Trade in traditional goods and unlocking the 'untapped potential of digital trade', this is what the UAE-Israel CEPA deal means, writes Abdulla bin Touq, UAE's Minister of Economy. Image Credit: Supplied

The UAE and Israel defied expectations for the second time in two years by signing a Comprehensive Economic Partnership Agreement (CEPA). This unprecedented deal reflects our steadfast belief that the future of peace, prosperity and stability in the Middle East can only be achieved by doing things differently.

As a natural next step to the Abraham Accords, this agreement will create a new paradigm for the region, accelerating growth as both nations put the pandemic in the rear-view mirror and look toward the promise of a new era. While bilateral trade between the UAE and Israel increased to a record-setting $1.4 billion in 2021, our economic partnership with Israel has the potential to surpass $5 billion this year and double in another five. Our strategic agreement will also help to double the UAE’s GDP by 2030 as we redefine our economic trajectory under the Projects of the 50 initiative.

The UAE-Israel CEPA will spark a wave of economic opportunities built around bytes and boxes. Traditional goods traded by ships, trucks, and planes will enjoy faster, frictionless market access to Israel and vice versa. The deal will simultaneously unlock the untapped potential of digital trade, cross-border data flows, data localization, blockchain, and the Fourth Industrial Revolution. It is an agreement not only for us, but for future generations across the Middle East as well.

Harness shared tech resources

Recognizing the strength of our digital economies, it was carefully structured to ensure both countries benefit from the expansion of new technologies in decades to come.

It will ensure we harness innovation – especially in renewable energy, hydrogen, space, technology, and digital sectors – as well as strengthen the resilience and reliability of local supply chains. To build stronger digital economies, we will implement high-standard, transparent, and facilitative regulations to create a secure environment for digital trade in all its forms to flourish.

Rich with startup opportunities

In Careem and Waze – acquired by Uber and Google, respectively – the UAE has already nurtured some of the region’s most successful stories. This agreement will build on our shared strengths as two of the world’s leading startup hubs outside of Silicon Valley. Greater synergies between our two entrepreneurial nations will provide a launch pad for next-generation startups to expand overseas, find new customers, test new services, attract new capital, share ideas, and deepen cooperation and collaboration.

This symbiotic relationship will help us break new ground in science, technology, and entrepreneurship, producing more homegrown success stories in the coming years. It will also define priority future industries such as space - the next frontier of business growth and human progress.

Lunar leap

We have already announced plans to collaborate on the Beresheet 2 lunar mission, which will plant our flags side by side on the moon. But there is so much more we can do together as we unlock the potential of the cosmos.

By sharing remote Earth-sensing satellite data, for example, we can better address food and water security. Cooperation here will improve our understanding and response to a range of climatic challenges, giving us invaluable information with which to boost crop yields and bolster environmental resilience. Green technology deals will multiply, and this is just the tip of the iceberg.

As the second trade agreement ever signed by the UAE, this CEPA offers unprecedented economic benefits for Israel and the UAE. By removing or reducing tariffs on up to 96 per cent of goods, it will drastically improve market access and drive substantial investment flows akin to what the UAE-India CEPA has done since coming into force.

It will also lock-in our economic recovery and add $1.9 billion to our GDP by 2030.

A rules-based approach

As protectionism and unilateralism threaten the stability of global trade, we will closely coordinate efforts to restore faith in a transparent, predictable, and rules-based multilateral framework for mutual prosperity. As others retreat from the world stage, the UAE and Israel understand that closer economic cooperation has never been so important to regional stability.

With more than 100 million young people in the Middle East, we have the largest demographic in our region’s history to transition to adulthood. The prudent and pragmatic policy is required to ensure the next generation – one that makes up half of the population in the Middle East and North Africa – has every opportunity to prosper.

Our agreement is for them – it is a deal of hope and opportunity. A deal that gives students, startups, entrepreneurs, business owners, workers, and professionals the confidence to know that their best days are ahead of them, that the chance to fulfil their aspirations can be achieved. It will create a new path for stability and prosperity that will deliver an enormous positive impact that reverberates around the region and the world.

Our CEPA with Israel is an unprecedented and historic agreement and a moment that defines our shared future. Together, we can achieve so much more in service of our peoples.