The agreement aims to advance bilateral trade and is expected to add $1.9 billion to the UAE’s GDP over the same period.

The landmark UAE-Israel Comprehensive Economic Partnership (UAE-Israel Cepa) agreement, which was signed on Tuesday, is expected to boost bilateral trade to more than $10 billion within five years, more than a sevenfold increase from compared to $1.4 billion. trade in 2021.

Abdulla bin Touq Al Marri, Minister of Economy of the United Arab Emirates; and Major General (Retired) Orna Barbivay, Minister of Economy and Industry of Israel, signed the UAE-Israel CEPA in Dubai, marking a new era of cooperation between the two nations that established diplomatic relations in September 2020.

The agreement aims to advance bilateral trade and is expected to add $1.9 billion to the UAE’s GDP over the same period.

Al Marri said that under the guidance of the UAE leadership, the nation continues to take bold steps to advance the economy and strengthen the country’s status as a regional hub for trade, investment and trade. industries of the future. “This Cepa with Israel will create a new paradigm for the region. This will accelerate growth and underscores a shared belief that the only way to build resilient and sustainable economies in a complex world is to do it together,” the minister said.

“Cepa also symbolizes something bigger 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 turn challenges into opportunities,” Al Marri said.

The visit of Israeli Minister Barbivai is of strategic importance for economic relations between Israel and the United Arab Emirates. “Today, we signed a CEPA and advanced a series of economic partnerships. Together, we will break down barriers and advance global trade and new technologies that will serve as the foundation of our common path, benefit our citizens and facilitate business. This is the first comprehensive free trade agreement with an Arab state, which occurs so soon after the establishment of diplomatic relations,” Barbivai said.

Barbivay said the agreement aims to provide long-term certainty for businesses and service providers, establishing mechanisms for cooperation and reducing barriers to trade in services. “Several sectors are covered, allowing market access in various areas such as business and professional services, research and development, IT services and environmental services,” she said.

“Cepa will have a cross-sectoral impact, with a significant impact on sectors of fundamental interest and strategic plans of both countries such as water, energy, health, education, FinTech and cyber”, Barbivay said, adding that he will also create a collaborative framework that will be promoted through the recently launched Israel-UAE R&D fund, business delegations and seminars, and the exchange of expertise and know-how .

“It also lays the groundwork for enhanced collaboration between the private sectors and entrepreneurs on both sides. These collaborations have great potential to further develop bilateral trade across all sectors, laying the groundwork for future initiatives and the utilizing the opportunities that CEPA presents,” Barbivay said.

The agreement builds on the exponential growth in trade and investment that the UAE and Israel have enjoyed since the signing of the Abraham Accords. From September 2020 to March 2022, non-oil trade exceeded $2.5 billion, while it reached $1.06 billion in the first three months of 2022, five times the total for the same period in 2021.

Dr. Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, said the agreement will also open doors to new export opportunities in services and service-related sectors.

He said the latest Cepa, the second bilateral trade agreement signed by the UAE, brings unprecedented economic benefits to both sides by lowering or eliminating tariffs on more than 96% of tariff lines and 99% of the value of trade, thereby improving market access for exporters. , attracting new investment and creating opportunities in key sectors including energy, environment and digital trade.

“The agreement will also support service sectors such as hospitality, financial services, retail and construction and provide a platform for SMEs in both countries to expand internationally.”

“By establishing diplomatic relations in 2020, the UAE and Israel have embarked on a new era of regional trade, investment and exchange. The Comprehensive Economic Partnership Agreement between the UAE and Israel will further catalyze economic activity and, above all, will create new research and investment opportunities in agro-technology, renewable energies and cutting-edge technologies, which are priority sectors for the two countries,” said Al Zeyoudi.

