Israel Trade Negotiation

Wednesday 20th July 2022 Written Statements

[The Secretary of State for International Trade (Anne-Marie Trevelyan)]

On Wednesday 20 July 2022, the Department for International Trade launched negotiations for a new, upgraded free trade agreement with Israel.

In line with our commitments to scrutiny and transparency, the Department for International Trade has published, and placed in the Libraries of both Houses, more information on these negotiations. This includes:

The United Kingdom’s strategic case for a UK-Israel free trade agreement (FTA)

Our objectives for the negotiations

A summary of the United Kingdom’s public consultation on trade with Israel

A scoping assessment, providing a preliminary economic assessment of the impact of the agreement.

The United Kingdom’s negotiating objectives for the upgraded agreement, published today, were informed by our call for input, which requested views from consumers, businesses, and other interested stakeholders across the United Kingdom on their priorities for enhancing our existing trading relationship with Israel.

These negotiations follow our signing of the UK-Israel trade and partnership agreement on 18 February 2019.

A new and enhanced trade agreement with Israel is a key part of the United Kingdom’s strategy to secure advanced modern agreements with new international partners, and upgrade existing continuity agreements in order to better suit the UK economy.

Israel is an important trading partner for the United Kingdom, with trade worth £5 billion in 2021 despite the disruptions of the coronavirus pandemic to global trade. As two of the most innovative and dynamic economies in the world—both in the top 15 of the global innovation index—we know that the opportunities of the future will come from sectors in which we both excel, such as technology, research and development, digital and data.

Our existing agreement, which forms the basis of our current trading relationship, is outdated and not designed for a digital age. Originally signed in 1995 between Israel and the EU, it was developed before smartphones, artificial intelligence and the internet transformed our economies. While it allows tariff-free trade on 99% of UK goods exports by value, it currently contains scant provision for the United Kingdom’s thriving services sector. We intend to change this by putting services at the heart of a modern new agreement, which better benefits the UK economy. Upgrading our trade deal with Israel will help unlock a stronger, more advanced partnership. A new agreement could make it cheaper and easier for innovative UK services and tech companies to trade with Israel, benefiting sectors including finance, accountancy and legal. The new deal will play to our strengths, reflecting the realities of trading in the 21st century and allowing us to take advantage of future innovations.

Around 6,600 businesses from all four corners of the United Kingdom exported their goods to Israel in 2020. Of these firms, 5,600 were small and medium-sized enterprises (SMEs). The United Kingdom’s SMEs could be amongst the biggest winners from a new agreement with Israel, as we seek to make it easier to do business and focus on trade barriers that may have deterred them from previously entering this exciting marketplace.

The Government are determined that any agreement must work for consumers, producers, investors, and businesses alike. We remain committed to upholding our high environmental, labour, public health, food safety and animal welfare standards, alongside protecting the national health service.

The Government will continue to update and engage with key stakeholders, including Parliament and the devolved Administrations, throughout our negotiations with Israel.

[HCWS247]