Israel’s Historic Free Trade Agreement with the United Arab Emirates: Strengthening Economic Ties in the Middle East and North Africa

2023-07-16 14:29:41

On May 31, 2022, Israel concluded its first free trade agreement with an Arab country, the United Arab Emirates, in Dubai. The agreement is the nineteenth of its kind for Israel, which seeks to strengthen its economic ties with other countries in the Middle East and North Africa, including Egypt, Morocco and Saudi Arabia.

This agreement follows the normalization of diplomatic relations between Israel and the United Arab Emirates, which took place in 2020 within the framework of the Abraham Accords, under the aegis of the United States. These agreements have also allowed Israel to normalize its relations with Bahrain and Sudan. At an economic conference in Bahrain, Israeli Economy Minister Nir Barkat affirmed his desire to strengthen economic and trade cooperation with Morocco and other countries in the region. The conference also brought together senior officials and experts from Morocco, the United Arab Emirates (UAE), Egypt, Sudan and the United States (US).
The conference was part of the “N7” initiative, supported by American research institutes, which aims to promote regional free trade between Israel and Arab countries. A report will be released in October proposing a plan for a tripartite agreement between Israel, the United Arab Emirates and Bahrain, according to William Wechsler, the initiative’s senior project manager. He also indicated that negotiations were underway with Jordan for a long-term agreement.
Since resuming diplomatic relations at the end of 2020, Israel and Morocco have significantly increased their economic cooperation. The two countries have signed several bilateral agreements in various sectors, including economy and defence. Shai Cohen, the former head of Israel’s liaison office in Rabat, announced last month that Israel was considering signing a free trade agreement with Morocco that might generate more than $1 billion in three years.
The free trade agreement between Israel and the United Arab Emirates aims to eliminate customs duties, facilitate trade in goods and services, protect investments, promote cooperation in various fields such as innovation , energy, the environment or even health. It is expected to increase the volume of trade between the two countries, which was around $600 million in 2021.

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