Sunday, 3 Jul 2022 - 4 of Tammuz, 5782

Historic free trade agreement signed between the UAE and Israel

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It is the first time in history that Israel has done so with an Arab country.

Israel’s relationship with the UAE has great economic potential in a variety of fields. This is due, in part, to the geographic and cultural proximity between the peoples, as well as the UAE’s unique characteristics.

Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, tweeted that the agreement will push the value of non-oil bilateral trade beyond $10 billion within five years.

The agreement “builds on the strong foundations laid by the Abraham Accords”, he added.

According to Dorian Barak, co-founder of the UAE-Israel Business Council, the UAE-Israel trade will exceed $2 billion in 2022, rising to around $5 billion in 5 years, bolstered by collaboration in renewables, consumer goods, tourism, and the life sciences sectors.

The United Arab Emirates (UAE) and Israel signed Tuesday a free trade agreement, the first time in history that Israel has done so with an Arab country.

Israel Minister of Economy and Industry Orna Barbivay and the UAE Minister of Economy Abdalla Bin Touq Al Marri signed the agreement in Dubai.

The agreement, which is comprehensive, significant, and ground-breaking, is expected to increase bilateral trade in goods and services, increase Israeli exports to the United Arab Emirates and provide customs exemption immediately or gradually on 96% of trade between the countries in food, agriculture, cosmetics, medical equipment, medication and more.

The agreement also relates to regulatory and standardization issues, customs, collaboration, government procurement, e-commerce and intellectual property rights

Israel Minister Orna Barbivay commented the agreement : “This is a visit of strategic importance for economic relations between the State of Israel and the United Arab Emirates. – the first free trade zone agreement with an Arab state. This agreement is expected to strengthen bilateral trade, to break down obstacles and to advance new economic opportunities and partnerships, that will serve as a basis for our shared path.’’

UAE Minister of Industry and Advanced Technology AE Dr. Sultan bin Ahmed Al Jaber:  “In accordance with our leadership guidelines, the UAE continues to take bold steps forward to advance our economy and improve our status as a regional center for trade, investments and industries. The trade agreement with Israel will create a new paradigm for the region.’’

He added, ‘’this agreement will accelerate economic growth and strengthen the common belief that the only way to build durable and sustainable economies in the complex world is together. This agreement represents something larger than business: the importance of building significant partnerships. Our agreement can prove to countries and governments around the world that cooperation and dialogue are the best way to transform challenges to opportunities.”

The Abraham Accords, which were signed in September 2020, established diplomatic relations between the State of Israel and the United Arab Emirates. About a year later, in November 2021, negotiations on a free trade agreement began between the parties, which was completed on April 1, 2022.

Israel’s relationship with the UAE has great economic potential in a variety of fields. This is due, in part, to the geographic and cultural proximity between the peoples, as well as the UAE’s unique characteristics.

The UAE is the second largest economy in the Arab world (after Saudi Arabia), with market imports worth hundreds of billions of dollars and significant weight placed on technology products and advanced solutions, where Israel holds a relative advantage.

Since the establishment of the Abraham Accords, trade in goods between the United Arab Emirates and Israel has significantly increased, reaching $885 million in 2021. The volume of exports in 2021 was $317 million, most of which relates to diamonds, but also electrical and electronic equipment, transportation vehicles and oil. The volume of imports in 2021 stood at $306 million, most of which relates to diamonds but also large volumes of electrical and electronic equipment, jewelry, minerals, fuel, and oil. The Foreign Trade Administration in the Ministry of Economy and Industry notes that, since the establishment of diplomatic relations in August 2020, bilateral trade volume has reached about one billion dollars.

According to Dorian Barak, co-founder of the UAE-Israel Business Council, the UAE-Israel trade will exceed $2 billion in 2022, rising to around $5 billion in 5 years, bolstered by collaboration in renewables, consumer goods, tourism, and the life sciences sectors.

Additionally, he said, Dubai is fast becoming a hub for Israeli companies that look to South Asia, the Middle East and the Far East as markets for their goods and services. Nearly 1,000 Israeli companies will be working in and through the UAE by year’s end. ‘’It’s unprecedented,” Barak added.

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