UK and Israel heading for second round of free trade agreement negotiations

The UK government will begin a second round of negotiations with Israel this Spring in the hope of concluding a long-awaited free trade agreement, Jewish News can reveal.

The Department of International Trade confirmed the plan for new talks  to begin with Israel over a lucrative trade deal.

It is understood that officials from both countries had been confident that a deal could be concluded in the first quarter of 2023.

But the election of a new government in Israel meant it was likely that any on-going discussions would be scrutinised again by newly installed officials.

Richard Pater chief executive of BICOM, told Jewish News:”My assessment is that after several months of successful and fruitful negotiations  both sides have a vested interest in advancing bilateral  relations and a free trade agreement in particular.”

A DIT spokesperson added they would not pre-empt the outcome of the negotiations, set to take place in a few months time.

Last July, the UK government confirmed it had started negotiating an ambitious new FTA to strengthen both its and Israel’s economies and “deepen our friendship.”

The existing trading relationship with Israel is worth £5 billion.

A new deal would build on the current UK-Israel Trade and Partnership Agreement, which replicates the scope of existing trade agreements between the EU and Israel.

The trade agreement, which forms the basis of the current trading relationship, was originally signed in 1995, 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 UK’s thriving services and digital sectors.

Israel’s economy has seen its service sector growing by 45% over the last 10 years.

A new FTA would allow the UK to take advantage of this growth, generating opportunities for firms here to export to Israel.