Strengthening the UAE-Israel partnership

The Comprehensive Economic Partnership Agreement (CEPA) between the UAE and Israel entered into effect on April 1, 2023, the latest step in the two countries burgeoning relations since the Abraham Accords, which heralded greater economic and trade integration nearly three years ago.

Since the historic formation of diplomatic ties in September 2020, top officials from the UAE and Israel have exchanged visits and signed several bilateral agreements. The two countries’ relationship has evolved swiftly over the years amid increased cooperation in the finance, energy, security, technology and water security sectors.

The UAE and Israel seek to advance bilateral non-oil trade from the $1.3bn recorded in 2021 to $10bn by the end of the decade. The two countries are also expanding their ties beyond bilateral trade.

Speaking to us at the Motivate Media Group offices, Zaslansky weighed in on the strengthening relationship between the UAE and Israel, trade and economic opportunities between the two countries and the development in priority sectors, including healthcare, agritech, advanced technologies and energy. Here are excerpts from
the discussion.

Relations between the UAE and Israel have gone from strength to strength since the signing of the Abraham Accords almost three years ago. Which are the areas that have benefitted the most because of stronger ties between the two nations?

The establishment of diplomatic ties between Israel and the UAE is creating strategic opportunities in almost every aspect of the non-oil economy from tourism and aviation to finance and technology among others.

The trade figures between the two countries, which smashed expectations in 2022, have been phenomenal even before CEPA came into effect.

Going forward, tourism will remain the fast-growing and one of the best-performing industries following an agreement to increase daily flights between Israel and UAE, the inauguration of visa-free travel and the opening of kosher restaurants to cater to the growing Jewish population in Dubai and Abu Dhabi. On the cooperation front, there’s growing collaboration between companies and institutions in both countries across all sectors.

What does the opening of the Abrahamic Family House in Abu Dhabi represent to the Jewish community in the UAE and Israel? Why is it key to promoting the message of amity, tolerance and peace?

The Abrahamic Family House opened its doors to visitors on March 1, 2023. The opening of the multi-faith place of worship holds historical significance as the home of the first purpose-built synagogue in the UAE and the first built in the Arab world in nearly a century.

It demonstrates the UAE leadership’s deep commitment to coexistence and tolerance, which are among the leading values of the country and are at the heart of the Abraham Accords.

The multi-faith place of worship has the potential to be something greater: a global centre for pluralism, culture, education and engagement; a centre for interfaith education, research and engagement; a place that creates links between Jewish, Arab and Christian communities in the UAE, across the Arab world and globally. To the Jewish World, the Abrahamic Family House is a place of tolerance and a place where everyone can feel at home.

Tell us about the collaboration and knowledge sharing between leading Israeli and UAE institutions. Give us some examples.

There is growing collaboration between Emirati and Israeli organisations, companies and institutions since the signing of the Abraham Accords in 2020.

KSM Maccabi signed multiple MOUs with different leading health entities in the UAE with a joint goal to bring new knowledge to the world. Together with those entities they will expand research in multiple domains such as big data research, genetics and clinical trials and will bridge the entire ecosystem to a much more diverse population.

The UAE and Israel are the strongest innovation hubs in the Middle East. Israel has a vibrant tech ecosystem such as the country’s drip agriculture micro-irrigation which bonds well with the UAE’s push to drive development through innovation.

Cooperation between Israeli and Emirati entities is yet to expand into the education sector and going forward we hope to see more collaboration between universities in basic research, applied research and joint development.

The UAE ratified its CEPA with Israel in March. How will the two countries benefit from the removal of trade tariffs?

Israel and the UAE signed the CEPA into effect earlier in April, removing tariffs on about 96 per cent of goods traded between the countries.
In addition to removing tariffs, Israeli companies will gain access to government tenders in the UAE, a positive move that will create more industries and cooperation between businesses from the two nations.

Which sectors (in addition to software, diamonds, defence and security) do you expect will benefit from the CEPA?

CEPA also will reassure investors on both sides regarding the stability of their financial transactions, and therefore increase investments in startups, private equity etc. in various sectors, such as energy, finance, water and healthcare.

There are also opportunities on the logistics front as well and Israeli companies that ship through Dubai benefit from significant cost savings.

The bilateral trade of goods between the UAE and Israel in January this year reached $264.4m compared to $138.9m in January 2022. With this robust rise, how do you envision the volume of trade growing in 2023 and beyond?

The bilateral trade of goods (excluding software) between the UAE and Israel for the first two months of the year, rose by 76.5 per cent to $540.6m compared to $306.2m for the same period of 2022. Bilateral non-oil trade between the two countries reached $2.49bn in 2022, up 90 per cent from 2021 figures while re-exports from Israel grew by 71.2 per cent and non-oil exports to Israel surged to 48.6 per cent.

With the CEPA coming into effect, the value of bilateral trade between the two countries is expected to more than double what has been achieved since the signing of the Abraham Accords. We are eagerly waiting to see half-year statistics in June to examine the impact of the free trade agreement and the trajectory that bilateral trade between the two countries is going forward, with the UAE’s Ministry of Economy projecting that trade will be doubled in the next five years.

In 2022, we forecasted that trade between Israel and the UAE would cross the $2bn threshold but instead, trade eclipsed our projections to close the year at $2.57bn and this trajectory will continue to grow.

Are there challenges that companies/ businesses face when trying to establish operations in either of the two countries?

Challenges come with every new relationship. The business culture in the two jurisdictions is different, there are differences in regulations and other related issues that require the attention of the respective governments and relevant institutions.

The mutual recognition of driver’s licences in the two countries came into force in March, making it easier for Israelis to come and drive themselves in the UAE – this is just a small example. So, Israeli businesses that open here and conversely, UAE businesses that open in Israel have both shared how helpful people have been on both sides which has led to seamless set up experiences.

Companies and entities are receiving assistance from authorities such as the Dubai International Financial Centre where the Consulate General of Israel in Dubai is located.
One of Israel’s biggest digital payments firms Rapyd opened its doors for business in Dubai in December 2021 and a year later, Israeli chef Eyal Shani brought his North Miznon brand to the UAE. These are the success stories that we are sharing with other companies and startups that are considering expanding into the GCC market.

There are currently 16 daily flights between Israel and the UAE. In your opinion, how has this bolstered tourism and aviation in both countries?

The 2020 Abraham Accords opened up travel and tourism between the UAE and Israel. The latest data from Dubai Tourism shows that the number of visitors from Israel increased by 212 per cent to 85,000 in the first two months of the year.

Abu Dhabi received a significant number of Israeli tourists during the same period with 9,000 visitors checking into its hotels – the 11th-largest source of visitors to the city and 1,000 behind Saudi Arabia. The flights between Israel and the UAE are always full. Israel is looking forward to welcoming more tourists from the Emirates to Israel.

Oman recently opened its airspace to Israeli airlines in February, how do you see this development benefitting Israel’s aviation sector and economy?

The signing of the Abraham Accords opened the GCC airspace to Israeli carriers, which has reduced flight time for Israeli travellers going to destinations in Asia.

First was Saudi Arabia which opened its airspace to all airlines in July 2022 and the historic move by Oman is expected to pave the way for Israeli carriers such as El Al Israel Airlines (El Al), Israir and Arkia to expand deeper into the Southeast Asia market such as Japan.

Beyond shortening current flight times, the opening of Oman’s airspace will potentially allow Israeli airlines such as flag carrier El Al to explore new routes to Australia and restart flights to India from its hub at Ben Gurion International Airport. It will also reduce the cost of doing business for Israeli companies considering expanding in Asian and Oceania markets.