Canada-Israel Free Trade Agreement

Part 2 - Trade in Goods

Chapter Two - Tariff Elimination and Related Matters

Tariff Elimination

Article 2.1: Tariff Elimination

1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any customs duty, or any charge of equivalent effect on an originating good to which paragraph 2 applies.

2. Except as otherwise provided in this Agreement, each Party shall,

• (a) by January 1, 1997, eliminate its customs duties on originating goods listed in Chapters 25 to 97 of the Harmonized System with the exception of the tariff items listed in Annex 2.1.1 and
• (b) in the case of originating goods listed in Chapters 1 to 24 of the Harmonized System eliminate or reduce duties on goods in accordance with Annex 2.1.2.

Related Matters

Article 2.2: Customs Duties: Repair and Alteration

1. Neither Party may apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory.

2. Neither Party may apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair or alteration.

3. The Parties shall comply with the requirements set out in Annex 2.2.3, as amended by the Parties from time to time, to verify that the repair or alteration has been performed in the territory of one of the Parties.

Article 2.3: Definitions

For purposes of this Chapter:

Customs duty includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, but does not include any:

• (a) charge equivalent to an internal tax imposed consistently with Article III:2 of the GATT 1994 as specified in, or any equivalent provision of a successor agreement to which both Parties are party, in respect of like, directly competitive or substitutable goods of the Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
• (b) antidumping or countervailing duty that is applied in accordance with the WTO Agreement, including the GATT 1994 pursuant to a Party's domestic law; and
• (c) fee or other charge in connection with importation commensurate with the cost of services rendered.

existing customs duty means the rate of duty applicable to imports from the other Party on January 1, 1996.

repair or alteration does not include an operation or process that either destroys the essential characteristics of a good or creates a new or commercially different good.

Annex 2.1.1

1. Each Party agrees to phase out by July 1, 1999, the Most Favoured Nation rate of duty in effect on January 1, 1996 on the goods listed below, by the following percentages of those rates:

• a) January 1, 1997 10%
• b) July 1, 1997 30%
• c) July 1, 1998 30%
• d) July 1, 1999 30%

Canada

Women's or girls' swimwear in tariff items:

• 6112.41.00
• 6112.49.00
• 6211.12.00

Israel

Woven cotton fabric in tariff items:

• 5209.32.00
• 5209.39.00
• 5209.42.00

2. Article 2.1(2) does not apply to goods provided for in headings 35.01 and 35.02.

Table 1: Annex 2.1.2 A, Canada

Table 2: Annex 2.1.2B Israel

General Notes to Annexes 2.1.2A and 2.1.2B

1. The "HS No." column sets out those tariff items, subheadings, headings or chapters, as appropriate, with respect to which duty is being reduced or removed.

2. The goods described in the column entitled "Description of Goods" are representative only, except where the respective HS No. is prefaced by "ex", wherein the description sets out all those goods subject to the level of duty in the Duty column.

3. The "Duty" column sets out the rate of duty that shall be effective by January 1, 1997, applicable to the goods classified within the appropriate HS No., subject to the specific provisions.

4. The "Specific Provisions" column sets out any qualifications to the "Description of Goods" and the rate of duty for that HS No.

Annex 2.2.3

Requirements Concerning Verification of Repairs and Alterations

Upon reimportation into the territory of a Party of a good that has been exported to the territory of the other Party for repair or alteration, an importer shall submit:

• (a) an invoice or a written statement from the person who performed the repair or alteration, setting out a detailed description of and the value of the repair or alteration; and
• (b) proof of exportation of the good to the territory of the other Party.