Trade Secretary Kemi Badenoch pictured meeting with Israel's Economy Minister Nir Barkat (Photo: Department for International Trade)
UK officials are emphasising "quality over speed" in the negotiations, but the JC understands that both sides are very positive about the prospect of agreeing an expanded trade deal.
Badenoch has said Britain intends to strengthen its trade relationship with Israel across a range of high growth sectors, including financial services, digital, healthcare and infrastructure.
On Sunday, she met with Israel’s Economy Minister, Nir Barkat, in Jerusalem for bilateral talks ahead of the next round of negotiations between the two countries.
Following their discussions she described a “shared ambition to negotiate a modern, innovative services free trade agreement to mutually benefit both of our economies,” adding that “services will be at the heart of this deal.”
There is already a trade deal between the UK and Israel as part of the EU continuity programme. The EU signed a deal with Israel in 1995, but much has changed in the economies of both countries and around the world since then, especially with the growth of smartphones, e-commerce and the widespread use of the Internet. Israel’s service industry has also boomed in that time, growing around 5 or 6 per cent in the last decade.
Badenoch also used the trip to meet with local businesses to understand their needs ahead of the next round of negotiations (Photo: Department for International Trade)
Ninety-nine per cent of goods by value already travels in both directions between Israel and the UK tariff free, meaning any future trade deal is likely to be focused on improving services and procurement, which were not dealt with in the EU agreement.
Following the bilateral talks, Badenoch said: “An agreement with Israel will build on an already strong trading relationship, worth £7 billion in 2022. We agreed to speak again ahead of the next negotiation round later this year.”
Israel's Minister of Economy and Industry Nir Barkat called Badenoch “a true friend of the state of Israel” and said that they had been working “very creatively together.”
He added that “the agreement being formed with Britain is expected to be the largest, most comprehensive and most modern for the State of Israel. Striving for an updated agreement is in the common interest of both economies, in order to enable the full potential for business cooperation between Israel and Britain.”
The United Kingdom is Israel's largest export destination in Europe and is the world's fourth largest trading partner in exports and imports after the USA, China and Germany.
Badenoch spoke at an International Women's Day event in Tel Aviv (Photo: Department for International Trade)
As well as meeting with her Israel counterpart, Badenoch is using the trip to meet with local businesses to understand their needs in advance of the next round of negotiations, hoping to lay the groundwork for significant progress to be made.
On Sunday she announced a new programme for women entrepreneurs to export globally at an event held in Tel Aviv ahead of International Women’s Day.
Jointly hosted by Yazamiyot, an Israeli female entrepreneurs community, and the British Embassy’s Women Leading Innovation Network, the event included a pitching contest to find the most promising female founder of the year. The best three founders were selected to travel to London where they will attend Calcalist’s “Mind the Tech” conference to present their start-ups at a UK Israel Tech Hub event.
Addressing the crowd of female entrepreneurs, Badenoch said that the UK Government had launched an industry-led taskforce last year “to increase the number of women-led high-growth businesses” adding that the UK government has set a target to increase the number of female entrepreneurs by half by 2030.
Kemi Badenoch addressing female entrepreneurs (Photo: Department for International Trade)
On Sunday evening Badenoch joined UK Ambassador to Israel, Neil Wigan, for a business reception at his residence. She met with a range of businesses which already have strong trading links with the UK.
Today, Badenoch will visit Teva Pharmaceutical Industries, the Israeli multinational pharmaceutical company that operates in 60 countries and employs 43,000 workers. Teva accounts for one in five generic drugs supplied by the NHS in the UK. Teva UK employs more than 1,200 people at four sites in the Britain – West Yorkshire, Harlow, Eastbourne and Runcorn – and is the largest manufacturer of generics in the UK. The pharma giant is the largest supplier by volume to the NHS.
She will also meet with Trigo, an AI and computer vision start-up, and visit the Israeli innovation hub Startup Nation Central, to meet a range of innovation executives and members of Israel’s Ministries of Energy and Defence, for a discussion on innovation diplomacy and business cooperation.
