conomy Minister Eli Cohen and British Secretary of State for International Trade Liam Fox, February 18, 2019.
(photo credit: ALEX PERGAMENT)
Economy Minister Eli Cohen and British Secretary of State for International Trade Liam Fox put pen to paper on a bilateral trade continuity agreement in Tel Aviv on Monday, less than 40 days before the UK is slated to exit the European Union.
The agreement aims to ensure seamless continuity in existing trade between the UK and Israel after March 29, when Britain commences its 21-month transition period culminating in its withdrawal from the 28-member union.
“More important even than the agreement itself is what it says about our future relationship,” said Fox.
“And about the way in which we will be able to cooperate in the future, not just on trade, which has improved enormously in recent years, but also on investments in both directions.”
The deal is based on the existing EU-Israel Association Agreement, through which bilateral trade has been conducted between the countries for almost two decades, and also includes a government procurement access agreement and a conformity assessment agreement.
The latter, Fox said, is of “particular importance to the UK” as Israeli pharmaceutical giant Teva produces one in every six National Health Service prescriptions today, and the agreement provides continuity in the pharmaceutical trade between the two countries.
Britain will no longer benefit from the EU-Israel agreement after Brexit, as will be the case for several dozen other free trade agreements that the EU has negotiated over the last two decades with almost 60 non-EU countries.
“This agreement represents a very positive signal to the business sector,” said Cohen. “It signals continuity and, at the end of the day, it will be the business people who create the relationship between our countries. We invite more companies here to Israel, and Israeli companies to Britain.”
Describing the agreement as “sound springboard for future ambitions,” Fox predicted increased investment in both countries’ tech sectors in the coming years.
“We think there is enormous potential in the relationship to be synergistic in what we do in terms of the tech sector,” he said.
“Of course, we have a huge tech sector in the UK. We had more venture capital and tech come to London in the past year than the whole of France, Germany and Sweden put together. So clearly, with the sort of innovation that comes out of Israel, there’s enormous potential for us to work together for our mutual benefit.”
Britain is Israel’s leading export destination within the EU, with bilateral trade repeatedly breaking records in recent years, reaching $7.2 billion in 2016, $9.1b. in 2017 and approximately $11b. in 2018.
Seeking to increase bilateral trade once again, the countries are currently organizing a major UK-based bilateral trade and investment conference.
Last month, Fox and Cohen announced at the World Economic Forum meeting in Davos, Switzerland that Israel had became the first country to finalize a post-Brexit trade continuity deal with the UK after almost two years of negotiations between the countries.
In order to ensure that transition, a UK-Israel Trade Working Group was established and held its first meeting on March 29, 2017 – the same day that the UK invoked Article 50 of the Treaty on European Union to commence its withdrawal process. Fox and Cohen met three times in the last three months as efforts increased to finalize the deal.
A spokesman for Prime Minister Theresa May said Monday that Britain still wants to reopen the withdrawal agreement it negotiated with the European Union to provide legal assurances over the border between Ireland and UK-controlled Northern Ireland.
“The PM has been seeking to reopen the withdrawal agreement and that remains our position,” the spokesman told reporters.
Reuters contributed to this story.
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