The Israeli government, represented by the Minister of Industry and Trade Eliahu Yishai, on 18 December 2007 signed a free trade agreement with MERCOSUR, the trade bloc that comprises Argentina, Brazil, Paraguay and Uruguay, in Montevideo - following negotiations which began in November 2005. With the signing of the agreement, the State of Israel became the first non-Latin American country to conclude a deal of this kind with MERCOSUR.
On the eve of the signing of the agreement, Israeli Prime Minister Ehud Olmert said the trade deal with MERCOSUR will be a bridge between his country and Latin America and will work as "the basis for establishing more and better connections" at an international level.
Representing the South American trade block were Foreign Ministers Jorge Taiana of Argentina, Celso Amorim of Brazil, Ruben Ramírez Lezcano of Paraguay, and Reinaldo Gargano of Uruguay, all of whom signed the agreement. Uruguayan President Tabaré Vázquez also signed the agreement, as acting President of MERCOSUR.
According to the agreement, during the first four years, the customs duties on exports from Israel to the MERCOSUR member countries will be 40 per cent lower and will be removed after ten years in relation to industrial and agricultural products. Israel's global trade volume with the four MERCOSUR member countries amounts to 1.1 billion dollars per year. 86 per cent of the exports from the four member countries to Israel are already exempt from customs duties, while 36 per cent of the exports from Israel enjoy some kind of benefit.
Israeli Ambassador to Argentina Rafael Eldad said the deal "should open the door to a qualitative and quantitative step" forward in the relationship between Israel and MERCOSUR, noting that the free trade agreement should bring considerable benefits for MERCOSUR in terms of technology and science.