Gabhaim buíochas le baill an choiste as an gcuireadh a bheith i láthair anseo inniu. I am the head of the trade division in the Department of Enterprise, Trade and Employment and I am joined by my colleague, Mr. John Hughes, who is the principal officer from the innovation and investment division in the Department. Between the two of us, we are happy, on behalf of the Department of Enterprise, Trade and Employment, to assist as best we can the members' deliberations on the pre-Committee Stage scrutiny of the Illegal Israeli Settlements Divestment Bill.
The Bill is a Private Members' Bill that relates to the work of the National Treasury Management Agency, NTMA, and the Irish Strategic Investment Fund, ISIF. These bodies come under the remit of our colleagues in the Department of Finance and I understand that members have heard recently from that Department, and from ISIF. For our part, the committee has asked us to contribute with a view to the trade aspects of the proposed Bill. I will begin by setting out the context of Ireland’s trade and investment strategy.
As a small, open and advanced economy, international trade and investment are hugely important to the Irish economy, supporting approximately 1.3 million jobs in Ireland directly and indirectly. In 2022, the total volume of Ireland’s trade globally exceeded €1 trillion, the first time this milestone has been reached. The relatively small scale of Ireland's domestic economy means that Ireland relies on external demand and global markets for sustainable and continued growth, and to maintain and create jobs and prosperity here at home.
In 2022 the Department launched our Trade and Investment Strategy 2022-2026: Value for Ireland, Values for the World. The strategy sets the direction for our approach to global trade and investment into the middle of this decade. The aim of the strategy is to see Ireland grow sustainably, diversify our export markets, and support continued prosperity and higher living standards for all the people of Ireland and of those countries with which we do business and trade. The trade strategy articulates our plans for trade and investment, how it can support climate action and sustainable development, and it sets out a principled and holistic approach to trade policy, including in important areas such as the environment, labour standards and human rights.
Moving on to the subject matter at hand, Israel is the EU’s 25th biggest trading partner, representing 0.8% of the EU’s total trade in goods in 2022. It is also among the EU’s main trading partners in the Mediterranean area. On the Israeli side, the EU is Israel’s number one trade partner, accounting for 28.8% of its trade in goods in 2022: a total of 31.9% of Israel’s imports came from the EU, and 25.6% of the country’s exports went to the EU. Two-way trade in services between the EU and Israel amounted to €16.7 billion in 2021. EU imports of services represented €6.9 billion, while exports accounted for €9.8 billion.
Looking at Ireland–Israel trade specifically, the value of Ireland's trade with Israel in 2022, the latest year for which both goods and services trade data is available, was €13 billion. Ireland exported nearly €6 billion in 2022 and imported approximately €7 billion. Some 83% of Ireland’s exports to Israel were services and 17% were physical goods exports. The main trading sectors are electronic components, medical and pharmaceutical products.
Given the value of our global trade, which as I mentioned was €1 trillion in 2022, our trading relationship with Israel, at €13 billion in that period, could be considered modest but not, I would say, insignificant.
With regard to the engagement of our enterprise agencies, Israel is not a major export market for Enterprise Ireland's client companies, with exports accounting for less than 1% of total EI client company exports. As regards companies supported by IDA Ireland, there are seven Israeli companies in IDA’s portfolio, covering a diverse range of industries and employing approximately 2,400 people. IDA Ireland is not currently targeting investment from Israel and IDA Ireland does not support companies linked to the occupied Palestinian territories.
Ireland’s trade relationship with Israel operates through the framework of the EU-Israel association agreement. Trade policy is an exclusive competence of the European Union as part of the EU's common commercial policy. The EU-Israel association agreement has been in place since June 2000. The agreement aims to provide an appropriate legal and institutional framework for political dialogue and economic co-operation between the EU and Israel. As the committee will be aware, on 14 February the then Taoiseach and the Spanish Prime Minister requested that the European Commission undertake an urgent review of the EU-Israel association agreement in order to consider whether Israel’s actions in Gaza breached essential elements of the agreement. The matter is being considered within the EU institutions and no response has been received to date.
In the context of what we are here to discuss today, it is important to state that Ireland and the EU have never recognised Israel’s sovereignty over the occupied territories, in keeping with international law. Exports from occupied Palestinian territories do not benefit from preferential treatment under the association agreement and are not included in our trade statistics in respect of Israel. For the purposes of trade, products from occupied territories are appropriately labelled, and they must be appropriately labelled if entering the EU Single Market.
I hope I have given committee members some of the facts and a fair overview of Ireland’s current trade relationship with Israel, and provided the committee with some understanding on the framework within which we engage on trade-related matters in the context of Israel and the occupied Palestinian territories, which may have some relevance to the Bill that is under scrutiny and consideration today. I look forward to further discussion over the course of the meeting.
