• M74 Editorial Team

The New Normal: A Historic Detente Between the UAE and Israel

By Lulwa Taqi

The Abraham Accord came as a surprise to many, but, if you looked closely, the writing was on the wall all along. This normalization pact between the United Arab Emirates (UAE) and Israel is the culmination of 20 years of covert ties between the two nations.

All roads lead back to the Warsaw Conference in February 2019, where Israel and the Gulf states were open about (and almost flaunting) their alliance against Iran. This conference (where videos were leaked of a “closed” meeting at which Emirati diplomats sat alongside Israeli Prime Minister Benjamin Netanyahu) marked the start of a new era—one which proved that Netanyahu was right all along: a Palestinian state is no longer a prerequisite for formalizing ties with the Gulf states. The Abraham Accord is a testament to how rudimentary the ideals that once united the Gulf states have become. The mere threat of Iran now holds more weight than the entire Palestinian cause.

The specific details of the accord, which was announced on August 13, 2020, have not been revealed yet. According to a joint statement released that day by United States (US) President Donald Trump (whose administration brokered the deal), delegations from the UAE and Israel shall meet in the near future “to sign bilateral agreements regarding investment, tourism, direct flights, security, telecommunications, technology, energy, healthcare, culture, the environment, the establishment of reciprocal embassies, and other areas of mutual benefit.”

On August 31, El Al Israel Airlines’ Flight 971 from Tel Aviv to Abu Dhabi became the first direct flight between the two countries. Flight 971 also marks the first time an Israeli commercial plane entered Saudi airspace. It is worth noting that this new air corridor would not be possible without Riyadh’s permission to fly over Saudi territory.

A key part of the Abraham Accord is Israel’s commitment to suspend its annexation of the West Bank. In his public statements, Abu Dhabi Crown Prince Mohammed bin Zayed said that this commitment was the price of establishing a bilateral relationship with the UAE. For Israel, the price is worth it. As a result of the accord, Israeli exports to the Emirates are projected to rise from $300,000 per year to $500 million. Meanwhile, the UAE’s investments in Israel (which were previously marginal and largely undisclosed) are expected to reach up to $350 million annually. The sectors expected to profit most from the accord are: cyber, medical, financial technology, and communications. On August 16, the Abu Dhabi Stem Cell Centers signed a deal with Israel’s Pluristem Therapeutics to cooperate on research and development. This is the second deal to come to fruition since the accord was announced. The first came from the UAE's APEX National Investments and Israel’s TeraGroup, which agreed to work together on healthcare projects relating to COVID-19.

The opening of trade relations between the UAE and Israel has far-reaching implications that extend beyond the Middle East. One of the obvious stakeholders in this context is the US, which brokered the Abraham Accord. President Trump has long been claiming that he would be the one to break the status quo in the Middle East. The UAE-Israel detente is evidence that he has done exactly that. This is arguably Trump’s biggest foreign policy win since he took office in 2017, and is definitely something he can emphasize during his upcoming debates with former Vice President Joe Biden. No matter who wins November’s US presidential election, having the UAE and Israel (two close allies of the US) collaborating openly will undoubtedly further US economic and security interests in the region.

India was quick to endorse the Abraham Accord, stating that it has “consistently supported peace, stability, and development in West Asia.” Mainly, India will be interested in seeing if other Gulf countries (specifically Saudi Arabia) will take similar actions. India’s stakes run wide and deep in the region, especially in terms of energy supplies and expatriates. New Delhi also reaffirmed their long-standing support for Palestine, and called for the resumption of Israeli-Palestinian peace talks.

Spain’s Foreign Minister, Arancha Gonzalez Laya, echoed India’s sentiments, and welcomed this normalization of relations. She told Reuters that Spain believes that it is important to use the context of the accord to give an “impulse to the negotiations between Israel and Palestine, in accordance with United Nations (UN) resolutions seeking a two-state solution.” Like India, Spain will have to keep a close eye on how the accord unfolds, and if it creates any friction between the UAE and other Gulf states. For Spain, the UAE is its gateway to the Gulf. According to the Dubai International Financial Center, the UAE is the primary entry point for Spain’s exports to the Middle East. Based on figures from the UN’s COMTRADE database, Spanish exports to the UAE amounted to $2.09 billion in 2019. Although Spain increased its imports from the UAE by 35% that year, the trade balance between the two remains favorable to Spain. Although it’s highly unlikely that the UAE will be shunned by the Gulf Cooperation Council (GCC)—since it’s the second-largest economy in the group (after Saudi Arabia)—if it is, then there will be dire consequences for Spain and its investments in the region.

Nigeria has an interesting relationship with both the UAE and Israel. In 2018, the volume of non-oil trade between Nigeria and the UAE was $1.5 billion (and has grown even higher since then). Also, the two main Emirati airlines operate a combined 28 flights per week from Abu Dhabi and Dubai to Lagos and Abuja, which represents the most flights between Nigeria and any other country. The UAE has become so invested in Nigeria’s future that, in 2018, it opened Skyline University in Kano State, which offers higher education opportunities to young Nigerians. Although Nigeria has had a complicated history with Israel, the two countries have managed to put the past behind them by signing a Memorandum of Understanding in 2006. Since then, Nigeria has become an attractive place for Israeli firms to invest in, and communication between the countries has grown more fluid as a result. In fact, there is now a Nigerian-Israeli Chamber of Commerce in Nigeria and an Israel-Africa Chamber of Commerce in Israel.

