Israel and China agreed on Tuesday to begin negotiations for a bilateral free trade agreement, Prime Minister Benjamin Netanyahu and Chinese Vice Premier Liu Yandong announced in a joint press conference in Jerusalem.
A free-trade agreement with the world’s second-largest economy could have major implications for Israeli industry with the government estimating it could double trade between the two nations from today’s roughly $9 billion, boost technological cooperation and open the path for more investments.
“I was delighted to hear today from Vice Premier Liu that China is prepared to begin free-trade agreement negotiations with Israel. This is a momentous development and we are ready to do so right away,” Netanyahu said, specifying that healthcare, remote education, agriculture, marine agriculture and IT are fields ripe for development.
“In every field of human endeavor, the cooperation between Israel and China can yield enormous results. And we believe that Israel can be a perfect partner,” he added.
The talks will focus on lifting barriers to trade such as tariffs and coordinating regulatory standards.
Liu said China was pleased to begin talks, and that Israel and China were heading toward major joint projects, adding that Israel is known throughout the world for its innovation. She said that over the next five years China will work to upgrade its roads, communications and nuclear infrastructure, and expressed hope that more Israeli investors would come to invest in her country.
Netanyahu first broached the idea of an FTA with China in May 2013 when he visited there, and it was promoted further in August of that year when then-economy minister Naftali Bennett visited the country and kicked off a feasibility study for free-trade talks.
Asia’s place as a trade partner has grown to rival that of the United States, which remains behind Europe in measures of regional trade.
Following recent scuffles with Europe over labeling products produced beyond the Green Line, Bennett has called for diversifying Israel’s trade partnerships.
But a deal could yet cause a backlash.
In the US, a fierce battle is underway over approving a trade deal with the Trans-Pacific Partnership – a slew of Pacific nations.
In the presidential primary elections, the tides of public opinion have turned away from free trade as an economic booster to that of a job-killer.
Israeli industrial and labor interests could well come to oppose measures that would make it easier to outsource manufacturing.
Liu, one of four Chinese vice premiers and the highest ranking woman in China, is leading an 80-person strong delegation taking part in the second annual Israel-China Committee for Cooperation in Innovation.
Israel and China signed a number of cooperation agreements on Tuesday, including one instituting a 10-year multi-visit visa that is expected to greatly facilitate both business and tourist travel between the two countries.
Deputy Foreign Minister Tzipi Hotovely said at the meeting that China is Israel’s third largest trading partner, and that enormous opportunities will open as a result of the negotiations over an FTA and the new visa regiment.
“I am sure that the coming years will be years during which the relations between Israel and China will take a significant leap forward,” she said.
Earlier in the day, Liu met President Reuven Rivlin and said, “China takes Israel very seriously.”
Liu, who was here in 2014, said she was deeply impressed during that visit by Israel’s social and economic achievements and the goodwill shown toward China by Israelis.
She returned this time – for what she described as a “very important mission” – with a very warm feeling toward Israel.
Liu recalled that China provided a haven for Jews fleeing the Nazis during the Holocaust and also mentioned Jewish doctors in China who helped treat the wounded in the Sino-Japanese War.
Both China and the Jews were persecuted by fascist forces and helped each other during those dark days, she said.