Israel and the United Arab Emirates on Tuesday signed a comprehensive and “groundbreaking” free trade agreement that aims to strengthen economic ties between the two countries, as the trade has reached an estimated value of US$2.5 billion. signing of the Abraham Accords that were brokered by the United States.
Economy and Industry Minister Orna Barbivai was in Dubai on Tuesday morning to sign the deal alongside her Emirati counterpart Abdulla bin Touq Al-Marri, who said last year that the UAE hoped to generate over a trillion dollars from trade with Israel over the next decade.
The terms of the agreement were finalized last month in Jerusalem with UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi.
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In January, the Israeli cabinet approved a UAE-Israel Research and Development fund created to support technology projects involving companies from both countries.
The free trade agreement covers regulations, customs, services, e-commerce and protection of intellectual property rights, among others.
About 96 percent of products traded between the two countries, including food, agriculture, cosmetics, medical equipment and medicines, will be tax-exempt, according to the agreement. While some products will immediately benefit from this exemption, the process will be gradual for others.
Speaking from Dubai on Tuesday, Barbivai praised the agreement’s “historic significance” for economic relations between Israel and the UAE, noting that it is the first comprehensive free trade agreement signed between the Jewish state and the UAE. an Arab majority country.
Barbivai explained that the agreement was “an innovative initiative” for Israel and the United Arab Emirates, an initiative that will serve “as an inspiration for the region” and that “will lead to unlimited opportunities for economic empowerment for entrepreneurs and businessmen”. of the two countries”.
“Together, we will remove barriers and promote integral trade and new technologies that will build a solid foundation for our common trajectory and that will benefit citizens and facilitate trade. This is a comprehensive free trade agreement, the first free trade agreement with an Arab state – and one that we are concluding now, shortly after the establishment of our diplomatic relations,” Barbivai said on Monday, ahead of the signing ceremony. .
Israel’s ambassador to the UAE, Amir Hayek, wrote: ” Mabrouk – “congratulations” in Arabic – on Twitter, a post accompanied by a photograph showing officials from the Emirates and Israel holding the documents at a signing ceremony in Dubai.
Mabruk!!! ???????????????????????? pic.twitter.com/Uf1DcEpNBb
— Ambassador Amir Hayek (@HayekAmir) May 31, 2022
The Emirates ambassador to Israel, Mohamed Al Khaja, for his part, called the agreement “an unprecedented achievement”, saying it will benefit both countries. He also thanked Ohad Cohen, head of the Israel Foreign Trade Administration, for leading this initiative.
“Israel and the UAE have just signed a free trade agreement – the first of this magnitude to be signed between Israel and an Arab state,” Prime Minister Naftali Bennett wrote after signing the agreement in Dubai.
Al-Marri, the Emirati Economy Minister, said on Tuesday that the agreement “establishes a new paradigm in the region” and that it “will accelerate economic growth and reinforce the common certainty that the only way to build a sustainable economy in a complex world is to do it together”.
The free trade agreement “can prove to nations and governments around the world that collaboration and dialogue are the best way to turn challenges into opportunities,” he added.
Al Zeyoudi also hailed “a new era for trade and investment” in the region, adding that “the comprehensive agreement that has been signed between our two countries will accelerate economic activities”, creating opportunities for research and development, “as well as new investments in agricultural technologies, renewable energy and other cutting-edge technologies – sectors that are crucial for our two countries.”
“Over the past 18 months, we’ve proven what can be achieved when conflicts and differences are set aside. We are now ready to build on the foundations established and foster a new era of opportunity and entrepreneurship for our citizens; we are ready to establish a relationship based on mutual respect, tolerance, open and honest speech, unity of thought and action. I have no doubt that this agreement will usher in a new era of thriving economy in our region,” said the UAE Minister of State for Foreign Trade.
Existing trade between the Jewish state and the UAE is estimated at $2.5 billion since the signing of the Abraham Accords in 2020, Zeyoudi reported in Davos last week. More than $1 billion was registered during the first quarter of 2022, he added.
He noted that in 2023-2024, trade between the two countries is expected to reach five billion dollars, according to forecasts.
The UAE and Israel signed a normalization agreement in 2020 under the Abraham Accords, which was brokered by the United States. Bahrain, Sudan and Morocco followed the example set by the United Arab Emirates.
Discussions on the free trade agreement began in November 2021 and were finalized in less than six months.
The Jewish State has already concluded free trade agreements with other countries and blocs, including the United States, the European Union, Canada and Mexico.
In February, Israel signed a trade agreement with Rabat on the special industrial zones project in Morocco.
Ties between the Jewish state and Saudi Arabia have also improved in recent months. According to a report that aired last week on Channel 12, a senior Israeli official visited the kingdom very recently, amid growing rumors that Jerusalem and Riyadh are ready to take small steps towards normalizing relations between the two. countries.
The parties reportedly discussed the security interests of the two nations, which have become more aligned in recent years in the face of the common threat posed by Iran.
In addition, an article published in globes said that dozens of Israeli businessmen and technology entrepreneurs recently visited Saudi Arabia for discussions on Saudi investments in Israeli companies and investment funds.
These alleged interactions between the two countries, which have no official link, come as the United States encourages its allies to cooperate more in the region, and came ahead of a trip to the Middle East by US President Joe Biden, who will visit Israel and also Saudi Arabia.
The kingdom had refrained from signing the Abraham Accords in 2020 as the United States and Israel had hoped, but Ryad would have given, in this context, the green light to Bahrain to join this normalization adventure with the Jewish state. Saudi Arabia has a big influence in Bahrain.
In March, Crown Prince Muhammad bin Salman declared that Israel could be “a potential ally” for Riyadh.
Lazar Berman, staff at The Times of Israel and AFP contributed to this article.