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The agreement between Russia and the PA to the detriment of the Israeli export of agricultural products. Review

This week comes into force the agreement between Trading-industrial chamber of Russia and the Federation of Commerce and industry and chambers of agriculture of Palestine, signed during the visit of Prime Minister Dmitry Medvedev to Jericho, where he held talks with Palestinian authority Chairman Mahmoud Abbas.

The agreement on 11 November was signed by the President of the RF CCI Sergei Katyrin and the head of FTPS PA Khalid of RISC.

After Medvedev’s visit to Israel and the PA on Russian television it was noted that, in accordance with the signed agreement, the Palestinian agricultural products will be exempted from customs duties.

CCI does not publish the text of the agreement. Official information about the release of Palestinian products from customs duties has not yet been confirmed.

But in March 2016, Minister of labor and social development Minister Maxim Topilin reported that the Eurasian economic Union releases the exports of Palestinian products from customs duties in the territory of integration associations (Russia, Belarus, Kazakhstan, Kyrgyzstan, Armenia). This became possible for two reasons: almost all the EEU countries recognize an independent state of Palestine (except Armenia), in the spring of this year, Palestine was enabled by the leadership of the Union in the list of least developed countries, which automatically exempts from customs duties for many goods. According to reports, now this exemption will be extended to agricultural products.

Russian-Palestinian agreement strikes at the interests of the Israeli agricultural producers who are exporting vegetables, fruits and herbs in Russia. In recent years, from Israel to Russia delivered agricultural products worth 650-700 million dollars per year (export of goods from the PA in Russia amounted to just $ 3 million per year).

The Chairman of the Association of producers of fresh herbs in Israel, Anna Moeller said the editorial that is only the export of fresh greens to Russia amounted to $ 16 million per year. Cooperation with Russian customers, lasted for 11 years, deliveries were carried out year-round on a daily basis (except Shabbat). According to her, in great demand in Russia used red Basil and arugula. However, about 20% of all grown in Israel fresh herbs were exported to Russia.

In the new situation, in the event of cancellation in Russia and other countries of the EEU customs duties for agricultural products from the Palestinian authority, many Israeli manufacturers will be forced to abandon exports to Russia, as they will not be able to compete with the Palestinian producers at prices. In Israel, more expensive water and labor, and the abolition of duties for direct competitors will make it impossible to export many kinds of Israeli agricultural products in the Russian Federation.

Anna Moeller notes that cooperation between Israel and Russia in the field of agriculture lies not only in supplying products but also in the implementation in Russia of Israeli technologies in the transmission of knowledge about the peculiarities of different crops. But in terms of duty-free supplies of Russian Palestinian agricultural exports, apparently, will be considerably reduced.

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The agreement between Russia and the PA to the detriment of the Israeli export of agricultural products. Review 14.11.2016

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