Israel-France trade relations begin to thaw

Export Institute director Yechiel Assia talks about improving Israels economic relations with France, following the honeymoon between Prime Minister Ariel Sharon and French President Jacques Chirac.

The honeymoon between Prime Minister Ariel Sharon and French President Jacques Chirac has led to hopes of improvement in bilateral economic relations.

Globes: What is the current status of Israeli-French trade?

Israel Export and International Cooperation Institute director Yechiel Assia: Israeli-French trade totals $1.98 billion. Israeli exports to France total $735 million, of which chemicals account for 20%, agricultural products 15%; and telecommunications equipment 15%. Imports from France are much greater, at $1.25 billion, of which machinery and equipment account for 25%, chemicals 19%, Citroen, Peugeot, and Renault vehicles 15%. Bilateral trade has been rising steadily over the past three years. Exports rose by 5% in 2004, and imports by a much greater 11%. Israel and France have a free-trade agreement as part of Israels association agreement with the EU. We also have anti-double taxation, R&D, and space cooperation treaties.

What is the proportion of trade with France out of Israels foreign trade?

Israel accounts for 0.17% of French imports, compared with 0.5% - about double of US imports, 0.3% of Russias imports, 0.27% of the UKs imports, 0.24% of Spains imports, and 0.2% of Germanys imports. Trade openness data shows that Israel accounts for very little of French imports.

There has been talk lately about signals from France for greater openness toward Israel. A French business delegation recently visited here.

Beginning in 2004, weve felt a great openness toward Israel from the Centre Français du Commerce Extérieur (French export institute). In the past, they would not agree to joint activities, but now they do. When we returned from the Paris Air Show, they asked to organize a joint Israeli-French conference on homeland security The unquestionably better political atmosphere will be reflected in the supermarkets and retail chains.

In which sectors does Israel want to improve economic relations with France?

In French government procurement in telecommunications, environmental technologies, and agrotechnology. We also want agreements on cooperation in third countries, especially in Francophone Africa and the expected boost in World Bank and European Bank for Reconstruction and Development (EBRD) investment in Africa, following the G8 summit decision to invest in the continent.

An ability to make joint investments in Africa with French companies could be very important for Israeli companies. Were also interested in expanding R&D in the auto industry, since France is major carmaker, by buying smart technologies. A number of Israeli companies have participated in reciprocal procurement programs, such as Bombardier (TSX:BBD) and Alstom (NYSE; LSE; XETRA:ALS). These programs can be greatly expanded.

Published by Globes [online], Israel business news - www.globes.co.il - on July 31, 2005

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