The United Arab Emirates signed a Comprehensive Economic Partnership Agreement with Israel on 31 May, which eliminates most tariffs and aims to lift their annual bilateral trade to more than USD10 billion within five years. It is the first free trade deal signed by an Arab state with Israel.
Emirati-Israeli trade stood at USD1.2 billion in 2021. Tariffs will be removed or reduced on 96% of goods traded between the nations, including food, medicine, diamonds, jewellery, fertilisers and other chemicals. Most duties are eliminated with immediate effect, while others will be removed over a three to five-year timescale. Some products will still be subject to customs tariffs but at a lower rate.
The pact was signed in Dubai by UAE Minister of Economy Abdulla bin Touq al-Marri and Israeli Minister of Economy and Industry Orna Barbivai following months of negotiations.
Emirati trade minister Thani Al Zeyoudi said the deal had written “a new chapter in the history of the Middle East”. “Our agreement will accelerate growth, create jobs and lead to a new era of peace, stability, and prosperity across the region,” he said.
President of the UAE-Israel Business Council Dorian Barak said the trade deal defined tax rates, imports and intellectual property, which would encourage more Israeli companies to set up offices in the UAE, particularly in Dubai.
The Council predicts there will be almost 1,000 Israeli companies working in or through the UAE by the end of the year, doing business with South Asia, the Far East and the Middle East.
“The domestic market doesn’t represent the entirety of the opportunity. The opportunity is really setting up in Dubai, as many companies have, to target the broader region,” Barak said.
