In the afternoon of Monday, May 19, David Lammy, Britain’s
Foreign Secretary, rose to his feet in the House of Commons and read out a
statement condemning how the war in Gaza was being conducted by the Israeli
government.
“Netanyahu’s government is
planning to drive Gazans from their homes into a corner of the Strip to the
south,” he said, “and permit them a fraction of the aid that they need…The
planned displacement of so many Gazans is morally unjustifiable, wholly disproportionate
and utterly counter-productive.”
“We cannot stand by in the face of
this new deterioration,” said Lammy. “Therefore today, I am announcing that we
have suspended negotiations with this Israeli government on a new free trade
agreement…The Netanyahu government’s actions have made this necessary.”
Clearly Britain’s Labour government has little sympathy with
Israel’s Likud-led coalition. Nevertheless it condemns Hamas’s
bloodthirsty incursion into Israel on October 7, 2023. UK ministers, from
the prime minister down, reiterate time and again their support for Israel’s
right to defend itself, and continue to demand that Hamas release all the
hostages it snatched during its pogrom. Beyond this, however, there seems
little, if any, empathy with the formidable problems that Israel faces, or with
its efforts to deal with them.
The left wing of Britain’s Labour party is notoriously anti-Israel – a euphemism, many believe, for frank antisemitism. This was demonstrated beyond any doubt during the five years the party was led by the radical Jeremy Corbyn (2015-2020).
The legacy Corbyn bequeathed to
Sir Keir Starmer, who succeeded him as Labour leader and is now Britain’s prime
minister, was the EHRC report, published in October 2020. In it the EHRC
determined that the Labour party had indeed been "responsible for unlawful
acts of harassment and discrimination" against Jewish
people. As a result, the party was legally obliged to draft an
action plan to remedy the unlawful aspects of its governance.
But pro-Palestinian sentiment was too deeply embedded in the Labour
party for the leadership to ignore it. The manifesto on which
Starmer’s Labour party fought the July 2024 general election
declared: "Palestinian statehood is the inalienable
right of the Palestinian people.” It went on to commit a future
Labour government to recognize a Palestinian state “as a contribution to a
renewed peace process which results in a two-state solution, with a safe and
secure Israel alongside a viable and sovereign Palestinian state.”
Following the Hamas attack
of October 7, Starmer stood shoulder-to-shoulder with then-UK prime minister
Rishi Sunak, then-US president Joe Biden, and most Western political leaders,
in proclaiming Israel’s right to defend itself. His stance was not
acceptable to two entities he faces on his own political terrain, and this
remains his problem today. One is the powerful hard-left element within
his party; the other is the strong Muslim presence in some traditionally Labour
constituencies.
Four years ago there were some 4
million Muslims in the UK, representing about 6% of the population. The
figures are almost certainly higher than that today, and in certain areas
represent a significant proportion of the voting electorate.
Labour’s pro-Palestine component
began to assert itself on October 7 itself, with scattered voices approving the
Hamas attack. The collateral civilian deaths and casualties arising from
the IDF campaign were enough for the party’s support for Israel to begin to
slide. Then came the first test of electoral opinion in the UK since
October 7. On May 2, 2024 local elections took place across the
country. The results, no doubt to Starmer’s dismay, indicated that
Labour’s position on the Israel-Hamas war had dented its support in Muslim
areas. A BBC analysis found that in areas with a substantial Muslim
presence Labour's share of the vote had slipped by 21% compared with the last
time the seats were contested.
Ali Milani, chair of Labour Muslim
Network, said Labour's positioning on Gaza "is going to have a serious
electoral consequence.”
He was not wrong. In the
general election in July 2024, which Labour won with a landslide, five
independent pro-Palestine candidates unseated Labour incumbents in key
constituencies. Four were Muslim; one was Jeremy Corbyn.
In the aftermath, Corbyn announced
plans to form a parliamentary alliance with the four independent Muslim MPs.
This permanent anti-Israel bloc in the House of Commons, supported by
many radical Labour MPs, has resulted in increased advocacy for
Palestinian rights, and increased pressure on the UK's foreign policy decisions
related to the Middle East. It has contributed to the decision announced
by Lammy to suspend the negotiations aimed at securing a comprehensive free
trade agreement (FTA) between the UK and Israel.
As the UK left the EU, it signed a continuity agreement with Israel to ensure uninterrupted trade between the two countries. Coming into effect on 1 January 2021, it coincided with the end of the Brexit transition period and maintained the terms of the EU-Israel Association Agreement. On July 20, 2022 the UK and Israel embarked on the negotiations for a FTA . With both parties world leaders in hi-tech, the negotiators aimed particularly to enhance collaboration in technology, innovation, and digital services.
The talks were conducted against
the backdrop of flourishing UK-Israel bilateral trade. There
had been year-on-year growth from 2014 to 2018, when the figure reached $10.5
billion. Subsequently both Brexit and Covid caused the figure to
fluctuate. The best estimate of UK-Israel bilateral trade in 2024 is $7.2
billion.
The suspension of negotiations for
a UK-Israel FTA will not necessarily have a major impact in the short term.
Trade between the UK and Israel will continue under the UK-Israel Trade and
Partnership Agreement, concluded at the time of Brexit. Businesses will
still be able to trade with relative certainty, and supply chains will remain
intact. What might be affected is investor confidence.
If the suspension is maintained,
however, the consequences for both parties could be significant. The
half-formalized FTA aimed to modernize and expand the
bilateral trade framework to cover areas such as digital trade,
cybersecurity, med-tech, green energy, AI, intellectual property rights,
fintech, optics and lasers, aerospace and defense, sustainability and
government procurement. Without the developmental boost that the FTA was
calculated to provide, growth in these hi-tech areas, in which Israel is a
world leader, will certainly slow down. The UK, no less than
Israel, will lose out. And so will the world at
large.
Published in the Jerusalem Post, and the Jerusalem Post online titled: "UK freezes trade with Israel - and integrity with it", 26 May 2025:
https://www.jpost.com/opinion/article-855313
Published in the Eurasia Review, 30 May 2025:
https://www.eurasiareview.com/30052025-uk-israel-free-trade-deal-on-hold-oped/







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