In a move reflecting their robust $3.3 billion trade relationship, Israel and Japan will be actively exploring the possibility of forging a landmark free trade agreement, during a number of events this week in Israel.
Economy Minister Nir Barkat held a meeting in Tel Aviv on Monday with the Japanese Economy, Trade and Industry Minister, Yasutoshi Nishimura. Nishimura arrived in Israel with an 80-member business delegation from Japan.
During their meeting, ministers Barkat and Nishimura formalized an understanding of economic and innovation ties between Israel and Japan, according to a joint statement.
Barkat lauds Israeli potential for Japanese businesses
Barkat expressed his enthusiasm, saying “There’s vast potential for Japanese businesses to invest in Israel and enhance trade with one of the world’s leading economies. Our nations share deep-rooted historical and cultural ties, built on common values and innovative mindsets.
“The persistent strengthening of our trade relations in recent years is a testament to the mutual commitment to pushing our economies forward. My ambition is to deepen the bond between Israel and Japan, recognizing the massive untapped potential, and I am keen on collaborating closely with minister Nishimura to achieve this,” he said.
Barkat’s meeting with Nishimura followed a sequence of discussions with top Japanese officials, including the digital transformation minister, as well as the finance minister. These conversations were set against the backdrop of the exploration of the prospect of initiating talks on a bilateral free trade agreement.
Both ministers addressed attendees at the annual JIIN (Japan Israel Innovation Network) conference. It progressed with the ministers’ formal discussion, culminating in the signing of the fourth protocol on economic and innovation dialogue between the two nations – a platform allowing both governments to converse on economic, trade, and cooperative initiatives.
The talks also ventured into the exploration of methods to harness and enhance the burgeoning trade relations. Barkat unveiled plans for an official visit to Japan in October. He will head an Israeli business delegation and engage in a series of official dialogues with Japanese government representatives, business leaders, academia, and others.
According to official data, throughout the years, Israel and Japan have forged strong ties across diverse sectors. In 2022, the trade volume in goods and services stood at $3.388 billion. This comprises $1.313 billion in exports (a 16% increase from 2021) and $2.075 billion in imports. Exports to Japan are varied, with dominant sectors being machinery, electrical equipment, optical instruments, medical devices, chemicals, and processed food. Major imports include machinery, electrical equipment, and vehicles. Japanese investment in the Israeli tech sector surged to roughly $3 billion in 2021, making up around 12% of similar investments. While 2022 saw a dip in overseas investments, 67 transactions valued at approximately $1.6 billion were logged between Japanese and Israeli businesses.