Israel and UAE sign historic free trade agreement

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Israel and the United Arab Emirates have reached a free trade agreement that will eliminate most tariffs on goods traded between the countries.

Israel and the United Arab Emirates (UAE) have agreed terms on a free trade agreement (FTA) - the former's first with an Arab nation.

The deal aims to increase annual bilateral trade between the countries to more than $10 billion and will eliminate or reduce tariffs on 96% of all goods they trade with one another.

Goods that will benefit from lower tariffs include food, medicine, diamonds, jewelry, fertilizers and chemicals. Some duties will be removed gradually over the course of three to five years, while certain products will still be subject to customs tariffs but at a reduced rate.

The new FTA, which was signed in Dubai by Israeli minister of economy and industry Orna Barbivai and UAE minister of economy Abdulla bin Touq Al Marri, represents the culmination of months of negotiations between the Middle Eastern states.

Writing on Twitter, UAE trade minister Thani Al Zeyoudi said the new economic partnership agreement with Israel builds on the "strong foundations" laid by the Abraham Accords, a joint declaration of cooperation signed by Israel, the UAE and the US in August 2020.

He also said the FTA marked the start of "a new chapter in the history of the Middle East".

"Our agreement will accelerate growth, create jobs and lead to a new era of peace, stability, and prosperity across the region," the trade minister added.

Dorian Barak, president of the UAE-Israel Business Council, told Reuters the changes to rules around tax, imports and intellectual property would encourage more Israeli companies to do business in the UAE, particularly in Dubai. He also noted that many firms will be looking to establish themselves in Dubai in order to target opportunities in the broader region.

Official Israeli data showed the country's trade with the UAE reached a value of $1.2 billion in 2021.