Israel and the United Arab Emirates finalized a free trade agreement on May 31, establishing the first such pact between Israel and an Arab country. The deal, which eliminates tariffs on 96% of goods, follows the 2020 Abraham Accords that normalized relations under U.S. mediation.
UAE envoy Mohamed Al Khaja described the agreement as an "unprecedented achievement," emphasizing its potential to boost trade, create jobs, and expand collaboration in sectors like renewables and life sciences. Israeli Prime Minister Naftali Bennett and UAE President Sheikh Mohamed bin Zayed al-Nahyan advanced negotiations in March, with trade projections rising from $900 million in 2021 to over $5 billion within five years.
The agreement comes amid renewed tensions over Israel’s 1967 capture of east Jerusalem, which sparked a nationalist flag march in the city’s Old Quarter. The UAE condemned Israel’s actions at Al Aqsa Mosque, a key Islamic site, while Israel’s 1980 annexation of East Jerusalem remains internationally unrecognized.
The deal expands Israel’s existing trade agreements with the U.S., EU, and other nations. It also aligns with broader Gulf-Israel ties, including a February 2022 pact with Morocco designating industrial zones. However, the agreement faces scrutiny over its impact on Palestinian rights and regional stability.
