The UAE and Israel have signed a comprehensive economic partnership agreement (CEPA) on May 31.
The UAE-Israel CEPA, the second bilateral trade agreement signed by the UAE, offers economic benefits to both countries by lowering or eliminating tariffs on more than 96 per cent of tariff lines and 99 per cent value of trade, enhancing market access for exporters, attracting new investment, and creating opportunities in key industries, including energy, environment, and digital trade.
The deal will also support service sectors such as hospitality, financial services, distribution, and construction and provide a platform for SMEs in both countries to expand internationally, official news agency WAM reported.
The agreement is also expected to advance bilateral trade beyond $10bn within five years and add $1.9bn to the UAE’s GDP within the same time period.
UAE Minister of Economy Abdulla Bin Touq said, “This CEPA with Israel will create a new paradigm for the region. It will accelerate growth and underscores a shared belief that the only way to build resilient and sustainable economies in a complex world is by doing so together. It also symbolises something greater than business: the importance of building meaningful partnerships. Our agreement can demonstrate to nations and governments around the world that cooperation and dialogue are the best ways to transform challenges into opportunities.”
Major General (Retd) Orna Barbivai, Minister of Economy and Industry for the State of Israel stated: “This is a visit of strategic importance for economic relations between Israel and the UAE. Together, we will break down obstacles and we will advance comprehensive trade and new technologies that will serve as a basis for our shared path, contribute to the benefit of our citizens and make it easier to do business. This is the first full free trade agreement made with an Arab state, that is happening such a short time after the establishment of diplomatic relations.”
The agreement builds on the growth in trade and investment between the two countries since the signing of the Abraham Accords. From September 2020 to March 2022, non-oil trade surpassed $2.5bn.
Dr. Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, said, “By establishing diplomatic ties in 2020, the UAE and Israel embarked on a new era of regional trade, investment, and exchange. The UAE-Israel Comprehensive Economic Partnership 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.
In 2021, as part of its Projects of the 50 initiative, the UAE embarked upon a programme of enhancing bilateral trade relations with key global partners. The new agreement is the second such accord for the UAE following the partnership agreement with India this year.
Read: UAE and India sign Comprehensive Economic Partnership Agreement
The UAE is seeking to grow economic ties with Israel to more than $1tn over the next decade, Economy Minister Abdulla Bin Touq said last year.
Read: UAE seeks $1 trillion in business with Israel over next decade
Also last year, the UAE also announced the establishment of a $10bn fund aimed at strategic sectors in Israel.
Read more: UAE announces $10bn investment fund with Israel