Trade between the Emirates and Israel exceeded $2.5 billion in less than two years, of which more than $1bn was recorded in the first quarter of this year, the UAE’s Minister of State for Foreign Trade said in Davos.
In September 2020, the UAE, Israel, Bahrain and the US signed the Abraham Accords peace agreement.
“Usually, the economy and the growth are always associated with peace and stability,” said Dr Thani Al Zeyoudi, during a discussion about the impact of the accords, at the World Economic Forum’s annual meeting in the Swiss resort.
“If we look at the numbers, what has been achieved in the last two years after the signing of the Abraham Accords, we are moving towards the right direction.
“In the last two years, the trade volume between UAE and Israel exceeded $2.5bn, this [in less] than two years. And only in the first quarter of 2022, we already exceeded $1bn, which means that this year, we’re going to exceed the $2bn.”
More than 65 deals and preliminary agreements have been signed between the UAE and Israel so far, he said.
“The expectation based on one of the surveys that has been conducted by the Israeli-UAE [Business] Council [is that] more than 1000 [Israeli] companies are going to be based [in the UAE] this year,” Dr Al Zeyoudi said.
A Comprehensive Economic Partnership Agreement (Cepa) between the two countries is set to be signed next week, which is forecast to boost the UAE’s economy by at least $2bn, he said.
The UAE signed a similar agreement in February with India, Asia’s third-largest economy, that is expected to boost non-oil trade between the two nations to $100bn in five years, from $60bn currently.
As part of the UAE's strategy to strengthen relations with key trading partners, it is currently in Cepa negotiations with Indonesia, the biggest economy in South-East Asia.
A similar deal is being negotiated with South Korea, which is expected to be finalised by the end of 2022. The agreement with South Korea aims to enhance the economic partnership between the two countries to a minimum of $20bn in the next three to five years.
“We are about to sign the free trade agreement between UAE and Israel, which has been concluded in less than four and a half months of [talks] in relations, which only diplomatically has [been going for] 18 months,” said Dr Al Zeyoudi.
“[This] sends a strong message that economy and trade are going to one of the main objectives of the Abraham Accords.”
Trade between the two countries is forecast to reach $5bn annually, he said.
“Next year or the year after, we are going to hit that [level] on [the back of] the free trade agreement. We are going to double, treble those numbers [eventually],” said Dr Al Zeyoudi.
Beyond trade, a key area of collaboration between the UAE and Israel is related to water scarcity, he said. There is also UAE investment in Israeli gas and in renewable energy.
The health sector is another important area, with agreements in the private sector expected to be announced soon.
“We are expecting huge investment in green developments of up to $500 million in the coming few years,” said Dr Al Zeyoudi.
During the discussion, Bahrain’s adviser on diplomatic affairs to the King of Bahrain, Sheikh Khalid bin Ahmed, a former foreign minister, outlined areas of co-operation between the Gulf country and Israel.
“We have a lot of talks with research centres, to work together between the young researchers [and] we have talks to open up in the health sector,” he said. “In many trade sectors, we are working very hard and things are moving also in the right direction.”
Sheikh Khalid said for the long-term success of the Abraham Accords, it is critical to do more to support the aspirations of the Palestinian people.
“First and foremost, to give the best push for our Abraham Accords to solidify, is to do more effort to help the Palestinians to achieve their aspirations and also to open up their potential for what they can do for their own country,” he said.
“I think if we do more effort in this regard, that will be very helpful and that will send a message to the rest of the world where the issue of Palestine is very alive.”
Sheikh Khalid said Bahrain is still committed to the Saudi-sponsored Arab Peace Initiative of 2002, in which Arab states offered Israel normalised ties in return for a statehood deal with the Palestinians and full Israeli withdrawal from territory captured in 1967.
“We have always maintained our position that we will help [the Palestinians] and support them in achieving their aspirations, statehood, independence, achieving whatever they will want to achieve for themselves, education of prosperity of enabling them to, you know, open up all their potential to build their own society,” Sheikh Khalid said.