The UAE and Israel signed a trade agreement on Tuesday in a bid to raise bilateral trade to more than $10bn within five years.
The agreement was signed between the UAE’s Minister of Economy Abdulla Bin Touq and Israel’s Minister of Economy and Industry Orna Barbivai, Emirates News Agency (WAM).
The deal is expected to advance bilateral trade beyond $10bn within five years and add $1.9bn to the UAE’s GDP within the same time period. Moreover, total UAE exports are expected to increase by 0.5% by 2030.
The UAE-Israel Comprehensive Economic Partnership Agreement (UAE-Israel CEPA) was signed in Dubai, beginning a new era of cooperation between the two nations, which established diplomatic ties in September 2020.
According to WAM, the UAE-Israel CEPA offers unprecedented economic benefits for both parties by lowering or eliminating tariffs on more than 96% of tariff lines and 99% value of trade, enhancing market access for exporters, attracting new investment, and creating opportunities in key industries, including energy, environment, and digital trade.
The deal will also support service sectors such as hospitality, financial services, distribution, and construction, and provide a platform for SMEs in both countries to expand internationally.
“Under the directives of our leadership, the UAE continues to take bold steps to advance our economy and enhance our status as a regional hub for trade, investment, and the industries of the future. This CEPA with Israel will create a new paradigm for the region. It will accelerate growth and underscore a shared belief that the only way to build resilient and sustainable economies in a complex world is by doing so together,” said Abdulla Bin Touq.
“It also symbolises something greater than business — the importance of building meaningful partnerships. Our agreement can demonstrate to nations and governments around the world that cooperation and dialogue are the best ways to transform challenges into opportunities,” he added.
For her part, Barbivai said: “This is a visit of strategic importance for economic relations between Israel and the UAE. Today we signed a CEPA and advanced a series of economic partnerships. Together, we will break down obstacles and we will advance comprehensive trade and new technologies that will serve as a basis for our shared path, contribute to the benefit of our citizens and make it easier to do business.”
“This is the first full free trade agreement made with an Arab state, and it is happening in such a short time after the establishment of diplomatic relations.”
The agreement builds on the exponential growth in trade and investment the UAE and Israel have enjoyed since the signing of the Abraham Accords. From September 2020 to March 2022, non-oil trade surpassed $2bn, while it reached $1.06bn in the first three months of 2022 — five times the total from the same period in 2021.
Furthermore, UAE Minister of State for Foreign Trade Thani Al-Zeyoudi said that “by establishing diplomatic ties in 2020, the UAE and Israel embarked on a new era of regional trade, investment, and exchange. The UAE-Israel Comprehensive Economic Partnership Agreement will further catalyse economic activity and — more importantly — create new research and investment opportunities in agri-tech, renewable energy, and advanced technology, which are priority sectors for both countries.”
“Over the past 18 months, our nations have demonstrated what can be achieved when we cast aside our differences, and — as we emerge from the challenges of the global pandemic — the UAE and Israel believe that multilateral approaches are needed to rebuild supply chains, reinvigorate economies, and restore confidence. We are confident this deal will pave the way for a new era of regional economic success,” Al-Zeyoudi added.
The UAE-Israel CEPA is part of a series of bold initiatives that the UAE has launched to build a stronger, more resilient economic future and drive the global post-COVID-19 recovery.
In 2021, as part of its ‘Projects of the 50 Initiative, the UAE embarked upon a programme of enhancing bilateral trade relations with key partners around the world.
The UAE-Israel CEPA is the second bilateral trade accord concluded by the UAE following the UAE-India CEPA, which entered into force on May 1.