A forthcoming trade agreement between the UK and Israel, which aims to create a modernised commercial relationship between two of the world’s service superpowers, is expected to be beneficial for UK tech companies and service providers.
International Trade Secretary Anne-Marie Trevelyan will commence discussions between the United Kingdom and Israel for a new, innovation-focused Free Trade Agreement today [20 July] (FTA).
Israel’s economy is among the fastest growing in the world, and it is anticipated that demand for digital goods and services would increase quickly in the country. Since there are currently no particular service-related clauses in the UK’s bilateral FTA with Israel, there is a significant potential to improve the arrangement.
In addition, by lowering trade barriers, the UK can increase its services exports to Israel by up to £78 million, supporting jobs and expanding high-tech industries.
An improved new agreement would increase a £5 billion annual trade partnership. By lowering trade obstacles, it may help 6,600 UK companies, including 5,600 small and medium-sized businesses that will employ more than 1.7 million people in 2020 and export goods to Israel.
Anne-Marie Trevelyan, International Trade Secretary, said:
“The UK and Israel are both modern, hi-tech services superpowers, but our current trading relationship is based on an agreement from 1995, before smartphones, the internet, and digitally delivered services transformed the global economy.
“We want a deal that will play to British strengths, while stimulating innovation and increasing opportunities for small and medium-sized enterprises across the UK. Combining the power of our economies in a revamped trade deal will boost trade, support jobs and help take our economic relationship to the next level.”
To begin the negotiations in London, the Secretary of State will meet with Tzipi Hotovely, Israel’s ambassador to the UK.
The renowned electric black cabs made by LEVC in Coventry, the Tomatin Distillery in Scotland, and Concrete Canvas in Wales might all benefit economically from a creative new modernised deal.
Sally Jones, Trade Strategy Partner for EY, said:
“EY welcomes the intention to upgrade the Free Trade Agreement between the UK and Israel. This is an opportunity to put services, digital technology and innovation at the heart of the UK and Israel’s already-strong trading relationship. Both the UK and Israel are known for their vibrant tech and fintech sectors, which will both benefit from this new deal.
“The UK’s world leading professional and business services sector is an unrivalled ecosystem which boosts competitiveness and facilitates international trade. With the opening-up of new trade and investment opportunities, businesses need to be looking at their trade strategies now to be able to seize these opportunities and drive economic prosperity.”
Amanda Tickel, Head of Tax and Trade Policy for Deloitte UK, said:
“We welcome negotiations between the UK and Israel on an enhanced FTA, which could take our bilateral trade and investment relationship to a new level.
“Both the UK and Israel are services-led economies with highly successful tech sectors, yet the existing terms of trade contain only limited provisions in these areas. This negotiation represents an exciting opportunity for UK services exporters, making it easier to trade across borders, to travel and work in each economy and support our digital innovators.”
Daniel Moczulski, UK Managing Director at eToro, said:
“We are immensely proud of the journey that eToro has been on over the past 15 years, from an ambitious start-up in Tel Aviv to a thriving global brand and the world leading social investment network, with over 27 million registered users in more than 100 countries. A crucial part of this journey was eToro’s arrival in the UK, a market which has always encouraged innovation in the financial sector.
“The UK market has become incredibly important to eToro’s business, and we are lucky to have a very talented team in London serving a large number of UK retail investors – we welcome the launch of UK-Israel trade talks to create more opportunities for innovators in both the UK and Israel.”