After months of negotiations, the free trade agreement between Israel and UAE was signed in Dubai. The Israeli Ambassador, Amir Hayek tweeted, “Done” in a reply to his earlier tweet which read, “the UAE and Israel will sign FTA in the next hour” after the Comprehensive Economic Partnership Agreement was signed by the Israeli Minister of Economy and Industry, Orna Barbivai, and the UAE Minister of Economy, Abdulla bin Touq al-Marri.
What the UAE Minister of Economy had to say about the pact was hopeful and promising for the future of the economy between the two great Middle Eastern nations, “In accordance with the instructions of our leadership, the UAE continues to take daring steps forward to promote our economy and improve our status as a regional trade center for future investments and industry. The trade agreement with Israel creates a new paradigm in the region. This agreement will speed up economic growth and strengthen our joint belief that the only way to build a resilient and sustainable economy in a complex world is together. This agreement also symbolizes something bigger than business: the importance of building major partnerships. Our agreement can prove to peoples and governments around the world that cooperation and dialogue are the best way to turn challenges into opportunities.”
Predictions of what the FTA will bring are promising, with the President of the UAE-Israel Business Council, Dorian Barak, saying that the trade agreement will influence tax rates, imports, and intellectual property, and in effect, it would make UAE an attractive location for Israeli companies to set up in. He also says that there should be approximately one thousand Israeli companies working in the UAE by the end of the year.
The Emirati Trade Minister, Thani al Zeyoudi, on the other hand, predicts that the free trade deal will increase the value of non-oil bilateral trade between the two countries far beyond $10 billion within the next five years, which is a dramatic increase considering that the two-way trade between the two nations in 2021 only totalled approximately $900 million, but it isn’t a far-fetched number as the Israeli economy ministry has previously announced that the signing of the free trade agreement will remove the tariffs on 96% of goods from the medical, agriculture, and cosmetic industries.
“Our agreement will accelerate growth, create jobs and lead to a new era of peace, stability, and prosperity across the region,” Thani al Zeyoudi posted on Twitter.
“Together we will remove barriers and promote comprehensive trade and new technologies, which will form a solid foundation for our common path, will contribute to the well-being of citizens and make it easier to do business,” Barbivai was quoted as saying, “This is an event of historic importance for economic relations between the State of Israel and the UAE – the first free trade agreement with an Arab country. The free trade agreement that we signed this morning will strengthen trade between the two countries, remove barriers and promote new business opportunities and partnerships, which will represent a robust base for our joint journey.”
The two countries were once nominal enemies but the United States bypassed the Arabic policy which calls for a Palestanian state and brokered a deal in 2020 which allowed Israel and UAE to establish a diplomatic relationship between the two countries under the Trump administration. The foreign ministers of both UAE and Bahrain, along with the Israeli Prime Minister, Benjamin Netanyahu, forged a peace treaty prior to stepping down from his position.
The UAE has been pursuing free trade agreements with several countries in an attempt to revitalize its economy following the Covid-19 pandemic. UAE was able to sign a free trade agreement with India last February, making the Comprehensive Economic Partnership Agreement with Israel the second bilateral free trade agreement and the nation is currently in bilateral trade talks with surrounding countries such as South Korea and Indonesia. The free trade agreement will allow Israel to tariff free trade throughout the Gulf and EFTA countries such as Switzerland, Norway, Iceland (home to the gorgeous beaches of Reynisfjara) and Lichtenstein through the UAE.
The economies of both great nations are looking up, and there seems to be ample opportunities and possibilities that the free trade agreement will bring, regardless of the current conflicts in both territories. The agreement was signed amid escalating violence in both occupied East Jerusalem and West Bank. Ultra-nationalist Israelis have also been reported marching through Palestinian areas of the Old City, chanting racist anti-Arab and anti-Palestinian songs while attacking locals.
The foreign ministry has asked Israeli authorities to take responsibility for putting an end to the conflict so that they are able to move forward and “avoid further instability.”