The Abraham Accords are already starting to pay off. Big time.
Trade between the United Arab Emirates and Israel has reportedly reached $272 million since the normalization between the countries in September with approximately two thirds of the bilateral trade consisting of Emirati exports to Israel.
The UAE’s main imports from Israel include high-tech devices, diamonds, mechanical and medical equipment, fruits and vegetables while its export to Israel consisted of smart phones, perfumes, diamonds and engine spare parts.
Sultan bin Sulayem, chairman of Dubai’s Ports, Customs and Free Zone Corporation, emphasized that the bilateral trade between Israel and the UAE benefits both countries, as well as businesses throughout the Middle East.
“The expansion of trade and investment between the two sides will benefit not only the business communities in the UAE and Israel, but also other stakeholders and business communities in the Middle East,” bin Sulayem said.
He estimated that the bilateral trade would generate more than 15,000 new job opportunities.
While these numbers are impressive, it is likely only the beginning of the growing Emirati-Israeli trade. In September last year, Israeli Intelligence Minister Eli Cohen predicted that annual bilateral trade between the countries would reach $4 billion within three to five years. If realized, it would be an impressive achievement by any standards. By comparison, annual bilateral trade between Israel and the United Kingdom, one of Jerusalem’s most important and established European trade partners, exceeds $7 billion.
Ahmed Mahboob Musabih, director-general of Dubai Customs, said the UAE and Israel are both well positioned to generate future growth opportunities due to the countries’ “exceptional competitive advantages that place them in a good position to promote win-win cooperation between each other’s business communities.”
Despite the pandemic and Israel’s third lockdown, trade continues to grow between the UAE and Israel. Consisting largely of desert and being forced to import approximately 80% of its agricultural consumption, amounting to more than $10 billion in 2018, the UAE has expressed a strong interest in Israel’s cutting-edge agriculture technologies.
In January this year, the Israeli agritech company Vertical Field signed an agreement with Emirates Smart Solutions & Technologies, a company that focuses on innovative agricultural projects in the Persian Gulf region. Based in the Israeli city Raanana, Vertical Field specializes in vertical farming. Under the agreement, Vertical Field will deploy pilot vertical farms in preparation for eventual full-scale deployments in the UAE. The Israeli company says its vertical farming technology is more efficient than traditional agricultural methods and utilizes 90% less water.
The global vertical farming market was worth approximately $2.9 billion in 2020 according to Markets and Markets. It is expanding rapidly and is projected to reach $7.3 billion by 2025. The Israeli vertical field technology addresses UAE’s challenges of limited availability of agricultural land, water and rising costs of shipping food.
The emerging marriage between Israeli technological innovation and Emirati financial wealth appears to have a great growth potential. However, aside from the ongoing pandemic, stark cultural differences could present challenges for Emirati and Israeli businesses. Israeli culture and business practices are characterized by informality and directness that could potentially intimidate Emiratis who are used to a polite and formal culture.
Prior to the launch of direct flights between Israel and Dubai, Israeli Prime Minister Benjamin Netanyahu reportedly expressed concerns that some Israeli tourists would misbehave in Dubai. Addressing these considerable cultural differences between Israel and the UAE will therefore be a key to successful future bilateral trade.
The All Israel News Staff is a team of journalists in Israel.