Jerusalem and the United Arab Emirates (UAE) have completed negotiations on a major bilateral free trade agreement (FTA).
By Erin Viner
“This is an important moment in relations between the State of Israel and the UAE. Today the good relations that have already been forged between the two countries are being strengthened in the form of a free trade agreement that will significantly upgrade economic cooperation for the benefit of the citizens of both countries,” said Israeli Prime Minister Naftali Bennett in a statement.
Foreign Minister Yair Lapid also welcomed the agreement saying it is “conducive with the spirit of the Negev Summit” that called for “continuous cooperation, continuity in contacts and has led to tangible achievements that will improve the lives of the citizens of the State of Israel and of the peoples of the region.”
The two countries formally established relations in 2020 as part of the United States-brokered Abraham Accords that also included Bahrain, Morocco and Sudan.
The Israeli Economy Ministry announced that the latest agreement mandates that 95% of all traded products will eventually be customs free, including food, agriculture and cosmetic products, as well as medical equipment and medicine. The pact, which covers regulation, customs, services, government procurement and electronic trade, will come into effect when signed by the countries’ respective Economy Ministers and ratified, the statement said, though no timetable was given.
The FTA was discussed by Prime Minister Bennett and Abu Dhabi Crown Prince Mohammed bin Zayed al-Nayan at their 21 March meeting in Egypt where they agreed to complete the agreement within days. The matter was also a topic during talks held when the Israeli leader visited the UAE last December, at which it was agreed to accelerate the contacts ahead of the signing.
A separate UAE statement said the deal will substantially reduce or remove tariffs on a wide range of goods, while enhancing market access for services and promote investment flows.
It will also create mechanisms for the expansion of small-and-medium enterprises.
“This milestone deal will build on the historic Abraham Accords and cement one of the world’s most important and promising emerging trading relationships,” UAE Minister of State for Foreign Trade Thani Al Zeyoudi declared on Twitter.
Last September, UAE Economy Minister Abdulla Bin Touq Al Marri announced that bilateral trade between the two countries had already reached between $600 million and $700 million.
“Since the establishment of the Abraham Accords, the Economy and Industry Ministry has been working to expand economic relations between Israel and the UAE and to fully utilize their economic potential,” commented Israeli Economy and Industry Minister Major General (Ret.) Orna Barbivai, adding that, “The conclusion of the negotiations is a significant and historic milestone in bilateral relations. We will continue to assist the Israeli business community to establish commercial ties in the UAE via the free trade agreement, the ministry’s economic attaches and additional assistance tools that the ministry will put at their disposal.”