In 2016 the volume of Ukrainian export to Israel decreased by 20%. Export of steel and crops was the most affected.  

In November 2016 the media reported about Israel’s plans to sign free trade agreement (FTA) with Ukraine. In February 2017 leaders of both countries reiterated their intentions to speed up the process of the FTA establishment.  

Cooperation with Israel will provide Ukraine with substantial investment and trade support in spheres of agriculture, industry, energy, IT and tourism. The FTA will contribute to decrease of prices of imported products, facilitate technological and experience exchange between countries, ensure the flow of fee and tax payments to the state budget.   

The key problem with Ukrainian export is that we sell raw materials instead of processed products  

We export mainly crops (44,1%) and iron (26.4%) to Israel, while the export of food industry products remains scarce – only 9,8%. 

At the same time, we import from Israel many high added value products. The structure of import from Israel is the following: petrochemical industry products – 41%, chemical products – 17%, polymer materials and plastic products – 7%. Taking into account that products imported from Israel have better quality than those of local producers, the benefits of FTA for Ukraine may appear to be not so obvious.   

«Agrotrade» group of companies has recently conducted first supplies of flour to Middle East countries, notably to Israel and Palestine. They exported 245 tons of extra-high quality flour having received much more profit than from the export of the same amount of wheat. According to the chief financial officer of «Agrotrade» – the company’s export potential for flour is 2,000 tons per month – more than Ukraine’s overall crops export to Israel in 2014.   

Currently, the issue of export of Ukrainian eggs is also actively considered by the parties. Israel has to lift restrictions on the export of Ukrainian egg products which were introduced when the salmonella Enteritidis was found in eggs exported to Israel. Import restrictions will remain in place until the original cause of contamination is defined and eliminated.  

Why FTA with Israel is not similar to that with Canada  

If to compare the yet to come FTA with Israel with the FTA already in place with Canada we’ll see completely different approaches to its implementation and thus totally different conditions of cooperation. Within the framework of the FTA with Canada, we get more than we give: the lifting of customs fees for Ukrainian products will open 98% of the Canadian market for national exporters. Producers of the following products will benefit from the FTA with Canada immediately: sunflower oil, beer, and juices, honey, chocolates, and confectionery.  

The FTA will also create favorable conditions for Canadian investors by ensuring relevant protection of their funds – a step intended to increase credibility of our country among other major investors.  

Canadian producers will also be able to export various high-quality equipment to Ukraine at lower prices. It will enable us to increase the efficiency of different industrial sectors and boost their production capacity. Israel also has some investment potential for Ukraine which is nevertheless limited due to peculiarities of Israeli import procedures.  

The export strategy recently presented by the Ministry of Economic Development and Trade of Ukraine aimed at facilitation of access of national producers to external markets will be something to rely on in the nearest future. According to its agenda, over 50 various legislative, organizational, educational and innovational goals are to be achieved in order to increase export revenues. In 2015 we exported $597 million worth products to Israel, while in 2016 this amount decreased to $489 million. Considering this, we still have a lot of work to do.