The European Neighborhood Policy has clearly enhanced the pace of cooperation between the EU and Israel in a large number of fields, including EU-Israel political dialogue and Israel's involvement in a number of European initiatives In the beginning of the month, the European Commission submitted a communication to the European Parliament and the European Council regarding implementation of the European Neighborhood Policy (ENP), including a report on Israel. Background and overall assessment Israel and the European Community first established contractual relations in 1975 by signing a Cooperation Agreement. The Euro-Mediterranean Partnership inaugurated at the 1995 Barcelona Conference established a policy with ambitious long-term objectives. The Association Agreement with Israel, which entered into force in 2000, sets out in more detail the specific areas in which the objectives of the Euro-Mediterranean Partnership can be developed bilaterally. On this basis, the European Union-Israel Action Plan was adopted in April 2005, for a period of three years. A first ENP progress report was adopted in December 2006. The report finds that intense institutional cooperation through the EU-Israel Association Council, the EU-Israel Association Committee and 10 subcommittees has enabled both sides to progress with the implementation of the Association Agreement, and more recently the Action Plan. In the framework of the EU-Israel Reflection Group, work is ongoing to identify areas to upgrade the future of EU-Israel relations. The document reports on overall progress made on the implementation of the EU-Israel Action Plan between November 1, 2006, and December 31, 2007, although developments outside this period are also considered when deemed relevant. It is not a general review of the political and economic situation in Israel. Israel has been an active partner in the framework of the ENP, as demonstrated by the progress made in implementing a large number of priorities of the Action Plan. Sound macroeconomic policies associated to a buoyant external demand have allowed the Israeli economy to expand for a fourth consecutive year. The ENP has clearly enhanced the pace of cooperation between the EU and Israel in a large number of fields, including EU-Israel political dialogue and Israel's involvement in a number of European initiatives. Having agreed to a framework protocol with the European Commission, Israel is the front-runner in making use of the new possibilities for ENP partner countries' participation in European Community programs. It has also sought closer cooperation with European Commission and EU agencies. Last October, Israel agreed to start bilateral negotiations on a Free Trade Agreement for the liberalization of services and establishment at the beginning of 2008. On the domestic front, the report finds that based on a 2003 government decision, key ministries are developing sustainable development-implementation plans; several have been completed. Still, more efforts are needed to address the increasing poverty gap and to improve the situation of the Arab minority by adopting adequate measures, for example, in employment, education and public administration. Combating terrorism According to the report, bilateral cooperation in this field has continued to progress. In addition to regular contacts among specialists from both sides, an ad hoc "Israel-EU troika ENP seminar on radicalization and recruitment of terrorists - analysis and prevention" took place last June in Israel. This bilateral event, attended by Israeli, member state and European Commission experts, gave the opportunity to exchange views, experience and best practices in countering radicalization and recruitment of terrorists. The Israeli government put considerable emphasis on terrorism as a challenge to security and political leadership. Israel expressed interest to deepen collaboration with the EU, drawing on Israeli expertise in the subject matter, notably in the areas of money laundering and financing terrorism, as well as homeland security. A report by the UN special rapporteur for the promotion and protection of human rights and fundamental freedoms while countering terrorism, found a number of incompatibilities between Israel's counterterrorism laws and practices and the country's international human rights obligations. Trade-related issues, market and regulatory reform In 2006, according to the report, the EU was the first trading partner for Israel, with imports representing 38.2 percent and exports 28.3%, and with an increase of 1.6% and 2.6% respectively. Data for the first quarter of 2007 showed an increase of 7.2% and 3.0% respectively, compared to the same period of 2006. Negotiations on the further liberalization of trade in agricultural, processed agricultural and fishery products are proceeding. Work is ongoing toward the adoption of a "dispute settlement mechanism," establishing a more effective and streamlined mechanism specifically applicable to trade in the framework of the agreement. The European Commission expressed its willingness to relaunch, as soon as the political circumstances allow, the discussions in the framework of the trilateral working group on trade established between the European Commission, Israel and the Palestinian Authority, with the objective of increasing technological cooperation between Israel and the PA. In the area of customs cooperation and mutual assistance, the European Commission shared with the Israeli authorities the AFIS software (OLAF's Anti-Fraud Information System, containing the modules "AFIS mail," "YACHTINFO" and "MARINFO") that allows Israel to be connected to AFIS. AFIS enables customs services to exchange and disseminate information on smuggling activities and requests for action. The information system offers immediate access to the relevant customs information without communication barriers. Israel is in an advanced phase of implementing the World Customs Organization's Framework of Standards to Secure and Facilitate Global Trade. With a view to striking a balance between security and trade facilitation, the EU and Israel agreed to continue exchanging information on these subjects and, in particular, on the developments of current and future legislation and advantages of the concept of Authorized Economic Operator (AEO). email@example.com Ari Syrquin is the head of the International Department at GSCB Law Firm.