Trade between the Jewish state and the Arab world has soared dramatically since the signing of the Abraham Accords, the Arab-Israeli peace treaties established in 2020.
Arab-Israeli trade reportedly grew by 234% in the first seven months of 2021 compared to the same period in 2020, according to Central Bureau of Statistics figures cited by Yonatan Gonen of the Israeli Foreign Ministry. The dramatic recent surge in Arab-Israeli bilateral commerce indicates that the rapidly normalizing ties extend far beyond formal peace agreements.
Zeev Lavie of the Federation of Israeli Chambers of Commerce (FICC) linked the dramatic rise in Arab-Israeli trade to Israel’s rapid integration in the wider Middle East.
“We’re becoming much more regional. 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,” Lavie said.
Fresh statistics showed that trade between Israel and the United Arab Emirates jumped to $613.9 million between January and July in 2021 compared to only $50.8 million during the same period in 2020. While impressive, it appears to be only the beginning of thriving commercial relations between the two countries.
Bilateral trade could reach $1 billion by the end of 2021, according to the UAE-Israel Business Council, an organization that focuses on promoting Israeli-Emirati trade. The organization believes that bilateral trade between the UAE and Israel could exceed $3 billion within three years.
Dorian Barak, an investor and co-founder of the UAE-Israel Business Council, stressed the commercial importance of the Emirates.
“The Emirates are a place where people from all over the world come to engage in commerce, with unique advantages compared with other jurisdictions that make it a unique platform to reach the entire world,” Barak said.
According to Barak, the Emirates is a Middle Eastern version of Singapore or Hong Kong “in that they are not just markets to sell to, they are marketplaces for the entire world. That’s why the UAE is the business capital of the entire region. Every country has a presence there.”
With a similar GDP of approximately $400 billion and a high GDP per capita, the trade potential between the UAE and Israel is considerable. While the expected bilateral UAE-Israel trade volume of $1 billion in 2021 is impressive, it still dwarfs in comparison to the Emirati export of $24 billion to Saudi Arabia in 2019.
While the UAE is currently Israel’s largest Arab trade partner, bilateral Israeli-Moroccan trade increased from $14.9 million to $20.8 million. Jerusalem’s trade with the smaller kingdom of Bahrain rose from virtually zero during the first seven months in 2020 to $300,000 during the same period in 2021. With the recent opening of a Bahraini embassy in Israel and an Israeli embassy in Bahrain, these figures will likely increase significantly in the near future. Consisting mainly of desert, Bahrain is especially interested in Israel’s cutting-edge water technologies.
The Jewish state’s trade with Jordan increased this year from $136.2 million to $224.2 million. Meanwhile, Jerusalem’s commercial ties are also improving with Egypt, the most populous Arab state that signed a peace agreement with Israel in 1979. Trade between Jerusalem and Cairo increased from $92 million to $122.4 million.
The impressive trade figures shown above exclude trade in tourism and other services. The UAE and Bahrain have already signed several deals with Israel that include aviation, tourism and financial services that will further enhance existing bilateral commercial ties between the countries.
Avi Berkowitz, a former White House official in the former Trump administration who played an important role in negotiating the Abraham Accords in 2020, reacted to the growing Arab-Israeli trade in 2021 with the tweet “Just the beginning.”
The All Israel News Staff is a team of journalists in Israel.