Jerusalem Post Diplomatic Conference 2016
Speech by Ambassador of the European Union to the State of Israel, Lars Faaborg-Andersen
Honorable Colleagues and distinguished guests, it is a great pleasure for me to be with you here today and to open the economic panel of this conference.
Let me start by saying that the EU and Israel might have some disagreements on this or that political issue and just like among friends or in the family every now and then we tend to have debates, I would even say emotionally charged arguments about them.
But this should not overshadow the deep and close relations we have developed over the decades on economic and trade matters. Cooperation has been growing persistently despite turbulences in the world economy, and regular "events" in this region and also from time to time events in Europe, yet our economies have grown closer with every passing year.
And when I say "our economies" I mean of course the increasing cooperation between Israel and the 28 EU Member States but I also mean an equally strong cooperation between Israel and the EU level that is a significantly increasing approximation between our regulatory environments.
These are very close ties which our relative geographic proximity only reinforces.
I am sure you are aware of the web of agreements signed between the EU and Israel during our decades long cooperation under the umbrella of the overarching Association Agreement which was signed 21 years ago this year. These agreements, among others, cover trade, agriculture, research and development and civil aviation to name just a few.
So it is neither an accident nor a surprise that while Israel seems intent on strengthening its relations with other markets such as Asia, Africa and South America, its economic relations with the EU remain consistently strong and stable.
Let me just mention a few figures. Over the past 20 years, trade between the EU and Israel has more than doubled from €14 billion to more than €30 billion. Imports from Israel have increased by 280% and exports to Israel by 175%.
The EU is Israel's largest trade partner with over 40% of Israeli imports coming from EU countries and more than third of Israeli exports aimed at the EU market.
In order to put this into a wider perspective, let me quote the recent report by the Israeli Export Institute: in the first half of 2016 Israel exported exactly the same amount of goods to France and Italy as to China. Similarly it is worth noting that over the same period 27% of Israel's exports went to Asia, Africa and Latin-America combined while the EU's share over the same period was 32%.
And we are proud of that. This is a solid basis to build on.
Shifting from quantity to the quality, let me add that Israel's trade with the EU is highly diversified, covering a wide range of products. The diversity and maturity of the structure of our bilateral trade is unparalleled in any other country in the region. This implies in practical terms that both sides export high value added and cutting edge products, not only raw material or basic agricultural products.
And the same holds true for sharing best practices as here again our relationship is very balanced. In some areas we can learn from your experiences and in others Israel may profit from our know-how.
A good example of Israeli excellence is the star-up/innovation/entrepreneurship areas where amazing developments have taken place in the past almost two decades.
Israel has acquired a leading global position in entrepreneurship and innovation producing extraordinary results in sectors that capitalize on innovative approaches.
In these areas we would like to tap more into the opportunities present in this country and learn from the Israeli experience. For example, we would like to see more European Venture Capital networks injecting investments in Israeli start-ups.
Similarly, we would like to see more Israeli start-ups looking to the EU market as an attractive entry point when going global. The EU has the largest internal market in the world with over 500 million customers who are eager to adopt new solutions. We also have schemes available to support start-ups looking to establish themselves in our Member States.
We see a potential big win-win for both sides here.
In this context I should add that an already existing win-win situation is actually the EU's longstanding scientific cooperation with Israel. This year marks the 20th anniversary of Israel's association to the EU's research and development programmes in which Israel is a very active and valued partner. Already, under the current Horizon 2020 programme, which began in 2014, over 500 Israeli researchers are participating in over 400 projects. The particular strength of Israeli researchers lies in the European Research Council grants which support cutting edge research. Four Israeli research institutes (The Weizmann Institute, the Hebrew University, Tel Aviv University and the Technion) are among the top host institutions for this prestigious programme.
Notwithstanding the above, it should also be stressed that while in a number of sectors Israel is advanced and leading globally, it still has some way to go in addressing the issues of low productivity and a weak competitive position in significant parts of the economy. These are concentrated mostly in the traditional manufacturing sector but also in the food sector and big parts of the services sector such as banking, retail and tourism.
This also relates to the long standing and also politically sensitive issue of the "cost of living".
We know that addressing these challenges is high on the agenda of the Israeli government which has initiated reforms to open up the economy to more competition thereby both trying to curb sometimes disproportionately high prices while also improving the competitive position of the Israeli firms concerned.
In these areas the EU has accumulated considerable experience and actually we are trying to support this process as best as we can, among other things by providing experience and best practices gained in similar reforms we have already implemented, be it in overhauling subsidization in agriculture or in rendering the labor market more flexible.
We work closely with most of the Israeli ministries and bring experts from our Member States who have managed such transitional processes and can help the Israeli government to avoid mistakes and adopt already proven regulations and approaches.
Our twinning and TAIEX programs have been instrumental in bringing the European and Israeli markets closer. Recent programs and events on issues of statistics,telecommunications, import procedures, environment and agriculture allow for closer cooperation and facilitate trade and the exchange of best practices.
We are confident that in spite of hesitation and some delays (such as the recent postponement of the gradual opening of the Israeli market for imported meat) the Israeli government will pursue these very important reforms.
Here again - we see a mutually beneficial situation possibly emerging: reducing consumer prices in Israel and allowing European companies better market access.
I hope I have succeeded in passing on the basic message through these few examples that the vast scope of EU-Israel economic interaction is not something that belongs to the past and is on the decline but rather that it has a surprisingly stable foundation from which new opportunities and areas of cooperation constantly emerge.
I would like to thank you for giving me the opportunity to speak with you today and look forward to an interesting discussion in the panel.