‘Future is bright’ for UK-Israel trade regardless of Brexit

Whether or not Brexit happens on 29 March, the “future is bright” for UK-Israel trade, according to Yariv Becher, the Minister, Head of Economic and Trade Mission to the UK, Embassy of Israel.

Becher, who was speaking at a round table event arranged by Israel Bonds this week, is busy ensuring that British and Israeli businesses are in the right place at the right time to deal with each other.

Only last week – the same time that International Trade Secretary Liam Fox spent three hours in Israel signing a continuation agreement for bilateral trade for the post-Brexit era – Becher brought eight Israeli financial tech (fintech) firms to London to meet UK bankers.

And at a recent Barcelona telecoms conference, executives from 16 Israeli high tech firms had meetings with their counterparts from UK giants, such as BT and TalkTalk.

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The UK-Israel continuation agreement, “which is a copy-and-paste of the current Israel-EU agreement, ensures that whatever happens come 29 March, nothing changes”, said Becher.

“If Britain exits the EU, we have an agreement in place. If it doesn’t, we continue with the current deal. And if there’s a transition period, then the deal comes into effect once that period is over,” he added. “So the future’s bright whatever happens.”

Bilateral trade – which last year hit a record-breaking $10bn – is not only about high-tech or fintech. “It covers everything from tahini to cyber,” said Becher. “In fact, most of the trade is not high-tech or services, but it’s goods and commodities.

“About three-quarters of our exports to the UK are chemicals and pharma. About half of the UK’s exports to Israel are minerals.”

The UK’s Foreign Direct Investment into Israel is also on the rise, and currectly stands at $260bn, and it’s not just venture capital, said Becher.

“Defence, security and aerospace giant BAE invests in Israel as does Johnson Matthey, the chemicals and sustainable technology company,” he said.

Israel’s bilateral trade with the UK has been on an upward trend, said Becher. “In 2016, it was $7.5bn, in 2017 $9.5bn and last year $10bn. This year it’s already heading towards $11bn and I hope the trend will continue.”

At present, he added, “the UK is exporting more to Israel than vice versa – $6.5bn to $3.5bn”.

As an advanced country with an advanced economy, Israel is very attractive to UK business and there is no reluctance on the part of British firms to cooperate with their Israeli counterparts.

“There is more openness to deal with Israeli companies and an openness to work with the government. This is very encouraging,” Becher noted.

Currently, Israel’s annual Gross Domestic Product (GDP) – the value of all the final goods and services produced by a country – is $360bn, with GDP per person currently, sitting at $40,000.

For comparison, the EU’s average per person GDP was, according to the World Bank, $33,723, while the UK’s is $42,514.

“This is not the Israel I grew up in,” said Becher, who doesn’t look a day over 35, which indicates the speed with which Israel has developed into the Start-up and Innovation Nation.

Arnon Perlman, the executive director of Israel Bonds’ International Sales and Operations (Europe and Latin America), said that one of the reasons for Israel’s success was “we do not export goods. Israel doesn’t have heavy industries. We export our attitude.”

Along with that, however, Perlman noted that that 30% of the blades in civilian aircraft jet engines are made in Israel.

“Everyone thinks they are better than you, and we are taught not to respect and to challenge everything. We are not afraid of failure, as long as we learn from it to reach success.”