As part of Ukraine and Israel’s ongoing initiative to forge closer political and economic ties, the countries’ two governments signed a massive free trade agreement on January 21 that will give Israeli companies full access to the potentially lucrative Ukrainian market and grant Ukrainian companies tax benefits for products destined for the Israeli market.
The new pact is expected to lower import costs for Ukrainian products and increase exports while boosting bilateral trade by 20% to reach €880.32 million over the course of the next five years. The deal officially abolishes duties on 80% of Ukraine’s industrial exports to Israel and on 70% of Israeli industrial exports to Ukraine.
The full effect of the new deal is expected to be felt in the early part of the coming decade and is expected to be a major boon for Ukraine’s heavy industry sector.
“Today a free trade agreement was signed and we have been working on it for many years,” Israeli PrimeMinister Benjamin Netanyahu said a joint news conference in Jerusalem while flanked by Ukrainian President Petro Poroshenko. “This brings our cooperation to a new level. We eliminate existing trade barriers, give companies from Ukraine and Israel wider access to markets, and further activate business activities,” Netanyahu added before saying that he and Poroshenko would “also talk of other ways to increase our cooperation in a variety of fields — in technology, in health, in aerospace, in science and more.”
Ukraine and Israel are two countries with deep cultural connections due to the huge influx of Russian-speaking right-of-return Soviet immigrants – many of whom hailed from Ukraine – that arrived in Israel in the early and mid-1990s. The two countries have, as a result, worked aggressively in recent years to boost their cooperation on a variety of fronts.
Since Ukraine’s 2014 Euromaidan Revolution overthrew the slavishly pro-Russian government of former President Viktor Yanukovych, Poroshenko has invested a significant amount of time and political capital trying to bolster the relationship between his and Netanyahu’s respective administrations. This has, to a certain degree, been somewhat of a risky political gambit for Poroshenko considering the close working and personal relationship that Netanyahu enjoys with Russian President Vladimir Putin and Netanyahu’s refusal to publicly condemn the Kremlin’s invasion and annexation of Crimea.
Poroshenko has, however, been able to align Ukraine closely with Israel on several key foreign policy issues related to the Syrian Civil War where Tel Aviv deeply opposes Moscow’s support for Syrian dictator Bashar al Assad and the presence of the Kremlin’s close ally in Syria – the Islamic Republic of Iran.
In effort to combat Russia’s narrative that the post-Euromaidan revolutionary government is run by Third Reich-inspired anti-Semites, Poroshenko and his prime minister, Volodymyr Groysman, who is a Jew, have overseen several projects in Ukraine, including the opening of a Holocaust Memorial Museum at Babyn Yar, outside of Kyiv – site of one of the worst single-day massacres of Jews by the Germans during the Second World War.
Poroshenko’s initiatives are also aimed at boosting awareness of his country’s centuries-old and deep-rooted Jewish culture, as well as Ukraine’s contribution to the founding of the State of Israel.
Ukraine was the birthplace of Moshe Sharett, Levi Eshkol, and Golda Meir – the second, third, and fourth prime ministers of Israel – as well as famed Nazi-hunter Simon Wiesenthal, former Israeli Deputy Prime Minister and Soviet dissident Natan Sharansky, and Ze’ev Jabotinsky, the founder of the Irgun, one of the main forerunners of the modern Israeli Defence Forces, the IDF, and the ideological father of Netanyahu’s conservative Likud Party.
The relations building announcement by Poroshenko and Netanyahu also included a visit by the former with the Speaker of the Knesset, the Israeli parliament, Yuli Edelstein, and Jerusalem Affairs Minister Ze’ev Elkin, both of whom are originally from Ukraine. Elkin was instrumental in helping to facilitate the new free trade agreement.