'Comprehensive and significant' bilateral free trade agreement signed by Israel and the UAE

Israel and the United Arab Emirates have completed negotiations on a bilateral free trade agreement marking the first-of-its-kind financial treaty between Israel and an Arab country in the Middle East, the Israeli Ministry of Economy and Emirati foreign trade minister announced on Friday.

Described as a “comprehensive and significant” agreement, the new deal covers 95% of traded goods between the two countries, including food products, agriculture, cosmetic products, medical equipment and medicine. Certain products are expected to be exempt from customs either immediately or gradually, Israel’s’ Economy Ministry said in a statement. 

The historic agreement defines issues regarding regulation and standards, customs, trade in services, cooperation, government procurement, electronic trade and maintaining trademarks.

Trade between the UAE and Israel continues to grow since the two states established diplomatic relations in 2020 as part of the Abraham Accords. Bilateral trade is expected to reach $2 billion by 2022, up 50% from 2021, according to estimates by the UAE-Israel Business Council.

Israeli Prime Minister Naftali Bennett said that the finalization of the agreement is an “important moment in relations between the State of Israel and the UAE.” Bennett expects the new deal to significantly upgrade economic cooperation for the benefit of the citizens of both countries. 

“There will be more trade, more jobs and good products at lower prices. At my last meeting with the Crown Prince, Sheikh Mohamed bin Zayed, in Sharm El-Sheikh, we agreed to accelerate the process and bring it to conclusion within days, and so it was,” Bennett said in a statement. 

UAE Foreign Trade Minister Thani Al Zeyoudi tweeted: “This milestone deal will build on the historic Abraham Accords and cement one of the world’s most important and promising emerging trading relationships.”

We have concluded talks on a Comprehensive Economic Partnership Agreement with Israel and it is now ready for signature. This milestone deal will build on the historic Abraham Accords and cement one of the world’s most important and promising emerging trading relationships. pic.twitter.com/WgYgJ1YiLD

— د. ثاني الزيودي (@ThaniAlZeyoudi) April 1, 2022

The agreement is expected to take effect following the signing by Economy and Industry Minister Orna Barbivai and her Emirati counterpart and the ratification process in the two countries. Barbivai referred to the treaty as “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,” Barbivai added. 

Foreign Minister Yair Lapid welcomed the agreement and said that it is in the spirit of the Negev Summit, which called for continuous regional cooperation.