“Over the past 18 months, our nations have demonstrated what can be achieved when we put aside our differences and, as we emerge from the challenges of the global pandemic, the United Arab Emirates and Israel believe that multilateral approaches are needed. to rebuild supply chains, reinvigorate economies and restore confidence. We are confident that this agreement will usher in a new era of regional economic success,” Al Zeyoudi said.

The UAE-Israel CEPA is part of a series of bold initiatives the UAE has launched to build a stronger and more resilient economic future and drive the post-Covid-19 global recovery. In 2021, as part of its Projects of 50 initiative, the UAE launched a program to strengthen bilateral trade relations with key partners around the world. The UAE-Israel CEPA is the second bilateral trade agreement concluded by the UAE after the UAE-India CEPA, which entered into force on May 1.

“This CEPA comes at a critical time for the global economy. The world is beginning to emerge from the global pandemic, but challenges remain, not least because conflict and inflation threaten to stall the global recovery,” Al Zeyoudi said.

“The historic agreement will help facilitate the efficiency of the global supply chain, including for agricultural and food products, which would have an impact on food security. It would also help facilitate the movement of natural persons, by particularly the business world”, explained the Minister.

“The United Arab Emirates and Israel are now ready to build on solid foundations [of the diplomatic relations based on the Abraham Accords signed in 2020] to bring a new era of opportunity and enterprise to our people – and establish a model of mutual respect, tolerance, open and frank speech and unity of thought and action,” said Al Zeyoudi.

He said the deal will also open doors to new export opportunities in the services and related services sectors, he said.

Cepa provides better market access for key products from the UAE to Israel, such as aluminum, petrochemicals and polymers such as ethylene and propylene. The agreement also guarantees more favorable access for UAE companies to the Israeli services market, such as business services, communication services, distribution services, environmental services, financial services, tourism and travel and transportation services, Al Zeyoudi said.

“Israel will not offer an export subsidy on products destined for the UAE to ensure fair competition with UAE products. Israel will offer the UAE additional distribution services, which it has not offered to other other business partners,” Al Zeyoudi revealed.

The Minister said he was convinced that “this will have a major catalytic effect on mutual investment flows, which is one of the main objectives of our Cepa programme”.

Abraham Accords has already launched mutual investment platforms, including Abraham Fund, which will leverage $3 billion in private sector-led investment and development initiatives, he noted. The first-ever Abu Dhabi Investment Office (ADIO) overseas office in Tel Aviv and the Dubai Investment Development Agency’s Memorandum of Understanding with the Association of Manufacturers of Israel to explore investment opportunities are similar initiatives in this direction, Al Zeyoudi pointed out.

The CEPA will also allow investment flows in tourism infrastructure projects and open more flights between the two countries, Al Zeyoudi said, adding that daily flights between Dubai and Tel Aviv will begin next month.

CEPA also provides better market access for UAE services exports, of which travel and aviation will be major beneficiaries, he said.

“Business travel will pick up speed as more Israeli companies open here and Israeli companies attend conferences and events – which started with Expo 2020 Dubai. obviously, in terms of visitor numbers, the Abraham Accords have created the biggest change that the UAE has welcomed over 250,000 Israeli visitors by the end of 2021, and this figure will only increase once that we will be completely out of Covid,” Al Zeyoudi said.

Visa-free entry for all UAE nationals to Israel, the start of daily Emirates flights between Dubai and Tel Aviv in June, Etihad Airways and Wizz Air offering direct flights from Abu Dhabi to Tel Aviv-Yafo also contribute to stimulating tourist traffic between the two countries. , said the minister.

The minister said CEPA is a wide-ranging agreement designed to uplift all sectors of industry – this is evident from the near-uniformity of tariff reduction.

However, it is clear that the two economies have similar priorities such as renewable energy, health care, advanced technologies, water and food security, logistics and transport, and space sciences.

Since the signing of the Abraham Accords, there have been a series of memorandums of understanding and significant investments in these sectors, Al Zeyoudi said.

—issacjohn@khaleejtimes.com