Free Trade Agreements
Summary of the U.S. - Israel Free Trade Agreement
Status: Entered into force on September 1985
**The information presented on this website is meant to serve as a guide.
Only the agreement text and the customs regulations issued to implement the agreement
are definitive. For complex issues or where interpretation is required, U.S. exporters should seek legal assistance or an advanced ruling from the customs administration in the country to which they are exporting.**
If you have any questions about this Agreement, please contact Maria D'Andrea-Yothers
at the U.S. Department of Commerce Office of Textiles and Apparel at 202-482-1550 or by email.
How U.S. Textile and Apparel Companies Benefit
Under the United States-Israel Free Trade Area Agreement (USIFTA), signed in 1985, the United States and Israel agreed to phased tariff reductions culminating in the complete elimination of duties on all products by January 1, 1995. Most tariffs between the United States and Israel have been eliminated as agreed, although tariff and non-tariff barriers continue to affect a certain portion of U.S. agricultural exports.
Through duty-free trade, the USIFTA allows U.S. textile and apparel exporters to be more price-competitive in the Israeli market when competing with domestic suppliers and with third country suppliers that do not receive duty benefits.
As of January 1, 1995, all qualifying U.S. textile, apparel, footwear, and travel goods products exported to Israel were accorded duty-free treatment. However certain customs fees and taxes may still apply. Note: The USIFTA does not cover exports to the West Bank or the Gaza Strip. However, the Palestinian Authority agreed to provide reciprocal duty-free treatment for U.S. products entering the West Bank and Gaza.
Qualifying Products/Rules of Origin
In order to take advantage of the duty elimination, products must qualify as "originating" goods under the terms of the Agreement. In general, if the product is not entirely produced or manufactured in the United States, it must have sufficient U.S. or Israeli content or processing to meet the FTA rules of origin criteria. For example, simple garments such as tee shirts would have to be cut and then, to meet the 35% value-added requirement, be either wholly or partially sewn, and finished in the territory of one or more of the signatory parties to the Agreement. Tailored garments would qualify if they meet the 35% value added requirement and are fully assembled and finished in the territory of one or more of the parties.
A good imported into the Customs territory of Israel is eligible for FTA benefits, if:
No article shall be considered a new or different article of commerce under this Agreement and no material shall be eligible for inclusion as domestic content under this Agreement by virtue of having merely undergone
- the article is wholly the growth, product, or manufacture of a party or is a new or different article of commerce that has been grown, produced, or manufactured in a Party;
- that article is imported directly from one Party into the other Party; and
- the sum of (1) the cost or value of the materials produced in the exporting Party, plus (2) the direct costs of processing operations performed in the exporting Party is not less than 35 percent of the appraised valued of the article at the time of import.
- simple combining or packaging operations or
- mere dilution with water or with another substance that does not materially alter the characteristics of the article or material.
For purposes of determining the 35 percent domestic content requirement under this Agreement, the cost or value of materials that are used in the production of an article in one Party, and which are products of the other Party, may be counted in an amount up to 15 percent of the appraised value of the article. Such materials must in fact be products of the importing Party under the country of origin criteria set forth in this Agreement.
To see more details on these provisions, see Annex 3 (Rules of Origin) of the U.S.-Israel FTA.
For information on the FTA rules of origin specific to importing into the United States, see the U.S. Customs and Border Protection presentation--Agreements and Preference Programs NOT Based on Tariff Shift Rules.
Effective January 10, 2018, U.S. exporters to Israel are no longer required to provide Israeli authorities a hard copy Certificate of Origin (commonly referred to as the “Green Form” or “Form A”) to qualify for preferential access to the Israeli market under the United States-Israel Free Trade Agreement (FTA). Instead, U.S. exporters are required to print and sign a U.S. content (Origin) Declaration on the shipping invoice. American exporters are advised to ensure that they carefully review and understand the language of the FTA’s Rules of Origin Provision before they sign the Origin Declaration. See https://2016.export.gov/israel/forms/cooform/index.asp to complete a form to view the Origin Declaration language and for additional guidelines.
For information on common export documents, such as transportation documents, export compliance documents, certificates of origin, certificates for shipments of specific goods, temporary shipment documents, and other export-related documents, see the Export.gov webpage on Common Export Documents.
Measures to Prevent Circumvention of the Agreement’s Rule of Origin
Measures to Prevent Serious Damage, or Actual Threat Thereof, to the Domestic Industry
Provision no longer applies..
Selling to the Government:
Under the USIFTA, Israel agreed to eliminate all restrictions on government procurement and to relax offset requirements on purchases by government agencies other than the Ministry of Defense. For more information, see Article 15 (Government Procurement) of the U.S.-Israel FTA.
Intellectual Property Rights:
The FTA provides full intellectual property rights for U.S. products. The FTA reaffirms obligations under bilateral and multilateral agreements relating to intellectual property rights.
Qualifying Industrial Zones (QIZs):
In 1996, the U.S. Congress established the Qualifying Industrial Zone (QIZ) initiative to support the peace process in the Middle East. The QIZ initiative allows Egypt and Jordan to export products to the United States duty-free, as long as these products contain inputs from Israel. The QIZ legislation authorizes the President to proclaim elimination of duties on articles produced in the West Bank, Gaza Strip, and qualifying industrial zones in Jordan and Egypt. In order to obtain duty-free access to the U.S. market under the initiative, the goods must be produced in designated QIZ factories and meet specific rules of origin requirements. See the web page on QIZs for more information.
Office of the U.S. Trade Representative Israel FTA website
U.S. Commercial Service Israel Website
Israel Tax Authority website