Euro-Gulf Information Centre
Abraham Accords Generate Real and Tangible Benefits: What Remains to Be Done
by Keith Boyfield*
While the world’s media have focused intensely on the Covid pandemic, the Taliban takeover of Afghanistan, the tensions between China and the US and, most recently, the tragic conflict in the Ukraine, it has largely ignored the good news emanating from the Middle East. This is centred on the Abraham Accords, the joint statement signed on 15 September 2020 in Washington DC which formally regularised relations between the state of Israel, Bahrain and the UAE. What is more, two other countries, Sudan and Morocco, normalised their diplomatic and commercial relations with Israel shortly thereafter.
The media is enthralled with bad news but the benefits stemming from the Abraham Accords need to be fully appreciated. They are a welcome sign that the signatories to the deal can confidently look forward to improved security, greater wealth and an ever widening range of cultural exchanges as citizens travel to and fro between the five countries that have signed up to this initiative.
A Boost to GDP and National Wealth
Already, only a year and a half after the signing of the Accords, there has been a significant increase in trade between Israel and its neighbouring Arab partners. The table below shows how trade has taken off in 2021, illustrated by the massive gain of 511 percent recorded between Israel and the UAE. Whereas in 2020 there was no trading relationship with Bahrain, in 2021 the doors began to open with trade totalling $6.5 million. This is now likely to surge with initiatives, for instance, to cooperate on innovation and development of water resources.
Table: A Transformation in Trading Relationships
Source: Israel Central Bureau of Statistics
This month saw a Free Trade Agreement signed between Israel and the UAE. This is likely to be a transformative step. The Rand Corporation reckons that over the next ten years this is likely to trigger a 0.8 percent rise in UAE’s GDP, as the two countries develop tourism along with trade in diamonds, industrial goods and services. This move to cooperate constructively is illustrated by the fact that Ahmed Bin Sulayem, the chairman of the Dubai Diamond Exchange, has been the driving force behind opening an office at the Israel Diamond Exchange in Tel Aviv.
Similar bilateral free trade agreements with Bahrain, Morocco and Sudan offer the prospect of increasing Israel’s GDP by an additional 2.3 per cent over the next decade. The potential for its partners is even greater. Clearly, this is a win-win deal.
The Abraham Accords promise to act as a catalyst for intra-regional trade through greater dialogue and cooperation.
Compared with Europe, where trade between EU countries represents nearly two thirds (66%) of all trade, the Middle East compares poorly with less than 13% of trade involving countries in the region. The Accords could boost commercial activity and lead to a surge in new employment opportunities, turbo-charging the competitiveness of the private sector, particularly as it relates to aerospace, agriculture and IT/telecoms.
Getting Down to Business
It is worth highlighting some of the many new specific developments that have occurred since the signing of the Accords in September 2020. For example:
Bahrain has signed 12 economic agreements with Israel spanning the aviation, banking, technology and water sectors. Over the last year, Israel has begun importing aluminium from Bahrain, and, looking ahead, the two countries are planning to organise the trans-shipment of goods off-loaded in Bahrain onto cargo planes heading for Israel.
Meanwhile, the National Bank of Bahrain has signed agreements to cooperate with Israel’s Bank Leumi and Bank Hapoalim.
Israel’s Bank Leumi has also entered into a partnership with the Emirates based DP World Group to develop port capacity in Israel, starting with an ambitious terminal scheme in Haifa.
Etihad Engineering has signed an agreement with Israel Aerospace Industries (IAEI) to convert Boeing passenger planes into cargo aircraft at a new facility in Abu Dhabi.
UAE is cooperating with Israel’s Start-Up Nation Central to develop a range of Agrifood Tech projects.
Israel, Jordan and UAE announced a deal in November 2021 which will provide electric power to Israel from Jordan, funded by UAE capital, while Israel, in turn, will provide much needed desalinated water to Jordan.
Over the last year, the UAE’s sovereign wealth fund has invested $100 million in Israel’s technology sector.
In the burgeoning healthcare field, the UAE’s Zulekha Hospital has signed a cooperation agreement aimed at promoting health tourism with the Israel’s Health Plus. In addition, in November 2021, Israel’s Sheba hospital signed a key agreement with Bahrain’s King Hamad University Hospital on mutual exchange initiatives.
