Us Israel Free Trade Agreement Rules of Origin

The US-Israel Free Trade Agreement (FTA) is a bilateral trade agreement between the United States and Israel that was signed in 1985. The agreement eliminated tariffs and other trade barriers on goods traded between the two nations, making it easier and cheaper for businesses to conduct trade.

One of the key elements of the US-Israel FTA is the rules of origin, which specify which goods qualify for duty-free treatment under the agreement. The rules of origin are designed to prevent third-party countries from using the FTA to bypass tariffs and gain access to the US or Israeli markets.

Under the rules of origin, goods must meet certain criteria in order to qualify for duty-free treatment. The criteria include:

1. Product-specific rules: Each product must meet specific criteria that are set out in the FTA. For example, a product may need to be entirely made in the US or Israel, or it may need to contain a certain percentage of US or Israeli content.

2. Regional value content: Goods must also meet a minimum regional value content (RVC) threshold, which is the percentage of the value of the product that is produced in the US or Israel. The RVC varies depending on the product and is designed to ensure that the majority of the value-added in the product comes from the US or Israel.

3. Change in tariff classification: In some cases, the goods must undergo a change in tariff classification to qualify for duty-free treatment. This means that the product must be transformed or processed in a way that adds value to the product.

The rules of origin are complex and can be difficult to navigate, which is why it is important for businesses to understand them before engaging in trade. To ensure that goods qualify for duty-free treatment, businesses may need to provide documentation and maintain detailed records of the production process.

In addition to the rules of origin, the US-Israel FTA also includes provisions on intellectual property, labor rights, and environmental standards. By promoting free trade and fair competition, the FTA has strengthened the economic ties between the US and Israel and helped to drive growth and innovation in both nations.

Overall, the US-Israel FTA is an important agreement that provides significant benefits to businesses and consumers in both countries. By adhering to the rules of origin and other provisions of the agreement, businesses can take advantage of the many opportunities for trade and investment that the FTA offers.