Following a decade of talks, Israel and South Korea are set to sign a free trade agreement (FTA) next week, the Ministry of Foreign Affairs confirmed on Wednesday.
Seoul had reportedly hesitated to enter into the deal with Israel, fearing an Arab backlash. But the normalization process with the UAE and Bahrain eased those concerns.
The FTA will be signed by Zoom in the presence of the ambassadors to the two countries and senior government ministers.
Israel and South Korea already have economic ties, but the FTA is aimed at enhancing them.
“In 2018, 44 percent of the value of imports from South Korea was in automobiles, with an overall value of $758 million before tax,” reported Globes.
About one-third of the new cars in Israel are made by South Korean companies Hyundai and Kia. Some of the models manufactured by Chevrolet and Renault are also Korean-made, though about half of the Hyundai and Kia cars imported into Israel are assembled in Europe and Turkey using some of their parts made in Korea.
It is not yet known which cars will qualify for a 7% reduction in import duties because they arrive from Korea. Whether the Israeli consumer will enjoy that reduction or whether it will go into the pockets of the manufacturers and importers also remains to be seen.