The UAE and Israel signed a Comprehensive Economic Partnership Agreement (Cepa) on Tuesday in a move aimed at boosting non-oil trade and investment between the two countries.
The trade and investment pact will push the value of non-oil bilateral trade to more than $10 billion within five years, Dr Thani Al Zeyoudi, the UAE’s Minister of State for Foreign Trade, said on Twitter.
“With the #UAEIsraelCEPA signed, sealed and delivered, we have written a new chapter in the history of the Middle East,” Dr Al Zeyoudi said.
“Our agreement will accelerate growth, create jobs and lead to a new era of peace, stability and prosperity across the region.”
The agreement comes after the UAE and Israel normalised relations in September 2020, which led to dozens of initial pacts in sectors ranging from aviation to technology.
Israel and the UAE began negotiations for a trade and economic co-operation deal in November 2021, with talks concluding in April.
The deal marks the UAE's second Cepa after it signed a similar pact with India in February. It is in trade talks with several other countries, including Indonesia and South Korea.
The Cepa deal, signed after several months of discussions, is Israel's first major trade pact with an Arab nation.
The agreement “builds on the strong foundations laid by the Abraham Accords,” Dr Al Zeyoudi said in the tweet.
Under the deal, tariffs will be eliminated on 96 per cent of goods that generate about 99 per cent of export earnings, according to a Ministry of Economy statement.
The deal is expected to create new opportunities in key sectors such as energy, environment and e-commerce.
It also covers sectors including hospitality, financial services, distribution and construction while enabling small-and-medium businesses in both countries to expand abroad.
The pact was signed by Abdulla bin Touq, UAE Minister of Economy, and Orna Barbivai, Israeli Minister of Economy and Industry, at the UAE Ministry of Economy's headquarters in Dubai.
"The UAE continues to take bold steps to advance our economy and enhance our status as a regional hub for trade, investment, and the industries of the future," Mr bin Touq said. "This Cepa with Israel will create a new paradigm for the region."
The Cepa is expected to boost bilateral trade beyond $10bn within five years and add $1.9bn to the UAE’s GDP within the same time period. Total UAE exports are expected to increase 0.5 per cent by 2030.
From September 2020 to March 2022, non-oil trade between Israel and UAE exceeded $2.5bn, the ministry said.
Non-oil trade reached $1.06bn in the first three months of 2022 – five times the total from the same period in 2021.
The agreement "will further catalyse economic activity and, importantly, create new research and investment opportunities in agri-tech, renewable energy, and advanced technology, which are priority sectors for both countries," Dr Al Zeyoudi said in the statement.