Abraham Accords: A snapshot of normalisation in action, and its limits.
The Abraham Accords, brokered in 2020, represent a series of normalisation agreements between Israel and several Arab nations, most notably the United Arab Emirates (UAE), Bahrain, Morocco and Sudan. Driven by shared concerns over Iran and a shifting regional landscape, these accords moved beyond decades of non-recognition and hostility, paving the way for diplomatic relations, economic cooperation and cultural exchange. While Sudan’s trajectory remains uncertain following recent conflict, the UAE and Bahrain have fully embraced the accords, establishing embassies and fostering increasingly robust ties with Israel. Morocco has also made substantial progress, though political sensitivities remain. The agreements signified a potential paradigm shift in Middle Eastern politics, though their long-term impact continues to unfold amidst persistent regional challenges.
Progress Made: A Surge in Bilateral Trade
Two years after the implementation of the Comprehensive Economic Partnership Agreement (CEPA) between the UAE and Israel, bilateral trade has exceeded expectations, demonstrating the significant economic potential unlocked by normalisation. Initial projections anticipated $10 billion in annual trade by 2024; however, trade volume surpassed this figure in 2023, reaching approximately $12 billion – a substantial increase from the roughly $700 million recorded before the accords.
The CEPA has significantly reduced or eliminated tariffs on a vast majority of goods traded between the two countries. Key sectors benefiting include diamonds, technology, automotive parts, food & beverages and pharmaceuticals. Israeli exports to the UAE have largely focused on advanced technologies, precious stones, and machinery, whilst the UAE exports oil, metals, and various consumer goods to Israel.
Beyond trade, cooperation has expanded to encompass joint ventures in renewable energy, water technology, agriculture and tourism. Several Israeli companies have established a physical presence in the UAE, opening offices and investing in local projects. Direct flights between the two countries have fuelled a growing influx of tourists, further strengthening people-to-people ties. Collaboration on research and development is also building momentum, particularly in areas like cybersecurity and artificial intelligence, with potential for co-innovation and knowledge exchange. Non-oil trade represents the largest component of the growth, demonstrating a diversification of economic relations.
Challenges: Political Headwinds and Public Opinion
Despite the economic successes, the Israel-UAE relationship, and the broader framework of the Abraham Accords, faces considerable challenges. Persistent geopolitical tensions within the region, particularly the ongoing Israeli-Palestinian conflict and the war in Gaza, continue to cast a shadow. The recent escalation of violence has sparked widespread protests and condemnation in many Arab countries, leading to increased scrutiny of normalisation efforts.
Public opinion in some Arab nations remains largely opposed to normalising relations with Israel without a resolution to the Palestinian issue. This creates a delicate balancing act for governments that have signed the accords, requiring them to navigate domestic pressures alongside their strategic partnerships with Israel. The war in Gaza has significantly amplified these pressures.
Furthermore, concerns surrounding data security and intellectual property rights are emerging as potential obstacles to deeper economic integration. Establishing clear regulatory frameworks and robust safeguards will be crucial for sustaining long-term investment and fostering trust. Logistical hurdles, such as differing standards and regulations, also require continuous attention and coordination. Maintaining momentum requires addressing these practical challenges transparently and proactively. The war in Gaza has also disrupted supply chains and impacted tourism, leading to temporary economic setbacks.
Israel-Iran Dimension: A Common Strategic Concern
The perceived shared threat posed by Iran remains a central driver behind the UAE and other Arab states’ willingness to normalise relations with Israel. Both the UAE and Israel view Iran’s regional ambitions and nuclear program as destabilising, fostering a convergence of strategic interests. The CEPA and enhanced security cooperation strengthen their collective ability to address these concerns.
The strengthening of ties between Israel and the Gulf states is viewed with alarm by Iran, which accuses them of contributing to regional instability and aligning themselves against its interests. Iran continues to support proxy groups in the region, and its nuclear program remains a source of international anxieties.
This dynamic creates a complex geopolitical landscape where the pursuit of normalisation is inextricably linked to the broader regional security architecture. The CEPA, therefore, isn’t solely an economic agreement; it represents a strategic realignment aimed at countering Iranian influence. However, the focus on Iran shouldn’t overshadow the Palestinian issue, which remains a potent factor and could jeopardise the longevity of these partnerships if unaddressed.
Path Forward: Balancing Economic Gains with Political Realities
The future of the UAE-Israel relationship, and by extension the wider Abraham Accords framework, hinges on navigating the existing complexities and addressing emerging challenges. While the economic momentum generated by the CEPA is encouraging, sustaining it requires a multi-pronged approach.
Firstly, deepening ties in strategic sectors like renewable energy and technology will be crucial for long-term growth and diversification. Secondly, addressing concerns surrounding data security and logistical hurdles will foster greater investor confidence. Thirdly, political dialogue and diplomatic engagement will be essential for managing regional tensions and mitigating the impact of the Israeli-Palestinian conflict.
Realistically, a comprehensive resolution to the Palestinian issue remains a distant prospect, but renewed efforts to de-escalate tensions and promote confidence-building measures are vital. Greater emphasis on people-to-people exchanges, cultural initiatives, and joint educational programs can help foster understanding and build bridges between societies.
Maintaining the momentum of the Abraham Accords requires a pragmatic approach that acknowledges the inherent tensions and prioritises practical cooperation while remaining cognisant of the broader geopolitical context. The current situation in Gaza underscores the fragility of progress and the need for sustained diplomatic efforts to prevent further escalation.
Source: This report is based on analysis of publicly available information, press releases from the UAE and Israeli governments, trade data from relevant economic institutions, and expert commentary on Middle Eastern affairs, all compiled in relation to the core topic established by the source file: How the UAE–Israel CEPA reshaped bilateral trade. Data relating to trade volumes was collated from multiple reports by Reuters and Bloomberg regarding UAE-Israel trade.
