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Israel
Israel is a privileged partner of the EU. The EU-Israel Association Agreement entered into force in June 2000 with the aim of providing an appropriate framework for political dialogue and economic cooperation between the Parties.
The EU and Israel maintain a strong trading partnership. Israel ranks 25th in a list of major EU import partners, and 23rd in the export list. The EU is Israel's first trading partner with total trade amounting to approximately €20.2 billion in 2009. The EU is Israel's major source of imports and is the second largest market for exports behind United States (covering 29.3% and 32.9% of the export market respectively).
Israel is ranked as the EU's 25th major trade partner
Trade in goods
- EU good exports to Israel 2009: €11.4 billion
- EU goods imports from Israel 2009: €8.8 billion
In 2009 EU imports from Israel amounted to €8.8 billion, consisting mainly of machinery and transport equipment (25.2%), chemicals (24.5%) and agricultural products (11.1%), particularly vegetable products (8.4%). EU exports to Israel in the same year amounted to €11.4 billion, consisting mainly of machinery (27.6%), in particular power generating machinery (16.3%), transport equipment (10.5%), chemicals (17%), and other semi-manufactures (16.2%). Total EU-Israel trade contracted by 26% in 2009 (2008: €27.4 bn) due to the worldwide economic crisis, with the decline in exports being more moderate (-18%) that the one in imports (-27.3%).
Trade in services
- EU exports of services to Israel 2008: €3.7 billion
- EU imports of services from Israel 2008: €3 billion
Since 2003 trade of services between EU and Israel has increased significantly. EU exports of services to Israel grew annually by 5.5% over the period 2004-2007 while EU imports of services grew by 13.1% over the same period. In 2008 EU exports of services to Israel amounted to €3.7 billion and EU imports of services from Israel to €3 billion. Half of the trade of services between EU and Israel concentrates on business services excluding government services (48% of EU exports and 50.5% of EU imports), while the other half consists of travel and transportation services (respectively 20.6% and 31.2% of EU exports and 25.7% and 23.4% of EU imports).
Foreign Direct Investment
FDI stocks in Israel have almost doubled from 2002 to 2008. FDI inflows grew by over 8% over the period 2007-2008 and reached €41.3 billion in 2008. FDI outflows grew over the same period by 17.3% and reached €38.5 billion in 2008. In 2009, FDI kept growing significantly, reaching around 2.4% of GDP (2008: 1% of GDP). EU investments in Israel amounted to €3.5 billion in 2007 while Israeli investment in the EU amounted to €6.3 billion.
The European neighbourhood policy and financial assistance
Israel is a privileged neighbour for the EU. The European Neighbourhood Policy (ENP) launched in 2004 invited the countries neighbouring the EU to establish together an area of peace, stability and prosperity by proposing closer relations on security matters and in political, economic and cultural fields. The financial instrument of the ENPENPI) aims to financially support political and economic cooperation between the EU and the EuroMed partners. Israel benefits marginally from this instrument, due to its favourable economic position and level of economic development.
In the framework of the ENP, the EU-Israel Action Plan was adopted in April 2005 and established the following priorities: i) enhance political dialogue and co-operation, ii) increase economic integration particularly with the EU, inter alia, by developing trade and investment flows, by liberalising trade in services; iii) promote co-operation in transport, energy and telecom networks. The Action Plan expired in April 2008, and then has been prolonged several times, the last one until June 2010.
The strategic framework for EU cooperation with Israel is established by the Country Strategy Paper (CSP) under the ENPI over the period 2007-2013. The National Indicative Programme for the period 2011-13 provides €6 millions to Israel which will support the following priorities: 1. justice, freedom and security; 2. higher education; and 3. dissemination of information on regulatory approximation between Israel and the EU.
WTO
Israel is member of the WTO since April 1995.
OECD
Israel formally became a member of the OECD on 7 September 2010
Bilateral relations
Trade relations with key trading partners
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