The Need to Mobilise Greater International Support
These welcome advances ushered in by the Abraham Accords underline the importance of conveying these positive stories to a wider international audience. After some initial hesitation owing to its association with the Trump Presidency, the US Biden Administration is now fully committed to fostering Israel’s growing ties with its Arab partners through widening the circle of cooperation. As Secretary of State Blinken points out, ‘Normalisation leads to greater stability, more cooperation, mutual progress – all things the region and the world need very badly right now.’[i]
In this regard, US officials are reported to view the UAE as the region’s ‘Little Singapore’, a trade hub with significant potential both across the region and globally. What is more, in terms of expansion, the longer term goal must be for Saudi Arabia to join the Accords agreement, building on the informal intelligence and security links that already exist between the Kingdom and Israel.
In the UK, a Middle East Forum was recently established to promote understanding of the Accords’ goals, primarily aimed at Parliamentarians. An ambitious series of events is planned, including a programme of briefings and visits to Tel Aviv, Manama and Abu Dhabi to see the profound changes the Accords are generating. The Forum also plans to bring together young Emiratis, Bahrainis and Israelis to exchange ideas and aspirations. The Forum’s board members include Lord Mandelson, the former Cabinet Trade Minister, and Lord Polak, President of the Conservative Friends of Israel. Another strand to this educational strategy is the appointment of Dr Liam Fox MP, the former International Trade Minister, as Chair of the UK Abraham Accords Group[ii] tasked with promoting the Accords and the wider cause of peace across the region.
Stability and wealth creation in the Middle East is a crucial concern for the UK as it seeks to capitalise on its newfound freedom to strike trade deals independent of the EU. The Gulf Cooperation Council (GCC) is already an important trading partner, worth almost £22 billion in UK exports in 2020, and Britain is keen to agree its first free trade agreement with the GCC to boost digital trade, business services and engineering know-how associated with renewable energy and low carbon technology. The Gulf countries have been long standing investors in the UK and Arab ownership is now behind many household British names.
Similar promotional moves are being made in an EU context, yet there is considerable scope for greater engagement. For many years, EU diplomatic efforts towards the Middle East centred on the Palestinian issue. However, Arab nations’ unprecedented willingness to cooperate on the Abraham Accords appears to have wrong-footed many in the EU foreign affairs firmament, transfixed as they are with the historic Palestinian dispute and blinded, perhaps, by a suspicion of any initiatives led by the Trump Administration.
In practice, the Arab signatories to the Abraham Accords have clearly demonstrated their primary interest in establishing greater security and commercial cooperation with Israel. The Palestinian issue, while important, does not override issues surrounding wealth creation and regional security in the light of Iranian provocation.[iii] This groundswell of greater understanding was reflected by progress made at the Negev Desert security summit in March 2022, which brought together Israel, Egypt, the UAE, and Bahrain with US Secretary of State, Anthony Blinken, invited as an observer. Significantly, the Abraham Accord partners instigated the summit, not the US.
The Prize to be Seized
The prize waiting to be grasped is the rapid expansion of the Abraham Accords. Israel continues to strengthen its links with its Arab neighbours, leaving aside the failed state of Syria. Demonstrable benefits from the Accords will do much to accelerate greater cooperation and, in this context, the support and trust of younger people will be crucial. After all, they are the ones who have most to gain from success: namely, better employment opportunities, greater security and newfound freedoms to travel and attend educational courses. Fostering greater dialogue builds trust – that rare commodity over the last half century in Israeli-Arab relations - which the Abraham Accords convincingly nurture.
*Keith Boyfield is a Senior Fellow of the Euro-Gulf Information Centre.
5 April 2022
[i] ‘At the one year anniversary of the Abraham Accords: Normalization Agreements in Action’, remarks by Anthony Blinken, Secretary of State, US Department of State news release, 17 September 2021.
[ii] This was at the joint invitation of the Ambassadors to the UK from Bahrain, UAE and Israel.
[iii] This was compellingly illustrated by the BBC TV documentary series, ‘Trump takes on the world’ which featured high level interviews with advisers and diplomats closely involved in the Abraham Accord negotiations. First broadcast in February 2021, this gripping series was realised for television by its talented producer, Norma Percy.