South Korea finalizes free trade deal with Israel

The free trade agreement between Israel and South Korea is set to take effect on December 1.

President Rivlin meeting with President Moon of South Korea (photo credit: KOBI GIDEON/GPO)
President Rivlin meeting with President Moon of South Korea
(photo credit: KOBI GIDEON/GPO)

The free-trade agreement between Israel and South Korea is set to take effect on December 1, after the parliament in Seoul gave it final approval on Tuesday.

“This is significant good news for Israel’s relations with South Korea, one of the leading economies in the world and an important trade partner for Israel,” Economy Minister Orna Barbivay said.

The Economy Ministry estimates that the value of the agreement to the Israeli market will be NIS 500 million each year, and it will lower the price of Kia and Hyundai cars, food products, toys, video-game consoles and more.

“Israeli exporters will enjoy easier conditions and a competitive advantage, and I expect that additional importers will recognize the potential and increase imports to Israel in quantity and variety of products,” Barbivay said.

What will the free trade agreement be for Israel? 

President Rivlin meeting with President Moon of South Korea (credit: KOBI GIDEON/GPO)President Rivlin meeting with President Moon of South Korea (credit: KOBI GIDEON/GPO)

The free-trade agreement will be Israel’s first with a country in East Asia. South Korea has 18 free-trade agreements, including with the US, EU, India and China.

Jerusalem and Seoul finished negotiating the agreement in May 2021.

The agreement will exempt more than 95% of Israeli exports to South Korea from duty, making Israel more competitive in the Korean market in areas such as electronic equipment, machines, fertilizers, medical supplies, cosmetics, plastic products, metals, fruit juices, wine and more.

Trade between Israel and South Korea reached $3.5 billion in 2021, a 35% increase from the previous year