Israeli consumers struggling with higher prices at the supermarket are about to get a break–at least from goods that carry import duties. Israel has added new countries to its free trade list, including India, China, and the UAE.
Israeli Imports and Free Trade Relief
Since Israel is a country rich with innovation but lacking in natural resources, it relies on imports from other countries. Import duties are burdensome on the average Israeli, but free trade agreements with major producers, such as India and China will increase the spending power of Israelis. Shoppers may notice that, by the end of 2022, prices of fresh produce, dairy, and other food items will be cheaper.
These new agreements are also typical of an era of enhanced cooperation between Israel and countries with whom they did not enjoy particularly warm ties in the past. However, the political and diplomatic climate has been changing for the better in the past few years, as demonstrated by the Abraham Accords in 2020.
The list of countries Israel is newly engaged in free trade with is long, but India, China, and the UAE stand out. India and China are major exporters and comprise on fourth of the world’s population. Israel is currently in talks with the Eurasian Union, which includes Belarus, Kyrgyzstan, and Armenia.
Why the Free Trade Agreement with the UAE May Be Decisive
Talks with the UAE are in the final stages. A free trade agreement with the UAE may not be so surprising, given the many talks between the two countries on trade in recent years.
However, this development is worth noting, because the UAE has free trade agreements only with gulf states and countries located in Europe who are not part of the EU. This puts Israel in a unique position, and a free trade agreement should cement the economic and political ties the two countries have forged recently.
In addition, the main benefit of free trade with the UAE is not the country itself, which has a similar population and trade as Israels, but that the UAE is a gateway to other economic markets, such as East Asia, the Middle East, and Africa. The UAE could be Israel’s key to unlocking markets in countries with which Israel does not have diplomatic ties.
A Diverse List of Free Trade Partners
When the agreements are completed, India, China, and UAE will be added to the list of other countries with whom Israel has free trade agreements, including the U.S, The United Kingdom, Brazil, Argentina, Uruguay, Paraguay, Mexico, Turkey, and Ukraine. What is fascinating about Israel’s agreement with Turkey is that trade between the countries remains robust even as rhetoric heats up from time to time and diplomatic ties can be shaky.
The expansion of free trade will lift the burden of import taxes from the consumer and will give the average Israeli more choice when they go shopping as Israel becomes a more desirable market. With inflation, the widening income gap, and other economic challenges, lower prices on popular items may lead to increased consumption and help boost Israel’s already robust economy.
Invest in Israel’s Economy
Israel is an increasingly attractive market and its major free trade agreements with China, India the UAE and other countries should increase the spending power of the Israeli consumer. These agreements can be a harbinger of additional trade deals that will continue to strengthen Israel’s economy. Now is the ideal time to buy Israeli investments. The Jerusalem Portfolio, which is comprised of ETFs, is an Israeli investment with a comprehensive focus on Israel’s economic growth.
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The Jerusalem Portfolio is comprised of a fractional interest in 100 Israeli companies through a portfolio of professionally managed ETFs. The recipient will be given a plaque with a beautiful and customized image of Jerusalem. Talk to our experts today about buying TJP for yourself or giving the Jerusalem Portfolio to a special young person as a bar or bat mitzvah gift, birthday, graduation, or other occasions.