Israel And UAE Prepare To Sign Free Trade Deal

A free trade agreement is due to be signed between Israel and the UAE on May 31, according to the Israeli government.

A statement from the Ministry of Economy and Industry said the agreement would be “comprehensive, significant and groundbreaking” and would lead to 96% of trade between the two countries being given immediate or gradual tax exemption. It said it would cover trade in food and other agriculture goods, cosmetics, medicines and medical equipment, among other areas.

The agreement is expected to be signed during a trip by Israel’s economy and industry minister Orna Barbivay to the UAE. A statement from the Israeli government quoted Barbivay as describing it as a “free, full, first trade agreement with an Arab state”. Israel also has a preferential trade arrangement with Jordan and a customs union with the Palestinian Authority.

Relations between the two countries have developed rapidly over the past few years, since the signing of the Abraham Accords in 2020. High-level government delegations have travelled in both directions, as have numerous business groups – among the most recent was a delegation of healthcare officials from Abu Dhabi which visited the Biomed Israel Conference in Tel Aviv in recent days.

Israel-UAE bilateral trade was worth some $675m within the first ten months of signing the Abraham Accords in September 2020, according to Israeli officials, but a free trade deal could see that increase rapidly.

The process of reaching an agreement has been remarkably swift. In June 2021, the two governments issued a joint statement in which they said they had started talks on a free trade agreement.

In April this year, UAE minister of state for foreign trade Thani Al-Zeyoudi said talks on a Comprehensive Economic Partnership Agreement with Israel had concluded and it was now ready to be signed. At the time he said “This milestone deal will build on the historic Abraham Accords and cement one of the world’s most important and promising emerging trading relationships.”

The UAE government suggested at the time that the agreement would be signed “in the coming weeks”. It is not clear what has delayed that timetable.

Full details about the agreement are expected to be revealed when it is signed.