Why is the Canada-Israel Free Trade Agreement (CIFTA) important to Canada?
Canada is a trading nation. Canadians’ standard of living depends on robust international trade as a key driver of economic growth for a prosperous middle class.
Israel, with a GDP of $479.2 billion, is an important economic player in the Middle East and offers a range of opportunities for Canadians and Canadian businesses, including in trade, investment, science, technology and innovation.
Since CIFTA came into force in 1997, Canada-Israel merchandise trade has more than tripled, reaching a value of over $1.9 billion in 2018.
Why modernize CIFTA?
The original CIFTA was a goods-only agreement that eliminated tariffs on all industrial products and some agricultural, fish and seafood products.
Canada and Israel agreed to modernize CIFTA, by updating existing chapters and adding new elements. This will make CIFTA a 21st-century agreement by reducing technical barriers to trade, enhancing cooperation, increasing transparency in regulatory matters, reducing red tape for business and adding inclusive elements that seek to ensure the benefit and opportunities that flow from trade are more widely shared are in line with Canada’s progressive trade agenda.
Through the modernized CIFTA, Canada and Israel are creating the right conditions for trade in their modern and knowledge-based economies.
What are the expected benefits of a modernized CIFTA?
The modernized CIFTA includes additional provisions to help Canadian businesses succeed in the Israeli market. The expected benefits of a modernized CIFTA include:
new provisions that address non-tariff barriers and establish mechanisms to allow Canada and Israel to discuss, prevent and resolve unjustified non-tariff barriers that may arise
enhanced border efficiencies, increased regulatory transparency and reduced red tape.
new and improved market access for virtually 100% (up from 90%) of Canadian exports of agricultural, agri-food, fish and seafood products to Israel
a more level playing field for Canadian exporters competing with those from other countries, such as the United States and the European Union
support for Canada’s inclusive trade approach in areas such as gender equality, small and medium-sized enterprises and corporate social responsibility
How does the modernized CIFTA align with Canada’s inclusive trade agenda?
The modernized CIFTA is more than just an ambitious trade agreement: it is the product of bilateral cooperation that prioritizes inclusive trade.
The inclusive trade approach is integral to Canada’s trade policy and is being negotiated in all of Canada’s new free trade agreements. Everyone benefits when more Canadians are able to participate in the global economy.
CIFTA’s modernization provided an opportunity for Canada to add progressive elements, such as on:
trade and the environment, to ensure that both countries pursue high levels of environmental protection while realizing the benefits of liberalized trade
trade and gender, to acknowledge the importance of incorporating a gender perspective into economic and trade issues and to ensure that economic growth benefits everyone
trade and labour, to commit the two parties to effectively enforcing their labour laws, which must, in turn, embody and provide protection for internationally recognized labour rights and principles, with recourse to an enforceable binding dispute-settlement mechanism
small and medium-sized enterprises (SMEs), to include general provisions on the importance of SMEs to Canada’s and Israel’s economies, to facilitate cooperative activities and information-sharing and to establish an SME committee to oversee the cooperative activities and review the implementation of the SME chapter
Benefits will take effect on the date that CIFTA enters into force, once both countries have completed their respective ratification process, which could occur in 2019.
