UAE, Israel sign historic free trade agreement

  • 31/05/22

Israel signed a free trade agreement with the UAE on Tuesday, the first time it has struck a deal of this kind with an Arab state.

The "comprehensive economic partnership agreement" aims to consolidate trade and investment relations between the two countries and will stimulate an estimated $10bn/yr of non-oil trade within the next five years, the UAE's state news agency WAM said. The deal will also add about $1.9bn to the UAE's gross domestic product (GDP) over the same timeframe, WAM said.

Israel's minister of economy and industry Orna Barbiva and her UAE counterpart Abdulla bin Touq Al Marri signed the pact after months of negotiations. The trade agreement comes less than two years after the two countries established formal diplomatic relations in a US-brokered deal.

Between the signing of that deal and March 2022 the value of non-oil trade between Israel and the UAE stood at $2.5bn, WAM said. In the first quarter of this year non-oil trade exceeded $1bn, a fivefold increase from the same period last year.

The trade deal abolishes customs duties on 96pc of the products exchanged between the two sides.

"Free trade agreements between countries usually take many years to sign," Israeli prime minister Naftali Bennett said in a tweet, adding that he and UAE president Sheikh Mohammed bin Zayed Al Nahyan agreed at a summit in Egypt in March to speed up the process, "and that is exactly what happened".

For the UAE, Opec's third-largest oil producer, the deal with Israel is its second bilateral free trade agreement after it signed a similar accord with India that came into force at the beginning of May. The UAE's trade partnerships are part of a set of strategic projects aimed at fostering a new phase of growth for the next 50 years. It aims to sign six more comprehensive economic partnership agreements with countries of strategic importance either regionally or globally.


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