An advanced free trade agreement with Israel, updated to be fit for the 21st century, is an opportunity only made possible for the UK through our status as a newly independent trading nation.
As long-time allies, our trading relationship – totalling nearly £5 billion – is already strong. The UK is already Israel’s third largest trading partner with £2.7 billion of British exports heading to Israel in 2020, while around 500 Israeli firms currently operate here.
Now we are taking steps to increase trade and investment by overhauling an agreement inherited from the EU which focuses primarily on goods trade, to the detriment of our world-leading services sectors. Service sectors account for 70% of both economies, but only 35% of our bilateral trade.I want to correct this imbalance and secure an ambitious new agreement that plays to our strengths as two innovative, tech-driven nations.
Last week, I visited Israel to meet with my counterpart Orna Barbivai. Our talks reflected our shared ambition as innovation nations and science superpowers, and illustrated the ways that we can complement each other. When I visited Tel Aviv, I witnessed the construction of the new Tel Aviv metro – the most significant infrastructure project currently planned in Israel, valued at $50 billion. Designing, constructing and supplying underground railways is something UK companies have long-standing experience of, and it’s an obvious example of an area where we should and could be collaborating.
The next step on a trade deal is for the Government to ask businesses and the public here in the UK what they would like to see included in the deal and establish what holds back businesses from increasing trade with Israel. The Call for Input was published last Wednesday and will run for eight weeks, helping us draw up comprehensive negotiating objectives that benefit the whole of the UK.
Then our team of world-class negotiators will be ready to start talks. A deal with Israel is expected to open new opportunities across the services sector from digital, financial and professional services, to life sciences, advanced manufacturing, and high-tech innovation. Israel will be at the front of innovation with us, working together to use digital thinking to strip away layers of bureaucracy and bring down costs for families in every region and nation.
The UK-Israel Innovation Summit in spring will shine a light on our shared culture of entrepreneurship and creative solutions to the world’s toughest questions. It will bring together investors and businesses, and showcase leaders in AI, tech and innovation. The Prime Minister and Israeli Prime Minister will attend alongside trade delegations, showing our commitment to a stronger and deeper trade and investment relationship.
Driving foreign investment will create thousands of high-skilled, well-paid jobs in high-value sectors all over the country. The Innovation Summit will follow in the footsteps of our Global Investment Summit last year where we brought in £9.7 billion in investment, creating 30,000 jobs.
Supporting investment and exports across the UK through new and progressive trade deals with nations like Israel is a cornerstone of my trade policy goals.
We know that Britain has untapped potential to export more – only 1 in 10 businesses sell overseas. The free trade agreements we’re striking as an independent trading nation are opening the door to opportunity for businesses. £766 billion worth of trade deals with 70 countries plus the EU is only the start for my Department.
This is Global Britain in action, broadening our economic horizons and forging stronger partnerships with key allies. As two world-leading tech and services nations, closer trade and investment ties with Israel will create economic opportunities we simply could not access before. UK businesses, consumers and families are set to reap the rewards.