The UK is targeting Israel’s booming services sector in trade talks launched yesterday (20 July), building on the existing £5bn trading relationship between the countries.

Israel’s services sector has grown by more than 50% in the past 10 years, and the UK government expects a new agreement to boost services exports ranging from insurance to computer and technology services by £78m annually.

New roadmap

The Independent reports that trade negotiations followed the signing of a memorandum of understanding in November 2021, committing both countries to developing a new “bilateral roadmap” covering cooperation in areas including diplomacy, trade, defence and development.

International trade secretary Anne-Marie Trevelyan met Israel’s ambassador to the UK Tzipi Hotovely to launch the talks in London, tweeted the trade department.

Tech superpowers

“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,” she said in a statement.

A revamped deal will seek to “turbocharge services, innovation, cyber security, fintech and wider financial services,” the MP for Berwick-upon-Tweed added.

Benefits

The new agreement is expected to benefit thousands of businesses, including electric car manufacturers in England, Scottish whisky producers and Welsh construction suppliers, reports the Express.

Potential business opportunities include procurement contracts for the £34bn Tel Aviv Metro project and expanding on the Leeds-Israel Innovation Healthtech Gateway that has already seen the Leeds Teaching Hospitals NHS Trust partner with Israeli health technology firms.

Sally Jones, EY trade strategy partner, said: “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.”

Service sector boost

Chancellor of the Exchequer Nadhim Zahawi used part of his speech at the annual Mansion House bankers’ dinner to set out his plan to “deliver an open, green, technologically advanced and competitive financial services sector”, tweeted the Treasury.

Zahawi’s speech announced that he will “repeal hundreds of pieces of retained EU law” post-Brexit and replace them with “a coherent and agile approach to financial regulation that is right for us” in a move to boost the services industry.

City AM reports that the government is publishing its long-awaited Financial Services and Markets Bill, which includes plans to ease the EU’s Solvency II directive and unleash tens of billions more private sector investment.