Israel and the United Arab Emirates on Friday announced the conclusion of negotiations on a historic, comprehensive bilateral free-trade agreement.
The agreement, negotiated by Economy and Industry Minister Orna Barbivay and UAE Minister of State for Foreign Trade Dr. Thani bin Ahmed Al Zeyoudi, is the first full free-trade agreement between Israel and an Arab country, according to the Economy and Industry Ministry.
“[Some] 95% of the goods traded between the two countries are included in the agreement and will be exempt from customs either immediately or gradually: food products, agriculture, cosmetics, medical equipment, drugs and more,” the statement continued.
Israeli Prime Minister Naftali Bennett called the conclusion of negotiations “an important moment in relations between the State of Israel and the UAE.”
Barbivay called the completion of negotiations a “historic milestone.”
“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. The conclusion of the negotiations is a significant and historic milestone in bilateral relations,” she said.
The Abraham Accords, which were signed in September 2020, are the basis for diplomatic relations between the State of Israel and the UAE. One year later, in November 2021, negotiations began on a bilateral free-trade agreement and continued for five months.
The matter was discussed by Bennett and Crown Prince Mohammed bin Zayed in Abu Dhabi last December when it was agreed to accelerate contacts ahead of the signing and again at their meeting in Egypt last week, where the leaders agreed to complete the agreement within days.
According to the Economy and Industry Ministry statement, “Relations between Israel and the UAE have great economic potential in a range of areas due to—inter alia—the geographic and cultural proximity between the peoples and the unique characteristics of the UAE, which has the second-largest economy in the Arab world after Saudi Arabia and an import market worth hundreds of billions of dollars with technology goods and advanced solutions in which Israel has a comparative advantage constituting a considerable share.”
Since the signing of the Abraham Accords, trade between the two countries has increased, reaching nearly $900 million in 2020, the statement continued.
“The potential for trade between the two economies is much greater and includes many fields such as energy, health, digitization, medical equipment, water (desalination, purification, conservation and smart management), agriculture, cyber, fintech and diamond exports.”
The agreement will now be “evaluated from a legal perspective” before being signed by the ministers and ratified by each country, after which it will take effect, according to the statement.