The UK government today announced that it is suspending talks with Israel over a free trade agreement until further notice. The action by the British government has been taken following Israel’s latest military offensive in Gaza. The Israeli ambassador to the UK Tzipi Hotovely has been summoned to the British Foreign Office to be told of the suspension. “The actions of the Netanyahu government have made these actions necessary,” the British Foreign Office said. The statement added that this is the first time that trade talks have been suspended for humanitarian reasons.
At the same time British prime minister Keir Starmer has intensified his criticism of Israel, telling the UK media that the suffering of Gaza’s children is “utterly intolerable.” The UK government has also announced new sanctions on several settlers, including Danielle Weiss and the construction company LIBI, which the British Foreign Office says is involved in construction in the settlements. All of the individuals and companies sanctioned also appeared on similar US and EU sanctions lists.
The need for a free trade agreement stems from the UK’s exit from the EU in January 2021. The countries have a basic trade agreement that came into effect when the UK left the EU, but over the past three years there have been talks between the countries to forge a new and comprehensive agreement. The discussions have included visits by British government figures to Israel. The UK exports weapons to Israel, and recently announced the suspension of around 30 export licenses out of around 350 components to Israel, “Out of concern that they will be used as part of activities that violate international law.” However, the UK has refused to suspend shipments of spare parts for F-35 aircraft.
Economic blow to Israel
The suspension of the talks is an economic blow to Israel. In the past, Israel’s Minister of Economy and Industry Nir Barkat said, “The agreement being formed with the UK is expected to be the largest, most comprehensive of the State of Israel and is of common interest to both economies.” The UK is Israel’s fourth largest trading partner in the world, in exports and imports of goods and services, after the US, China and EU.
The volume of trade in goods and services in 2023 was about $9 billion, according to the Ministry of Economy website. So far, more than six rounds of talks have taken place within the framework of the upgrade of the existing agreement, with the Conservative governments that ruled in the past, and plans have been announced to hold talks with the current Labor government. A new trade agreement would pave the way for increasing Israeli exports to the UK, especially in the field of services.
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In response Israel’s Ministry of Foreign Affairs said: “Even before today’s announcement – the issue (the trade agreement) was not advanced at all by the current government in the UK. Beyond that, the agreement is for the mutual benefit of both countries. If, due to anti-Israel obsession and internal political considerations, the British government is willing to harm the British economy, that is its decision.
“The sanctions against the settlers in Judea and Samaria are puzzling, unjustified and especially regrettable when they are taken when Israel is mourning another victim of Palestinian terrorism – the late Tzeela Gez, who was murdered on her way to the delivery room, and the doctors are still fighting for the life of her baby in the hospital.
“The British Mandate ended exactly 77 years ago. External pressures will not divert Israel from its path in its struggle for its existence and security against enemies working to destroy it.”
Published by Globes, Israel business news – en.globes.co.il – on May 20, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
