Bennett visiting China takes first step toward FTA

By
July 8, 2013 23:54

Economy and Trade Minister announces agreement of Sino-Israeli study to boost process of establishing Free Trade Agreement.

2 minute read.



Economics and Trade Minister Naftali Bennett arriving for cabinet meeting, April 28, 2013.

Naftali Bennett at cabinet meeting 370. (photo credit: Alex Kolomoisky/Pool/Yediot Aharonot)

On his first official visit to China as Economy and Trade Minister, Naftali Bennett on Monday announced that the two nations had agreed to conduct a feasibility study. This being the first step in the process of establishing a Free Trade Agreement.

The study, which follows internal surveys concluding that an FTA would expand bilateral trade and economic cooperation, was set to be completed within a year, and to serve as the basis of negotiations.

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“The expectation is that an agreement will substantially grow the level of trade and more small and medium Israeli companies will be integrated into bilateral economic cooperation with China,” Bennett said.

Trade between the two countries currently stands at around $8 billion.

As part of the five-day visit, Bennett met with China’s National Development and Reform Commission, the body that broadly plans the Chinese economy, and discussed the role Israeli companies can play in China’s economic future.

Zvika Shalgo, chairman of the Israeli Chamber of Commerce in Shanghai and CEO of the PTL Group, said that getting a foothold into the Chinese market is crucial for Israeli companies.

“The Chinese today are looking for anything related to innovation and technology,” he said.

Yet, despite the fact that Israel produces both in abundance, there are major blocks preventing them from breaking in – few of which would be addressed by an FTA.

“The problem in Israel is that people have no idea about the [Chinese] market, they’re not exposed to the market and they have no platform for learning it,” he said. “Israelis have to take this issue into account. They’re always looking West, not East.”

Given the sheer size and growth of the Chinese market, he said, companies that are not looking toward China are making a strategic mistake. Just getting a manager on the ground or opening a small R&D center is a smart way to learn the market, he said, even if it’s not immediately profitable.

“One of the best ways to learn that is to just start selling there,” he said.

Doing so could help them find a sizable market for products with limited value elsewhere, and get a heads-up on the competing companies that may not be so quick to adapt when they at last discover the Chinese market.

Shalgo’s company, the PTL group, helps Israeli companies make those first steps, and has already worked with companies such as Matrix and John Bryce, helping them get a foot in the door.

As for the government’s role, Shalgo said Israel could increase its trade tremendously just by making a concerted marketing effort.

“As someone who was working outside Israel for many years and promoting companies, the lack of Israeli strategy in marketing is sad to see. Other small countries in the world are pretty good at doing this,” he said.

Bennett’s trip, he continued, is a hopeful sign that such steps are coming.


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