Israel Agrees to First Ever Free Trade Deal with Arab Nation

Israel and the UAE reach historic free trade agreement. UAE Minister of State for Foreign Trade Dr. Thani bin Ahmed Al Zeyoudi (left) and Israeli Economy and Industry Minister Maj.-Gen. (Ret.) Orna Barbivay (right). Photo courtesy of Gideon Sharon and the Israeli Economy and Industry Ministry.

Israel has made history with several Arab nations in the last couple years thanks to the Abraham Accords. On Friday, the history-making continued with one Arab state in particular, as Israel reached a deal for a bilateral free trade agreement with the United Arab Emirates (UAE). The move will reduce customs on “almost all industrial goods” and ultimately result in mutual benefits for over 95% of the goods traded between the two nations, according to press releases from the Israeli Economy and Industry Ministry and the Prime Minister’s Office (PMO). After trade between Israel and the UAE reached almost $900 million in 2021, this deal sets them up for even more.

“This is an important moment in relations between the State of Israel and the UAE,” Israeli Prime Minister Naftali Bennett said in comments published by his office. “Today the good relations that have already been forged between the two countries are being strengthened in the form of a free trade agreement that will 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.”

The arrangement was made possible by the Abraham Accords peace deals signed between Israel and the UAE in September 2020. However, the trade agreement isn’t historic for Israel just because of politics. The UAE has the “second largest economy in the Arab world after Saudi Arabia and an import market worth hundreds of billions of dollars,” according to the Economy and Industry press release.

With those dollar amounts in the background, potential areas for trade and economic connection between Israel and the UAE are wide-ranging: energy, health, digitization, water desalination, agriculture, cyber, Fintech and more.

“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,” said Economy and Industry Minister Maj.-Gen. (ret) Orna Barbivay in the PMO press release. “The conclusion of the negotiations is a significant and historic milestone in bilateral relations.”

With the negotiations wrapping up, the two nations’ legal teams are set to review the agreement ahead of formal signing. In addition to the technical legal work, Barbivay noted the economic efforts for Israel aren’t finished yet either. “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.”

Among the noteworthy elements of the deal is the speed in which it took place. After signing the peace accord in 2020, negotiations on the free trade agreement began just over one year later in November 2021, with Bennett and UAE Crown Prince Mohammed bin Zayed in Abu Dhabi agreeing to “accelerate contacts” on the matter in December. After five months of talks, and four rounds of negotiations, history was made.

“We have succeeded, within a short time, in concluding wide-ranging and comprehensive

negotiations with a country with which we had no economic relations until 18 months ago,” said Economy and Industry Ministry Foreign Trade Administration Director Ohad Cohen in his ministry’s press release.

“The desire by both sides to conclude the negotiations quickly and efficiently, while maintaining the interests of both countries, proves that this is a long-term partnership that will continue to develop and expand into different areas.”

(By Joshua Spurlock,, April 3, 2022)

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