Israel, Ukraine free trade agreement to go into effect New Year's Day

Ukrainian President Volodymyr Zelensky highlighted positives of the agreement, a culmination of seven years of negotiations, through his Twiter account.

Israel's Netanyahu meets Ukrainian President Zelensky in Jerusalem (photo credit: ODED BALILTY/POOL VIA REUTERS)
Israel's Netanyahu meets Ukrainian President Zelensky in Jerusalem
(photo credit: ODED BALILTY/POOL VIA REUTERS)
A free trade agreement between Israel and Ukraine is set to go into effect when the clocks strike midnight on the New Year's Eve, eliminating import taxes on food products coming in from the Eastern European country.
Ukrainian President Volodymyr Zelensky highlighted positives of the agreement, a culmination of seven years of negotiations, and congratulated Prime Minister Benjamin Netanyahu on its success on Twitter last week.
"This is a new level of relations between [Israel and Ukraine] and the 'green light' to the growth of exports, closer cooperation in the fields of high-tech, engineering and investment," he wrote.

The FTA will not only eliminate taxes of choice Ukrainian exports, it is also expected to lower food costs in Israel, reduce tariffs on Israeli exports to the Ukraine, lower the cost of living and bolster economic and tech cooperation between the two countries.
"This agreement will help lower the cost of living in both countries, and will serve to promote Ukrainian industry," added Israel's Ambassador to Ukraine Joel Lion, in response to Zelensky’s statement.
Israel will reduce its current customs taxes on agricultural products coming from Ukraine, such as wheat, fish, processed foods, as well as raw materials such as iron, steel and oils..
In exchange, items that were subjected to customs tax in Ukraine before the FTA will now be prime for purchase, opening up the market for Israel to low cost medical equipment, plastics, rubbers, chemicals, machinery and of course fruits, vegetable and other food products coming from Ukraine, among other examples.
Israeli exporters are also expected to take benefit from the FTA, as products such as plastic irrigation pipes, avocados and peppers will be duty free within Ukraine. Duties on wines were previously eliminated prior to the signing of the current FTA, and will maintain its status through the transition.
"The main purpose of the agreement is to strengthen economic cooperation between Ukraine and Israel through the expansion of mutual trade,” said Deputy Chief of Staff of the President of Ukraine Ihor Zhovkva.
"As a result, more quality Ukrainian products will arrive in Israel next year, including sweets, nuts, juices, baked goods, poultry, dairy products, vegetable oils, eggs, honey and more," he added. "In a few years, the elimination of customs will lead to an increased supply of flour, ketchup, tomato paste, seeds, tobacco and duck meat to Israel. Israeli consumers can expect lower prices on all of these products."
Exports from Israel to Ukraine total $130 million annually, and a total trade volume in the ballpark of $940 million. It is expected to double to around $2 billion when the FTA goes into effect.
Ukraine is the top exporter of sunflower and cotton seeds for the production of oils, and its the fourth largest exporter of wheat, corn, barley and industrial semi-processed iron and steel.


Tags ukraine trade