The United States–Israel Free Trade Agreement (USIFTA), signed in 1985, is the United States’ oldest FTA and a cornerstone of bilateral economic cooperation. It paved the way for today’s high-tech, defense, and innovation-driven trade relationship between the two countries.

For U.S. exporters, USIFTA means duty-free or preferential access to a market that values advanced technology, life sciences, software, and agricultural innovation. The agreement continues to evolve through ongoing updates and cooperation frameworks reflecting the growing importance of digital trade and R&D collaboration.

---

Overview of U.S.–Israel Trade

• U.S. Exports to Israel (2023): $14.2 billion, dominated by machinery, electrical equipment, medical instruments, and software services.
• Israeli Exports to the U.S. (2023): $21.2 billion, led by pharmaceuticals, electronics, and diamonds.
• Tariff Treatment: Most industrial goods trade duty-free; some sensitive agricultural and limited industrial products remain subject to quotas or reduced duties.
• Trade Role: Israel ranks among the United States’ top 25 trading partners, with bilateral trade anchored in innovation, cybersecurity, and defense technology.

(Source: Office of the U.S. Trade Representative, 2024)

---

Key USIFTA Advantages for U.S. Exporters

1. Extensive Tariff Elimination on Industrial Goods: Duty-free treatment for nearly all U.S. manufactured exports, with exceptions for a few sensitive products.
2. Phased Agricultural Access: Flexible schedules allow reduced tariffs or quotas on selected food and agricultural products.
3. Simplified Customs Procedures: Streamlined documentation requirements and pre-clearance processes for eligible goods.
4. High-Tech Market Alignment: Strong IP protections and standards harmonization support software, biotech, and defense exporters.
5. Research and Innovation Synergy: Joint R&D funding programs and government-to-government partnerships amplify market entry for technology companies.

These provisions create a stable and innovation-friendly ecosystem where U.S. exporters can compete on quality, not just price.

---

Strategic Export Opportunities

Sector	Opportunity	Compliance Note
Semiconductors & Electronics	Israel’s advanced R&D ecosystem drives demand for U.S. components, sensors, and testing systems	Confirm HTS classification and product origin under USIFTA rules
Medical Devices & Life Sciences	Strong growth in biotech and medical innovation sectors	Ensure product registration with Israel’s Ministry of Health
Cybersecurity & Software Services	Expanding defense and private-sector cybersecurity markets favor U.S. collaboration	Verify compliance with Israel’s data protection regulations
Aerospace & Defense	Joint ventures and co-development under bilateral defense agreements	Review export controls under ITAR and EAR
Agricultural Equipment & Technology	Israel’s precision agriculture sector seeks advanced irrigation and sensor technologies	Confirm tariff benefits and phytosanitary standards for ag equipment

---

Rules of Origin and Documentation

To qualify for preferential treatment under USIFTA, U.S. exports must meet specific rules of origin verifying that products are substantially produced or transformed in the United States.

Exporters should:

• Complete a USIFTA Certificate of Origin identifying the U.S. producer and qualifying criteria.
• Maintain supporting documents for at least five years for audit or verification.
• Ensure classification and country of origin align with U.S. Customs and Border Protection (CBP) standards.
• Coordinate with logistics providers familiar with Israel’s Customs Authority to expedite clearances.
• Regularly monitor regulatory updates or product-specific addenda that modify origin thresholds.

---

Emerging Trends and Trade Insights

• Technology Collaboration: Israel’s high concentration of startups and research partnerships opens consistent export opportunities in AI, automation, and semiconductor tooling.
• Digital Trade & Cloud Integration: U.S. cloud providers and cybersecurity firms benefit from Israel’s digital-first economy and enterprise transformation initiatives.
• Renewable Energy Cooperation: Increasing demand for solar, storage, and smart-grid technology aligns with U.S. cleantech strengths.
• Defense & Dual-Use Exports: Bilateral programs like the U.S.–Israel Industrial R&D Foundation (BIRD) continue to drive innovation and defense sector collaboration.
• Healthcare Innovation: Joint research on medical devices and pharmaceutical technology positions U.S. exporters at the center of Israel’s healthtech ecosystem.

---

Why It Matters for Exporters

The U.S.–Israel FTA provides a stable, innovation-oriented trade framework that rewards technology, quality, and compliance excellence. For U.S. exporters, benefits include:

• Zero or reduced tariffs on nearly all industrial exports
• Simplified customs processes with predictable treatment
• Robust IP protection supporting innovation-intensive sectors
• Direct access to a global technology and defense hub

Whether you export advanced hardware, AI software, or medical technology, aligning with USIFTA’s origin and documentation requirements ensures seamless access to a market defined by innovation and strategic partnership.

To streamline FTA compliance, automate HTS validation, and simulate duty savings for your next export, explore Trade Insight AI.

---

Series Note:
This article is part of the Export Snapshot series, highlighting major U.S. Free Trade Agreements and how exporters can leverage AI-driven tools for smarter, compliant global expansion.