UAE, Israel deals set to hit $10b goal 2 years ahead of projections

The free-trade agreement that the UAE and Israel ratified on December 11 would likely achieve its goal of generating an annual $10 billion in bilateral economic activity by 2026, two years ahead of earlier projections.

The Comprehensive Economic Partnership Agreement, which was first signed in May following the historic Abraham Accords, will remove or reduce tariffs on 96 per cent of goods traded between the two nations.

UAE’s Minister of State for Foreign Trade Thani Al Zeyoudi was quoted by The Circuit as saying that there is a growing appetite across the region for more such collaboration and cooperation. “There are now six countries in the Arab world that have recognised Israel and the benefits of these ties will accumulate as trade flows increase. Obviously, we cannot decide for other countries because it’s [a matter of] sovereign rights. But I’m sure through these engagements and the results from our economic and bilateral trade, it’s a signal to everyone how important and how powerful this cooperation is,” the minister was quoted as saying in the video interview with The Circuit.

Al Zeyoudi said he expects ties between the two countries to strengthen under returning Israeli Prime Minister Benjamin Netanyahu.

Non-oil trade between UAE and Israel hit $2 billion in the first nine months of 2022, up 114 per cent from the same period in 2021. The agreement will accelerate this progress as the UAE creates opportunities in key sectors such as advanced technology, renewable energy, and food security.

The UAE-Israel Cepa has been designed to help facilitate global supply chain efficiency, including for agriculture and food products, which would have an impact on food security. It would also help facilitate the movement of natural persons, especially the business community.

The agreement, which is expected to have a major catalysing effect on mutual investment flows, has opened the doors to new export opportunities in the services and services-related sectors. It provides better market access for key UAE products to Israel, such as aluminium, petrochemicals, and polymers such as ethylene and propylene.

The deal also secures more favourable access for UAE companies to Israel’s market in services, such as business services, communications services, distribution services, environmental services, financial services, tourism and travel-related services, and transport services.

According to the investment consultants, Cepa will also enable investment flows into tourism infrastructure projects and open more flights between both countries, besides offering greater market access for UAE services exports, of which travel and aviation will be the major beneficiaries.

Since the signing of the Abraham Accords, the UAE and Israel have signed a series of important MoUs as both economies have similar priorities such as renewable energy, healthcare, advanced technology, water and food security, logistics nd transport, and space sciences.

• Business