The economic recovery in 2021 was reflected also in Israel’s foreign trade. Israel’s trade in goods has increased by 22% in 2021, following a 13% decrease in 2020. Its trade deficit increased by 16%, to €26.5 billion. Exports of goods have increased from €42.9 billion in 2020 to €49.9 billion, while imports have increased from €61.4 billion in 2020 to €76.4 billion. It is interesting to note that the signing of the Abraham accords has substantially increased Israel’s trade with the UAE from $94.2 million in 2020 to $555.9 million.
The EU is still, and for the foreseeable future will remain, Israel's largest trading partner. Israel’s total trade with the EU amounted in 2021 to €36.9 billion, a 23% increase from 2020. The EU represents 31.4% of Israel’s total trade, followed by the U.S. (14.5%) and China (10.9%)8. Exports to the EU have increased by almost 10% to €12.6 billion, and the EU's share in Israel's total exports stands in 2021 at 25.2%. Israel’s imports from the EU have increased by 24.6% to €24.3 billion, and the EU’s share in Israel’s imports remained almost unchanged at 31.8%. Israel’s main import sources in the EU are Germany, the Netherlands, Italy, Belgium and France.
In 2021 Israel remained the EU’s 24th largest trading partner (representing 0.9% of the EU's total trade) and the 2nd largest in the Euro-Mediterranean region, behind Morocco. The EU was the largest exporter to Israel, holding a 34.6% market share, ahead of China (11.9%) and the U.S. (9.3%). The EU was Israel’s second export market with 27% of total exports, following the U.S. with 27.3% and ahead of China with 7.3%.
The EU’s main exports to Israel were machinery and appliances (28% of total), chemicals (15%) and vehicles and associated transport equipment (14%).
Compared to other countries, particularly in the region, EU exporters may face fewer market access barriers in Israel. Moreover, in June 2022 an imports reform, substantially decreasing the regulatory burden on imports, entered into force. Also, Israel committed to withdraw a long-standing trade irritant on imports of medical devices.
Source: European Union delegation to the State of Israel
Prepared by Anastasiya Gluhov - CzechTrade Israel