Israel and the United Arab Emirates signed a broad economic pact that will eliminate most customs fees and help expand bilateral trade to more than $10 billion within five years, officials said.
The formal signing of the agreement comes less than two years after Israel and the Gulf Arab state forged full diplomatic ties. It was negotiated earlier this year.
The pact is the fastest free trade agreement to be signed in Israeli history, Prime Minister Naftali Bennett said in a tweet, describing it as the first of its scope to be signed between his country and an Arab nation.
The UAE is working to close more trade deals as it seeks to deepen its ties with fast-growing economies and draw billions of dollars in foreign investment, a UAE official told Bloomberg earlier this year. The Israel deal is expected to boost bilateral trade to more than $10 billion within five years, and add $1.9 billion to the UAE’s gross domestic product within the same period, UAE state-run WAM news agency reported.
The Gulf nation signed a similar agreement with India in February and has started talks with former regional foe Turkey on the topic.
The Israel deal, which covers items ranging from fertilizers to pharmaceuticals, will eliminate customs fees on 96% of the items traded between the two countries, Israel’s Economy Ministry said.
“On the export side, the agreement is expected to give Israeli companies a competitive advantage and facilitate the activity of businesspeople in the Emirati market” the ministry said. “The agreement will help reduce the cost of living by lowering import costs to Israel.”
The accord also aims to promote trade in e-commerce and computing. It includes agreements on the protection of intellectual property, patents and copyrights.
The pact grants mutual access to the government procurement market, and in some tenders, suppliers from both countries will be able to participate on equal terms to those awarded to local suppliers, the Israeli Economy Ministry said.
The agreement “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,” UAE Minister of Economy Abdulla Bin Touq said.
