UAE and Israel set to sign trade and investment deal this month

The Emirates' envoy to Israel says the agreement with Israel will serve as a 'catalyst' for greater economic prosperity

The UAE and Israeli flags at Expo 2020 Dubai. The two countries started negotiations for a trade pact in November last year. AFP

The UAE and Israel are set to sign a trade and economic co-operation agreement this month as the two nations continue to boost bilateral commerce and investment.

“After India and Indonesia, the #UAE and #Israel are looking forward to conclude the Comprehensive Economic Partnership Agreement (CEPA) before the end of the month,” Mohamed Al Khaja, the UAE’s ambassador to Israel, said on Twitter on Wednesday.

“The UAE remains confident that the CEPA with Israel will serve as a catalyst for even greater economic prosperity.”

Israel and the UAE started negotiations for a trade and economic co-operation deal in November, a couple of months after the Emirates launched similar discussions with India.

The pact has the potential to propel Israel on to the list of the UAE’s top 10 trading partners and will significantly boost trade and investments between the two countries, Hamad Buamim, president and chief executive of Dubai Chambers, told The National on March 1.

Earlier this month, the UAE signed a similar agreement with India that is expected to boost non-oil trade between the two countries to $100 billion in five years, from $60bn currently.

A deal with Israel will be “much smaller” in scale but slightly different from a pure trade deal as “it is about transfer of technology” and collaboration in different strategic areas, Mr Buamim said at the time.

Relations between the UAE and Israel have strengthened since the two countries formally established diplomatic ties in September 2020.

Trade between the countries reached $700 million within a year of the major agreement as they expanded co-operation in sectors such as aviation and finance.

Dubai's non-oil trade with Israel reached about Dh2bn in the first half of 2021.

The UAE, the Arab world’s second-biggest economy, has made a strong recovery from the coronavirus-induced economic slowdown and has maintained strong trade momentum despite pandemic-related uncertainties.

The country’s exports are projected to expand at an average annual rate of more than 6 per cent to Dh1.1 trillion ($299bn) by 2030, as it continues to diversify its economy away from oil, Standard Chartered said in a report this month.

The UAE is further strengthening relations with key trading partners. It is currently in CEPA negotiations with Indonesia, the biggest South-East Asian economy.

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.