Middle Eastern trade relationships are having an overhaul of sorts, particularly with the landmark normalization of relations between the UAE and Israel. One of President Donald Trump’s many legacies towards a more peaceful world, Israel and the UAE entered into the Abraham Accords Peace Agreement in October 2020. Israeli Prime Minister, Benjamin Netanyahu and Sheikh Mohammed Bin Zayed, Deputy Supreme Commander of the UAE issued a joint statement pledging to “chart a new path that will unlock greater potential in the region.”
The UAE is only the 3rd Arab nation to normalize relations with Israel along with Egypt and Jordan, however Bahrain and Morocco are also joining this trend and we may see more to follow.
Establishing New Trade Relationships
Ships have already exchanged goods between the UAE and Israel, banks in the two countries have struck up cordial relationships and Israeli tourists arrived in Dubai on the first ever direct commercial flight from Tel Aviv to Dubai.
These advances are crucial to more peaceful cooperation in the Middle East and de-escalation of tensions in the region. It is an opportunity for knowledge sharing and the establishment of new relationships. The normalizing of trade relationships between Israel and the Middle East will also bring plenty of opportunities for SMEs and other smaller players in international trade.
The UAE: Israel’s Gateway to the Gulf?
Due to tensions in the Middle East, Israel has been traditionally kept out of regional markets. However, the UAE has a reputation for being the gateway to the Middle East, maintaining excellent relationships with nearly all regional trade partners. This will provide great benefits for trade in the Middle East, allowing Israeli and Arab traders to more efficiently interact with each other through the UAE.
Qatar Back in the Fold
January 2021 also brought more good news for Middle Eastern Trade in the form of normalizing relations between Saudi Arabia’s allies, the UAE and Qatar. In 2017, many gulf states severed relations with Qatar over a dispute regarding Qatar’s purported support for certain Islamist outfits. The dispute plunged the region into turmoil, but now it seems that matters are being resolved and trade and diplomatic relations will soon normalize. All of these developments may well trigger a new golden age for free trade in the Middle East.
