Modernized Canada-Israel Free Trade Agreement: Benefits for Canada

As one of Canada’s long-standing trading partners, Israel represents an important market for Canadian goods and services. Through the modernized Canada-Israel Free Trade Agreement (CIFTA), Canada and Israel are creating the right conditions for increased trade and new opportunities to further expand the Canada-Israel economic partnership.

Summary

• The modernized CIFTA includes new, progressive elements that are highlighted in four updated chapters and seven new chapters.
• The modernized CIFTA increases market access by further reducing tariffs on Canadian exports to the Israeli market, providing new and improved market access for virtually 100% of Canadian exports of agricultural, agri-food and fish and seafood products.
• It also improves the ways in which Canadians do business in Israel by enhancing border efficiencies, increasing regulatory transparency and reducing red tape.
• The modernized CIFTA also includes updates to the dispute settlement mechanism, goods market access, institutional provisions to enhance transparency and rules of origin chapters.

Canada’s progressive trade agenda

The modernized CIFTA is more than just an ambitious trade agreement; it is a new progressive partnership. It is the product of bilateral cooperation to expand the Agreement to include progressive trade elements on gender, small and medium sized enterprises, and corporate social responsibility. These new elements promote the values of Canada’s progressive trade agenda to ensure that the benefits and opportunities that flow from trade and investment are more broadly shared by Canadians.

New progressive elements:

• Trade and gender: This chapter acknowledges the importance of incorporating a gender perspective into economic and trade issues to ensure that economic growth benefits everyone. The chapter also provides a framework for Canada and Israel to cooperate on issues related to trade and gender and establishes a bilateral committee to oversee these cooperative activities and review the implementation of the chapter. Under CIFTA, the new Gender Chapter is now subject to the dispute settlement mechanism
• Small and medium-sized enterprises (SMEs): This chapter includes general provisions that recognize the importance of SMEs to the economies of Canada and Israel, that facilitate cooperative activities and information sharing and that will establish an SME committee to oversee the cooperative activities and review the implementation of the chapter.
• Corporate social responsibility (CSR): This chapter includes a commitment to encourage the use of voluntary CSR standards with specific reference to the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises.

Modernization overview and chapters

In July 2015, Canada and Israel completed negotiations to update four chapters in the Agreement: Dispute Settlement, Goods Market Access, Institutional Provisions, and Rules of Origin. The Agreement was also expanded to include seven new chapters: E-Commerce, Intellectual Property, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Trade and Environment, Trade and Labour, and Trade Facilitation.

Updated chapters:

• Dispute settlement: Improves the efficiency, effectiveness and transparency of the dispute settlement mechanism allowing Canada and Israel to cooperate in addressing and seeking to resolve unjustified non-tariff barriers.
• Goods market access: Provides new and improved commercially meaningful market access through the reduction or elimination of additional Israeli tariffs on agriculture, fish and seafood products that are of export interest to Canadian stakeholders.
• Institutional provisions: Provides a more detailed and robust institutional structure for administration of the Agreement and to enhance transparency.
• Rules of origin: Recognizes the presence of global value chains and the integrated nature of North American production and streamlines the provisions for obtaining preferential tariff treatment.

New chapters:

• Electronic commerce: Commits Canada and Israel to not introduce tariff and other barriers to commerce.
• Intellectual property (IP): Affirms the commitments of Canada and Israel under the World Trade Organization to ensure protection for IP rights, including commitments to facilitate cooperation between Canada and Israel to combat IP rights infringement and explores ways to expedite the examination of patent applications. The IP chapter includes provisions on cooperation on IP rights enforcement between both Canada and Israel, as well as a consultation mechanism to aid in bilateral IP-related matters.
• Sanitary and phytosanitary measures (SPS): Includes provisions to promote bilateral cooperation and transparency on SPS-related issues. Ensuring early and effective cooperation on issues related to food safety, animal, and plant health will help strengthen the protection of Canada’s environment and food supply, while avoiding unjustified barriers to trade.
• Technical barriers to trade: Ensures that technical regulation, conformity assessment procedures, and other standards-related measures cannot be used as unjustified barriers to trade. The chapter will help Canadian exporters by creating a mechanism to minimize, and seek to resolve, the negative impacts of discriminatory or overly burdensome regulatory requirements.
• Trade and environment: Ensures that both Canada and Israel pursue high levels of environmental protection while realizing the benefit of liberalized trade, with recourse to dispute settlement mechanisms.
• Trade and labour: Ensures effective enforcement of labour law that should in turn embody and provide protection for international labour standards, with recourse to an enforceable binding dispute settlement mechanism.
• Trade facilitation: Enhances border efficiencies, increases regulatory transparency, and reduces red tape for Canadian businesses.