Dubai expo
Set for a liftoff - that is what Israel and UAE will be hoping for from October. A series of deals are expected to be signed, smoothing trade and investment flows. Image Credit: Supplied

Dubai: UAe and Israel are looking to the Expo in October to boost bilateral trade, which now stands at around $712 million. While the figure, contained in Israeli data, is tiny compared to UAE exports of $24 billion in 2019 to its top destination Saudi Arabia, the Israeli government sees trade with the UAE rising to $1 billion by year-end.

Israel is aiming for $3 billion in three years. The UAE last August became the first Gulf state to normalise ties with Israel. The bulk of trade between the UAE and Israel, which have similar GDPs of around $400 billion, has involved imports from the Gulf's dominant logistics and re-export hub, including plastics, electronics, auto parts and gems.

Israel recorded $457 million of imports from the UAE between January 2020 and June this year, and $255 million in exports to the UAE, its Central Bureau of Statistics said. Dubai said in January that bilateral trade since September 2020 stood at $272 million.

Zeev Lavie of the Israeli Chambers of Commerce (FICC) said normalisation had expanded Israeli trade within the wider Middle East via the UAE. "We're becoming much more regional," he said. Israel has traditionally exported to Arab countries via other states, or through complex structures outside the region.

Lavie said the UAE pact was encouraging trade with Egypt and Jordan, with which Israel has had peace deals for decades. "A lot of the business community in those countries have seen that, no, it's okay to do business in Israel ... We've seen much more interest from business people," he said.

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Stream of deals

The outgoing head of mission at the Israeli embassy in the UAE, Eitan Na'eh, said quite a few agreements were to be signed in coming months, with a series of ministers visiting Expo. "We need to really get down to work on institutional relationships between our financial institutions, the banks, the funds, the big business," Na'eh said.

Abdulla Baqer of the UAE-Israel Business Council expects major deals on logistics, medicine and start-up incubation this year. Israel has said it plans to open an economic attache office in Abu Dhabi this summer, and the UAE and Israel have been discussing a Free Trade Agreement.

To date, 10 government-to-government agreements have been signed between the two countries including double taxation, visas, financial services and money laundering agreements. Publicly announced deals include around 40 MoUs and around 30 other types of strategic, cooperation or distribution agreements related to the financial, energy, sports, agriculture, aviation, aerospace and media sectors as well as investment promotion and COVID-19 technology.

A gradual process

But a $3 billion fund announced by the US, Israel and the UAE to encourage private-sector investment and regional cooperation has gone quiet, as has a $10 billion fund of UAE private and state money announced in March to invest in Israeli strategic sectors.

"It takes some time for trade links to be established and the pandemic almost certainly complicated this," Jan Friederich, Senior Director at Fitch Ratings said.