Free Trade in Services: The Case of Israel and the EU

Services have become the most important economic sector in the global economy, and their significance to both economic performance and growth has been emphasized. Various researches point out the substantial benefits that can be derived from the liberalization of services. Notwithstanding, until recently services did not receive the same attention as goods. Many impediments to international trade in services still exist, and the potential benefits that can be reaped from the liberalization of services are far from being recognized. This work explores the feasibility and possible advantages and disadvantages of a Free Trade Agreement in services between Israel and the EU. The Services sector is the main sector in the economies of both sides. However, and in spite of their extensive trade relations, the various trade agreements signed between the dyad cover only trade in goods. This work presents the main arguments supporting such an agreement, as well as possible counter arguments. In addition, some of the key areas of potential benefits are stressed.