Israel and Japan are taking the initial steps that would lead to a free trade agreement between the two countries.
This would be helpful in reducing the prices of Japanese made toys, cars and other imported items and also lower the tariffs.
Outgoing Prime Minister Yair Lapid said that they had taken the first step in Tokyo towards signing a free trade agreement with Japan.
He stated that the agreement would mean discounts for goods and products from Japan that would benefit the market in Israel.
In addition, it would also boost exports to Japan, which is the world’s third-largest economy. He also added that they were celebrating 70 years of ties between the two countries this year.
He added that this was evidence of the growing strength of the two nations, both economically and diplomatically.
It was back in 1952 that Israel and Japan had first established diplomatic relations and recent years have seen warming defense relations and expanding economic activity.
Since 2000, about $13 billion has been invested by Japanese companies in the tech industry in Israel. The Foreign Ministry of Israel also disclosed that 15.8% of all foreign investments in the tech industry come from Japan.
In 2016, this had only been 1.6% and had been 12% of total investments, which means both Israeli and foreign investment.
The two countries had also signed an agreement at the end of August for closer cooperation on military equipment and defense technology.
According to Lapid, the steps they have taken towards a free trade agreement are a great achievement for the country’s economy and its global position as well.
The Foreign Ministry shared statistics that the volume of trade in goods and services had reached $3.574 billion between Israel and Japan.
It further said that there was also an 8% year-on-year increase in exports to $1.241 billion, which was primarily due to base metals, business services, machinery products and medical and optical equipment.
There was also a 10% increase in imports in 2021 to $2.333 billion, as opposed to 2020. The Economy and Foreign ministries agreed to set up a joint feasibility study with their Japanese counterparts on Tuesday.
This study would be focused on making a free trade agreement between Israel and Japan. The process will involve Israeli ministries’ representatives meeting with their Japanese counterparts.
They would discuss the possibility of coming up with an Economic Partnership Agreement between the two countries.
Gilad Cohen, the Israeli Ambassador to Japan, said that they were glad to be moving towards discussions about a free trade agreement after negotiating for a decade.
He added that the step could result in lower tariffs and would also bring down the cost of imported goods as well as Japanese cars and would give Israeli exports a boost.
The topic of free trade agreement comes as the one between South Korea and Israel is expected to be implemented from December 1st, which will be a first agreement of its kind between Israel and an Asian country.