The Philippines issued a statement resembling that of Spain, welcoming the Abraham Accord and voicing its hopes that the deal will contribute to peace and security in the region. Portugal and the UAE have several bilateral trade agreements. The Portuguese Trade Center recently relocated to Dubai (it was previously in Saudi Arabia), and is planning to double Portugal’s trade with the UAE within the next five years. Portugal and Israel have always maintained a warm relationship, which involves collaboration across a variety of fields (including defense, cyber security, and entrepreneurship). The UAE has been working to forge a deeper connection with Guyana for a while now. The two recently signed agreements that center around the avoidance of double taxation and the prevention of tax evasion. Also, Emiratis can now travel to Guyana visa-free. These initiatives, however small, reflect the UAE’s desire to develop bilateral ties with Guyana (which recently became a fellow oil-producing nation) that will open up new doors for investment and tourism. Meanwhile, ties between Israel and Guyana have been growing ever since the two countries established diplomatic relations over two decades ago.

It’s hard to tell how the Abraham Accord will affect Nigeria, the Philippines, Portugal, and Guyana, as the deal is still in its early stages. All four countries have solid ties with both the UAE and Israel. So, in the future, the accord’s successes will bleed into other agreements that these four have with the UAE and Israel. The deal affects the Middle East and the GCC in more complex and contradictory ways, though.

The effectiveness of the GCC in recent years has almost gone down to zero. It has become clear that there’s no harmony when it comes to major issues, such as foreign policy and macroeconomics. All six member states have been trying to diversify their economies away from oil and toward more sustainable options (ranging from technology to tourism), but we still haven’t seen any serious commitments in terms of fiscal rebalancing across the GCC.

The Gulf Crisis of 2017 is the root of the GCC’s current disunity. The Gulf Crisis was a culmination of various rivalries and disputes between the member states, which left Qatar on one side and the trio of Bahrain, Saudi Arabia, and the UAE on the other. Meanwhile, Kuwait and Oman are in the middle, as they attempt to restore some sort of decorum between the feuding neighbors. The possibility of this regional intergovernmental union returning to what it was prior to the crisis is extremely small. Rather than banding together to form a stronger negotiating body, the bloc has diverged in order to protect their own sovereign interests. Due to the GCC’s inability to solve or achieve anything, member states are being forced to take matters into their own hands by making unilateral or bilateral moves in order to counter existing threats (like the UAE did with Israel).

Bahrain and Oman both welcomed the Abraham Accord, and are expected to follow the UAE’s lead by formalizing their own ties with Israel. Saudi Arabia has been erringly silent on the subject. The most likely reason why the Saudis haven’t commented yet is because they’re using silence to balance the Kingdom’s contradicting interests: its long-time support of the Palestinians versus its evolving security concerns. It’s a smart move, because it buys them time to see how things will progress. It’s no secret, though, that Saudi Arabia has strong security ties with Israel. The Saudis probably welcomed the accord privately, as it ensures that they will have someone (the UAE) to represent their interests in this context. Kuwait has taken a different approach. Kuwait has stuck to its guns, and maintained its decades-old foreign policy position in support of the Palestinian cause. This is because Kuwait believes that the Israel-Palestine conflict is the most important issue facing Arabs today. Kuwait has said repeatedly that it will not accept any “solution” to the conflict unless the Palestinians accept it first.

The very fabric of the Arab mindset is changing. There are some that hold the view that it’s time to focus on their own countries, rather than the Pan-Arabian dilemmas that have plagued the region for decades yet somehow remain unsolved. However, there are still those who stand firm with the Palestinians. As the details of the Abraham Accord are made clearer in the coming weeks and months, it will be interesting to see if there is anything in it for the Palestinians (especially as it relates to exports, manufacturing, or other economic matters) besides the postponement of West Bank annexation. It is also worth noting that the UAE and Israel collaborating to further their own interests does nothing to achieve peace between the Palestinians and the Israelis. A resolution to the Israel-Palestine conflict is only actionable and successful if it involves the Palestinians themselves.

At a time when the viability of international trade is being questioned, the Abraham Accord is proof that globalization isn’t going anywhere. Emerging markets will always need global cooperation to prop themselves up. Sometimes, developed ones will too. Global cooperation is vital not only to survive pandemics and economic calamities, but also to fully realize the potentials of euphoric bull periods. Whether such cooperation is always or entirely genuine—in the sense that it allows for the free exchange of information and resources, and facilitates security and human rights—is an open question. Regardless, we will always be better off with globalization than without it.

Lulwa Taqi is an intern at M74 from Kuwait. She is a recent graduate of Pace University in New York City, where she earned a bachelor’s degree in International Management and Economics. Her interests include the European Union’s integration policies, the Middle East’s geopolitical climate, and international trade.

The views expressed above are those of the author and do not reflect the official position of the M74 Group, which remains neutral on all matters. Publishers assume no liability for content.