Israel’s reciprocal procurement rights extended until 2008

Israel succeeded last week to extend its right to demand 28% reciprocal procurement through 2008. Ministry of Industry and Trade officials said last week that Israel's original agreement concerning reciprocal procurement with the World Trade Organization (WTO), was due to expire at the end of 2005.
 
Israel joined the WTO government reciprocal procurement agreement in 1994. Upon entry, Israel was given the right to require foreign companies winning tenders to procure civilian work and services from Israeli industry.
 
Reciprocal procurement was set for the first five years at 35% of the value of the tender, and 30% for the following five years. The reciprocal procurement requirement in Israel applies to tenders issued by Israel Electric Corporation, Israel Government Vehicle Administration, Israel Railways, Israel Ports Authority, Israel Government Procurement Administration, Israel Government Vehicle Administration and gas & oil imports.
 
The WTO government reciprocal procurement agreement covers 36 members of the 140 WTO members. The reciprocal agreement applies only to civilian procurement by governments. Under the reciprocal procurement agreement, none of the 36 signatories is entitled to prefer its own manufacturers. Each party must open its tenders to all the countries that have signed the agreement, without any restrictions or conditions.
 
Mr. Ehud Olmert minister of industry and trade said following the signing of the new agreement that $200 million a year in reciprocal procurement could have been lost if the 36 signatories did not agree to extend the agreement through to 2008.