Photo Credit: Kobi Richter/TPS
Ukraine International Airlines's plane is taking off from Ben Gurion Airport in central Israel. Lod, Nov 7, 2018.

A Free Trade Agreement (FTA) between Israel and Ukraine took effect over the weekend and is estimated to double the trade between Israel and Ukraine within the next two to three years to $2 billion.

Signed in January 2019 and ratified by both governments, the agreement promotes the development of bilateral trade and economic cooperation between the two countries and reduces tariffs on Israeli exports to Ukraine and on Ukrainian exports to Israel.


The FTA provides Israeli exporters with free access to the Ukrainian market on many items that until now were subject to customs tax, including machinery, medical equipment, plastic and rubber products, chemicals, fruits and vegetables.

In return, Israel abolished or reduced customs taxes on various agricultural products, including wheat, currently subject to 50% tax, fish, processed foods, various types of oils, iron, steel and other raw materials for industrial use.

Ukraine is among the world’s largest exporters of grains and industrial raw materials.

Ukraine is an important trading partner for Israel. According to the Israeli Ministry of Economy and Industry, exports from Israel to Ukraine in 2017 totaled $130 million, with a total trade volume of approximately $940 million.

Exports from Israel to Ukraine in 2019 amounted to about $162 million, and the total volume of trade in 2019 was about $857 million.

The main industries exporting goods from Israel to Ukraine are chemicals with 63%, plastics and rubber at 10%, and machinery at some 8%.

The main imports of goods from Ukraine to Israel are agricultural products and food products with 74%, base metals at 16%, and machinery with 4%.

“Ukraine is a good friend of Israel and the strengthening of economic relations with it is a necessary step. The signing of the free trade agreement between Israel and Ukraine will open up additional opportunities for Israeli exports in this market and will also be a foothold for Israeli exporters in the Eastern European market,” stated Israeli Minister of Economy Amir Peretz on Monday.

About 70% of Israel’s international trade takes place within the framework of FTAs.

In the past decade, seven free trade agreements have been signed or upgraded with countries such as South Korea, Colombia and Canada. This doubles the seven agreements that were in force in 2009.

In addition, Israel is currently negotiating with a variety of other significant markets such as China, Vietnam, Russia, Belarus, Kazakhstan, Kyrgyzstan, Armenia and Guatemala.

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Aryeh Savir is director of the International division of Tazpit News Agency.