WHY IN NEWS?
On October 20, 2020, Israel and the UAE announced a mutual visa exemption agreement, allowing Israeli and Emirati citizens to travel visa-free to each other’s countries.
History of UAE – ISRAEL relationships:
Sheikh Zayed bin Sultan Al Nahyan, the UAE’s first president after the country gained independence in 1971, referred to Israel as “the enemy” of Arab countries. Uzi Landau, Israel’s Minister of National Infrastructure , attended a renewable energy conference in Abu Dhabi on January 16, 2010. He was Israel’s first minister to visit Abu Dhabi. Israel’s Energy Minister visited the UAE in January 2016, visiting the International Renewable Energy Agency headquarters in Abu Dhabi. In September 2018, the UAE hosted secret talks in Abu Dhabi between Israeli and Turkish officials to discuss the resumption of bilateral relations. Israel announced in April 2019 that it has been invited to participate in Dubai’s Expo 2020 innovation fair. On December 13, 2021, Israeli Prime Minister Naftali Bennett visited the UAE and met with Abu Dhabi Crown Prince Mohamed bin Zayed Al Nahyan. This was the first meeting between leaders from both countries. The meeting, which included a shared lunch, lasted two hours longer than planned. The meeting, according to Bennet, was about “the region, our economy, and technology.”
WHAT HAS OCCURED
On Tuesday, Israel signed a free trade agreement with the United Arab Emirates. It is the first with an Arab state, and it eliminates most tariffs with the goal of increasing annual bilateral trade to more than $10 billion.
After months of negotiations, it was signed in Dubai by Minister of Economy and Industry Orna Barbivai and her counterpart, UAE Minister of Economy Abdulla Bin Touq Al Marri.
ABOUT THE DEAL
The UAE predicted that the comprehensive economic partnership agreement would increase bilateral trade to more than $10 billion in five years. According to official Israeli data, emirati-Israeli trade stood at $1.2 billion in 2021. Tariffs will be eliminated or reduced on 96% of goods traded between the countries. Tariffs on goods such as food, medicine, diamonds, jewellery, fertilisers, and other chemicals will be reduced. Most duties will be eliminated immediately, while others will be phased out over the next 3-5 years. Some products will continue to be subject to customs tariffs, albeit at a reduced rate.
EFFECT OF THIS DEAL
The deal, according to Emirati Trade Minister Thani al Zeyoudi , has written “a new chapter in the history of the Middle East.””Our agreement will accelerate growth, create jobs, and usher in a new era of peace, stability, and prosperity throughout the region,” he tweeted. According to Dorian Barak, president of the UAE-Israel Business Council, the trade agreement defined tax rates, imports, and intellectual property, which would encourage more Israeli companies to set up offices in the UAE, particularly in Dubai. According to the council, by the end of the year, there will be nearly 1000 Israeli companies operating in or through the UAE.
