The recent agreement between Israel and the United Arab Emirates promises to establish normal relations between the two countries. These include business relations, tourism, direct flights, scientific cooperation, and, in time, full diplomatic ties at the ambassadorial level. Israel and the UAE have been inching toward normalization in recent years.
Federal Law No. 15 of 1972 prevented Emirati corporations from importing/exporting goods and products from/to Israel. The law also prevented importing any products that had a component manufactured in Israel (art. 2) and required that Emirati manufacturing companies label products with a statement that the product had not been manufactured in Israel (art. 3). Emirati export-import companies were also prohibited from transporting goods and products through UAE territory to Israel. (Art. 5.) The purpose of Federal Decree-Law No. 4 of 2020 of Sept 2020 is to expand diplomatic and commercial cooperation between the two countries. Moreover, by abolishing Law No. 15 of 1972, Emirati citizens and corporations may enter into commercial, financial, and trade agreements with Israeli corporations bringing in a sea change in the relationship between UAE and Israel.
Some of the Key economic benefits lie in mutual cooperation in areas like developing food and water resources, renewable and clean energy like solar power, improvement in medical technology, etc. The two nations are well aligned and can learn from each other and they can exchange expertise which can result in increased standards of living across the region and grow entrepreneurship and investment.
One of the major strengths of the UAE is its strong trade, logistics, construction, and tourism industries. The alliance with Isreal can promote economic growth in all these areas where the two countries can mutually complement each other. UAE can use this opportunity to become a “scale up” nation and can serve as a gateway between the Middle East, North Africa, and Asia by promoting the flow of business, investment, talent, and people,
The Israeli Ministry of Economy estimates that the normalization of ties between Israel and the UAE could boost bilateral trade and investments to the tune of 500 million dollars. This can be a little over-exaggerated, in real terms it can touch around 300 to 350 million dollars in futuristic terms.
To conclude, as a nation UAE continues to attract talent from across the world opening to expatriates in general with new business opportunities and creating different types of visas including retirement visa despite disruption in global trade due to the Covid-19 pandemic situation. Under the circumstances Opening up the relationship with Isreal will bring in a plethora of opportunities for trade and improvement in the UAE economy.
