The UK and Israel have strong diplomatic relations. Our trade is built on trust and historic friendship. As the UK embarks on leaving the European Union, we are in a unique position to agree a mutually beneficial trade deal between our two great states.
In March 2017, a new Trade Working Group met to discuss trade and investment relations. That was timely as lawmakers are conscious that our trade relationships are important to the short and long-term health of the state. Prime Ministers Netanyahu and May met that same month and the message was clear: this Trade Working Group is to lay the foundations for a trade deal.
Lord Price, at the time a minister at the Department for International Trade, summarised existing UK-Israel business relations well: “From the cherry tomato to new global calling technology Viber, Israeli inventions and produce have been welcomed by UK consumers for many years.”
Looking beyond cherry tomatoes, consider the trade figures: Ambassador Regev, Israel’s representative to the UK, said earlier this year that bilateral trade has increased from £5.5 billion in 2016 to £6.9 billion in the following year; an increase of some 25 per cent.
Those figures are pleasing, and Eli Cohen, Israeli Minister of Economy, said in 2017 that the UK is “Israel’s first export destination in Europe” and further remarked that, in the UK, Israel can see the “high importance in keeping and enhancing our trade relations when the UK ceases to be a member of the European Union.”
Israel has a well-deserved status as a technological powerhouse with a strong agricultural industry and an ever-burgeoning defence sector, among other innovative stalwarts. In the UK, we have strong production and design sectors, access to capital and renowned business growth, and our own leading science and technology companies and arrangements.
EU trade policy is viewed, in some quarters, as protectionist toward member states’ producers, particularly in the agriculture sector. Faried al-Said Ahmed, a farmer operating near the Israel-Syria border, claimed as much in 2017 when speaking to The Guardian. He spoke of a desire to be able to export goods to the UK and said that, “if it were possible to sell in England then, my God, yes, we would.”
In late 2017, the British Israel Communications and Research Centre think tank released a report which noted “potential synergies” between Israeli innovation and assorted UK business sectors. A figure made available by BICOM, which is of particular interest, is that in the year after the vote to leave the EU, Israeli companies establishing themselves in the UK increased by 28 per cent.
What does that tell us? My reading of the increase is that the UK remains to be viewed as a leading place to live, work and run business operations in. A truly global UK must be able to attract investment from all corners of the globe, and Israel is setting an example.
In 2016, the largest UK-Israel trade deal in history was agreed upon: for Rolls-Royce to supply engines for the El Al airline, at a cost of one billion pounds. The competition was fierce, the other party was a US manufacturer backed by the State Department; however, the UK and Rolls-Royce emerged victorious. David Maimon, President and CEO of El Al, spoke of “a natural synergy” when commenting on the deal.
Again, the word synergy crops up. We, the UK and Israel, do have synergy – let us put this to good use.
London continues to be recognised as the worldwide capital in Fintech and financial services. That clarifies upon the message coming from the UK Government that leaving the EU shall not stand to alter the UK’s leading status as a global hub for finance and investment.
Working with our allies, we can nurture and harness long-term growth. With that in mind, I am deeply positive for our future relationship with Israel and further encouraged to continue our work with Israeli politicians and business persons.