UK International Trade Secretary Anne-Marie Trevelyan was in Israel last week to promote post-Brexit bilateral trade and move forward on a new free trade agreement. She told "Globes" that the UK's new independence opens up opportunities for Israeli businesses that did not exist in the past and that she was determined to upgrade bilateral trade relations between the two countries.
The UK is Israel's third largest trading partner after the US and China with combined trade totaling $7.6 billion in 2021, according to Israel's Ministry of Economy. The UK is a convenient market for Israelis to do business in because of its relative geographical proximity, liberal economy and English speaking environment.
Appointed Minister of International Trade last September, Trevelyan is a close ally of Prime Minister Boris Johnson, who is considered very pro-Israel. She said, "Our last two prime ministers (Johnson and Theresa May) have been very clear that they want to see broader and deeper trade relations between Britain and Israel."
At present Israel-UK trade is conducted through a 'temporary' free trade deal that was signed on the eve of Britain's formal departure from the EU and adopted the trade regulations between Britain and Israel when Britain was a member of the EU. Both sides agreed to such an arrangement in order to ensure the smooth transition of trade relations and avoid any customs and excise law obstacles.
Trevelyan said that she was excited to be in Israel on her first visit in order to open the consultations stage with British businesses on a new free trade agreement, which is meant to be more comprehensive and include services as well as goods, with negotiations on the new agreement scheduled to start in the summer.
Trevelyan said, "We plan building a new agreement between the two countries in 2022-2023, which will expand economic relations from the field of goods, which are mainly currently included, into new areas like the services industry - cooperation on the subject of innovation, providing opportunities for companies in the digital sector and also in the environmental sector. There are entirely new business areas that we can promote in a bilateral way.
"Israel and Britain already have significant relations today but the agreement will make it possible for us to use tools that investments and trade can create in order to make the relations even stronger."
In theory the trade agreement for services will provide Israeli companies with access to UK government and public projects as well as encouraging mutual investments.
Trevelyan added, "Therefore, we are now officially launching the public consultation stage and in the coming months, we will listen to British businesses who will tell us where the opportunities are from their point of view in order to build a broader and deeper free trade agreement. When we have heard about the British business perspective, we can complete our public consultation stage and begin the official negotiations in the summer."
Are there specific areas in which you would like to see Israeli companies operating in the UK?
"What is especially important for us is the online and digital sector in which Israel is a world leader. About 70% of the UK economy is in the services sector and we want to see relations growing even more in this sector. We are interested in putting into the free trade agreement activities like cybersecurity, AI, and other digital activities. Britain is a world leader in the services sector and we want Israel together with us in the forefront.
"In addition, it was fantastic to host Prime Minister Naftali Bennett at the climate change conference in Glasgow last November. The campaign to combat climate change is a huge business opportunity. Israel already leads the world in tech solutions and I was thrilled to see Israeli businesses bringing their experience to the table on climate change. We already see many Israeli startups in the UK but I would like to see even more, and of course I want to see British businesses operating in Israel."
The Israelis are also demonstrating enthusiasm about broader Israel-UK trade relations. Trevelyan met with Israel's Minister of Economy Orna Barbivai and following the meeting the Ministry of Economy said, "The two countries share the vision of a revised and up-to-date free trade agreement to strengthen the relations between the two countries, with an emphasis on the industries of the future in the technology, services and life sciences sectors and to create quality jobs both in Britain and Israel."
Another area in which Trevelyan wants to see warmer relations and which has been controversial in Israel in recent months, is natural gas. While Israel announced the temporary freezing of exploration operations for new offshore gas fields, the British Minister of International Trade sees this as an area of future opportunities for cooperation between the two countries. "Natural gas provides Israel the opportunity to move away from coal, and Britain expects to work with Israel on this matter. We have some of the world's most advanced companies, due to our activities in the North Sea over the past 50 years. We hope that this subject will be part of the new free trade agreement."
Published by Globes, Israel business news - en.globes.co.il - on February 6, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.