Free Trade Agreement with Guatemala Comes into Effect

Free Trade Agreement with Guatemala Comes into Effect

On the final day of February, Thursday the 29th, a significant milestone was reached in the realm of international trade as the ratification process of the free trade agreement between Israel and Guatemala was completed. This agreement, which was initially inked in September 2022, concluded with the signing of Israel’s Finance Minister Bezalel Smotrich, marking the commencement of a new era in the economic relationship between the two nations.

The primary component of this agreement is a significant decrease in trade duties on a variety of goods. For Israel, this includes items such as instruments, machines, chemicals, and medicines being supplied to Guatemala. Conversely, for Guatemala, the reduction applies to goods like food, flowers, and nuts being exported to Israel. This mutual reduction in duties is aimed at fostering a more robust trade relationship between the two countries.

Prior to the ratification of this treaty, the trade turnover between Israel and Guatemala was a modest $40 million. However, with the agreement now in effect, there are expectations of a substantial increase in this figure, leading to a more dynamic and lucrative trade relationship.

Israel boasts one of the world’s most comprehensive collections of free trade agreements, with existing agreements with 45 countries across the globe. This includes 27 EU countries, the UK, EFTA nations (Iceland, Norway, Switzerland, Liechtenstein), Turkey, Mexico, Canada, the US, the MERCOSUR bloc (Argentina, Brazil, Uruguay, Paraguay), Colombia, Panama, Ukraine, South Korea, UAE, and now, Guatemala. Furthermore, an agreement with Vietnam is in the pipeline, currently awaiting ratification.

Additionally, Israel has been in negotiations with the People’s Republic of China since 2016 to establish a free trade agreement. These discussions had reached their final stages with the signing of the agreement anticipated before the end of 2023. However, due to the War of the Iron Swords, relations between the two nations have soured, leaving the future of the agreement uncertain. Similar uncertainty surrounds the negotiations for free trade with the EAEU (Russia, Belarus, Kazakhstan, Kyrgyzstan, Armenia).

Yet, Israel’s trade ambitions do not stop there. Ongoing negotiations for free trade agreements with Chile and India are in progress. The Australian government has also voiced its intention to expedite negotiations with Israel. Furthermore, the first round of free trade discussions with Bahrain has concluded, and negotiations with Japan have been initiated. In 2023, Israel and Georgia moved to a new stage of negotiations, and Moldova entered the negotiation process during the summer.

Israel has also established special industrial zones with Egypt and Jordan. Goods produced within these zones are shipped duty-free to the United States, further enhancing Israel’s global trade portfolio.

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