Israel and the United Arab Emirates signed a free trade agreement on Tuesday in Dubai – the first of its kind between the Jewish State and an Arab country.

The deal comes less than two years after the historic Abraham Accords normalized official relations between the two countries. It is expected to provide customs exemption immediately or gradually on 96% of trade between the countries, including food, agriculture, cosmetics, medical equipment, medication and other goods.

Bilateral trade between Israel and the UAE currently amounts to about $1 billion annually, and could grow to more than $10 billion within five years, according to officials.

Israeli Economy Minister Orna Barbivay and UAE Minister of Economy Abdalla bin Touq Al Marri signed the groundbreaking document, which encompasses regulatory and standardization issues, customs, collaboration, government procurement, e-commerce and intellectual property rights.

“The free trade zone agreement which we signed this morning is expected to strengthen bilateral trade, to break down obstacles and to advance new economic opportunities and partnerships, that will serve as a basis for our shared path,” said Barbivay.

“Throughout the last year and a half, we have proven what can be achieved when differences and arguments are put to the side… We have no doubt that this agreement will lay the path to a new era of economic prosperity in our region,” said UAE Minister of State for Foreign Trade Thani Al-Zeyoudi.

According to the UAE’s Minister of Industry and Advanced Technology, Dr. Sultan bin Ahmed Al Jaber, the deal is a bold step forward that is aimed to advance the Gulf state’s economy and improve its status as a regional center for trade, investments and industries.

The negotiations over the free trade agreement lasted five months and included four rounds of talks and vigorous work by teams on both sides, said a statement from Israel’s Economy Ministry.

Israeli Prime Minister Naftali Bennett thanked UAE leader Mohamed Bin Zayed in a tweet Tuesday, noting this was the fastest free-trade agreement to be signed in Israel’s history.

“At the summit in Sharm el-Sheikh about two months ago, Sheikh Muhammad bin Zayed and I agreed with each other that ‘what takes 5 years, can also be done in a few weeks,”and instructed the teams to work at top speed.”

Israel and the UAE established full diplomatic relations in August 2020 under the Abraham Accords, which were facilitated and brokered by the Trump administration. Bahrain, Sudan and Morocco followed soon after.

The UAE is the second largest economy in the Arab world (after Saudi Arabia), with market imports worth hundreds of billions of dollars and significant weight placed on technology products and advanced solutions, where Israel holds a relative advantage.

The president of the UAE-Israel Business Council, Dorian Barak, predicts that around 1,000 Israeli companies will be working in or through the UAE by the end of the year, according to Ynet.

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