Jerusalem: Israel and South Korea announced Wednesday they have concluded a free trade agreement to eliminate tariffs on goods ranging from cars to video games.
“This is the first free trade agreement of its kind that we have with an Asian economy, and what an economy,” Prime Minister Benjamin Netanyahu said.
“A leading economy in the global arena; an advanced and vibrant economy,” he said, standing alongside South Korean Trade Minister Yoo Myung-hee after they met in his Jerusalem office.
It was not clear when the agreement would enter into force.
“The advantage of this agreement will go beyond our economic ties,” Israeli Economy Minister Eli Cohen said at an earlier ceremony to formally announce the deal.
“I’m confident that this will also mark the start of a new era and an even closer friendship between Israel and Korea.”
Yoo said at the ceremony that she hoped “Israeli companies will take full advantage of Korea as a stepping stone into the vast Asian market.”
Before Wednesday’s ceremony, the pending agreement had been the subject of political controversy in Israel, over claims it would not apply to goods from Israeli settlements.
Cohen denied that was the case and said if businesses in settlements were in any way disadvantaged they would be compensated by the government, as is the case with other trade deals.
The issue is a sensitive one in Israel, particularly ahead of September 17 elections. Israeli settlements are viewed as illegal under international law.
Negotiations on the agreement stretched three years.
Trade between the two countries reached $2.5 billion last year, an increase of nearly 15 percent over 2017, according to Israel’s economy ministry.
“I am sure that this will multiply the volume of trade between us,” Netanyahu said of the new agreement.
South Korea is home to companies including Samsung, the world’s biggest smartphone and memory chip maker, and carmaker Hyundai.
The deal foresees tariffs removed on Israeli imports of goods including vehicles, industrial machinery and video game consoles, according to Israel’s economy ministry.
Israeli exports to South Korea of goods including medical equipment, fertiliser, wine and cosmetics would also see tariffs eliminated, it said.
Israel is a major exporter of arms and defence equipment, but there was no mention of those being included in the deal.