Israel and UAE sign free trade agreement; Trade to reach USD 2 billion by

Jerusalem/Dubai: The United Arab Emirates (UAE) and Israel signed the Abraham agreement in September 2020 to extend cooperation. On Tuesday, Israel and UAE signed a free trade agreement as to the next step of the Abraham agreement. This is the first free trade agreement signed by Israel with any country in the Middle East, indicating a paradigm shift in the political and economic scenario for Middle Eastern countries. This has opened the possibility of a few other Middle Eastern countries signing a free trade agreement with Israel.

Moreover, historically, Israel and UAE did not have formal cooperation on any front. Like the other Arab countries, UAE, too, had adopted a stand against Israel on the issue of Palestine. But in 2020, the former US President Donald Trump mediated the Abraham agreement between Israel and UAE. Thereafter, Israel and UAE established cooperation on various levels. This also includes trade as well as defence cooperation.

A few months ago, Israeli Prime Minister Naftali Bennett visited the UAE and met Crown Prince Mohammed Bin Zayed. It is claimed that the discussions regarding the free trade agreement started after this meeting. Negotiations between the two countries lasted for a few weeks. Israel’s Finance and Industry Minister Orna Barbivai and Abdulla Bin Touq Al Marri, Finance Minister of UAE, signed the final agreement.

Israeli Prime Minister Bennett welcomed this free trade agreement. Prime Minister Bennett announced that this is the first historic free trade agreement between Israel and an Arab country. Prime Minister Bennett underlined the deal’s importance, saying that Israel has not signed a free trade agreement with any other country in such a short period.

Dorian Barak, President of the UAE-Israel Business Council, declared that the trade between Israel and UAE would reach USD 2 billion by the end of this year. Barak also expressed confidence that this trade will cross USD 5 billion in five years. Barak claimed that Dubai would soon become the leading centre for Israeli companies. Barak added that more than a thousand Israeli companies would start operations in the UAE by this year.

Meanwhile, Israel had previously established trade cooperation with neighbouring Arab countries like Egypt and Jordan, even before the Abraham agreement. Israeli media is pointing out that Israel has not signed free trade agreements with these countries. Therefore, as per Israeli media, this free trade agreement between Israel and UAE is crucial for the developments in the Middle East.