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International Trade Secretary Anne-Marie Trevelyan has today formally launched negotiations for a new “innovation focused” Free Trade Agreement between Israel and the UK.
An upgraded deal is expected to increase the value of the bilateral trade between the two countries, which is currently worth £5 billion a year, and is also expected to benefit over 6,600 UK businesses who export their goods to Israel.
Launching the talks, the Secretary of State outlined the UK’s ambition to secure a “deal that will play to British strengths, while stimulating innovation and increasing opportunities for small and medium-sized enterprises across the UK. Combining the power of our economies in a revamped trade deal will boost trade, support jobs and help take our economic relationship to the next level”. She said that the current trading relationship between Israel and the UK is “based on an agreement from 1995, before smartphones, the internet, and digitally delivered services transformed the global economy”.
The trade deal is expected to enhance and modernise the existing trade arrangements to include digital products and services, a fast-growing aspect of the Israeli economy which is not covered under current deal.
It is reported that a new updated deal could boost the UK’s service exports to Israel by up to £78 million as well as support jobs and growing high-tech industries by reducing barriers to trade. A modernised deal could also provide greater economic opportunities for exporters across the UK, such as LEVC who run electric black cabs in Coventry and Tomatin Distillery who make whiskey in Scotland.
In an article written for the Jewish News, the Secretary of State explained that it’s “not just an innovative spirit” that unites the two countries, but the UK and Israel “have a common belief in democracy and free markets”. She praised Israel’s “entrepreneurial success” and highlighted the “game-changing… inventions and big ideas” from Israel and the UK which are “improving lives around the world”.
The new Free Trade Agreement will complement the new UK-Israel Bilateral Roadmap which included the joint memorandum of understanding to elevate the UK-Israel relationship to a Strategic Partnership signed by Foreign Secretary Liz Truss and Israeli interim-Prime Minister and Foreign Secretary Yair Lapid in December 2021. At the time Foreign Secretary Truss tweeted the UK and Israel are “like minded democracies” and expressed that they will “work more closely on: Science and tech; Trade, investment and development; Security and cyber”.
