canada and Israel agreed to a further expansion of CIFTA to include new, progressive sections dealing with trade and gender, small and medium-sized enterprises (SMEs) and corporate social responsibility (CSR).

• The chapters on trade and gender and on SMEs provide a framework for cooperative activities on issues in these areas. Each chapter establishes a bilateral committee to oversee activities.
• The CSR article affirms the two countries’ commitment to encourage the use of voluntary CSR standards by enterprises, with specific reference to the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises.

On May 28, 2018, Francois-Philippe Champagne, Canada’s Minister of International Trade, and Eli Cohen, Israel’s Minister of the Economy and Trade, met in Montréal, Quebec, to sign the Protocol Amending the Canada-Israel Free Trade Agreement, which includes the 2015 and 2018 chapters.

Since CIFTA first came into force more than two decades ago, bilateral merchandise trade between Canada and Israel has more than tripled, totalling $1.9 billion in 2018.

Canada’s achievements

As part of the modernized CIFTA, updates were made to four existing chapters:

• dispute settlement
• institutional provisions
• market access for goods
• rules of origin

Nine new chapters and a provision were added that deal with new and ongoing trade elements and issues:

• e-commerce
• intellectual property
• labour
• sanitary and phytosanitary measures
• technical barriers to trade
• the environment
• trade facilitation
• trade and gender
• small- and medium-sized enterprises

• corporate social responsibility

These inclusive trade elements signal a commitment from both Canada and Israel to create the right conditions for trade in their modern, knowledge-based economies. Some of the chapters, including those on gender, labour and environment, are firsts for Israel in a free trade agreement; they are in line with recent agreements signed by Canada.

The modernized CIFTA will also benefit Canadian companies by:

• reducing or eliminating tariffs on agricultural, agri-food and fish and seafood products
• helping to increase market access for businesses of all sizes
• reducing technical barriers to trade
• enhancing cooperation
• increasing transparency in regulatory matters
• reducing transaction costs
• further enhancing Canada’s visibility in the Israeli market