UK and Israel negotiating trade deal worth $6B annually

International economy has changed since the current Israeli-British free trade agreement was reached in 1995.

By Gil Tanenbaum, TPS

The British Secretary of State for Trade Anne Marie Trevelyan Wednesday hosted Israel’s ambassador to the UK Tzipi Hotovely for the launch of negotiations for a new free trade agreement between their two nations. The agreement being discussed aims to encourage bilateral trade worth more than 20 billion shekels ($5.8 billion) annually.

Secretary Trevelyan declared that Britain and Israel are “superpowers in the high-tech services sector.”

She noted that current trade relations are based on a 1995 free trade agreement (FTA) made before the world of smartphones, the Internet, and digital services that have since changed the face of the global economy.

“We are interested in an agreement that will build on the UK’s strengths, encourage innovation and expand business opportunities across the country,” said Trevelyan. “A combination of forces between our two economies through the renewal of a trade agreement will encourage trade, support job creation, and take our economic relationship a significant step forward.”

And in a press release, the British government explained that the UK’s existing bilateral FTA with Israel contains no specific provisions on services, creating a huge opportunity to enhance the agreement.

This, it added, includes boosting UK services exports to Israel by up to £78 million ($94 million) from insurance to computer and technology services, supporting jobs and growing high-tech industries by reducing barriers to trade.

Read  WATCH: What prevents peace between Israel and the Palestinians?

The British also said that a new upgraded deal would expand a trading relationship already worth £5 billion ($6 billion) a year and could also benefit 6,600 UK businesses, including 5,600 small and medium-sized enterprises, employing over 1.7 million people in 2020, who are exporting their goods to Israel, by reducing trade barriers.

Israel’s Ambassador to the United Kingdom Tzipi Hotovely said, “The economies of Israel and the United Kingdom complement each other in many areas. A modern free trade agreement will open up new channels for cooperation in R&D, innovation and investment, and strengthen the two [nations’] economies.”

Hotovely added that she was very pleased that the negotiations for free trade between Israel and the UK were begun on Wednesday.

She said that the negotiations are, “based on the strong cooperation between the two countries” and that she looks forward to the establishment of a new free trade agreement in the near future.

She also tweeted her appreciation to the British saying, “Thank you, Secretary of State, for launching our negotiations on an exciting new Free Trade Agreement between the UK & Israel. I look forward to us delivering an innovation-focused agreement that strengthens our collaboration in innovation & investment.”