On Aug. 13, 2020, a historic phone call between then-Prime Minister Benjamin Netanyahu, then-US President Donald Trump, and Emirati President Mohammed Bin Zayed took place that paved the way to the Abraham Accords.
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"When the phone call ended, all of us in the Oval Office stopped and were quiet, taking in the power of the things we'd just heard, and the even we were witnessing," Trump's son-in-law and advisor Jared Kushner writes in his new book.
There was much excitement, and all sides involved were pleased that the ties had been forged. But now, two years on, everyone is coming back down to earth.
The initial dream was of a flood of cooperation in high tech, security, green energy, cyber, space, and many other sectors. Israel imagined that investment would fly into Tel Aviv from Abu Dhabi. Dubai expected astonishing technological innovation. In effect, things have moved ahead very nicely, but still more slowly and with more complications that originally expected. Bilateral trade increases every month, but most of the money (60%) goes from Israel to the UAE.
The numbers are god, but far from the billions Israel was expected to see at the beginning of the process. Central Bureau of Statistics data from 2021 indicate that only about $1 billion moved between the two new partners, the vast majority of which went to diamonds – which Israel only processes and does not produce.
On the plus side, there is the free trade agreement the two countries signed a few months ago. But while its effect on trade has yet to be felt in numbers, it was reached quickly, showing that both sides want closer ties.
The Emirates have a few basic rules for doing business that don't always fit Israelis. First of all, a local citizen must be an equal part in a company operating there. This means that Israelis aren't free to do what they want, but have to find Emirati partners. That's doable. Over 100 Israeli-Emirati companies have already been registered.
Second, the Emiratis want the businesses to be based there. The days are gone when oil giants would throw money around the world without a thought. For years now, they have been opening their wallets only when they see potential profit or when the company, factory, or startup will be based within its borders.
When and where are the Emiratis willing to invest abroad? They deal in large numbers. The small amounts that Israeli businesspeople are willing to put into partnerships are for them "empty pockets." Israeli high-tech ventures are small change to the Emiratis, and won't bring them profits or be a feather in their investment portfolio cap.
The major investments the Emiratis have initiated have been blocked by the Israeli government for unknown reasons. That is what happened when the Emirati company DP World intended to acquire the Haifa Port.
And on the Emirati side, two emirates – Ajman and Fujairah – still object to normalization with Israel, and it is harder for Israelis to work there.
Ohad Cohen, head of the Foreign Trade Administration in the Economy Ministry, says, "It's true that at first, there was more excitement, and planes to the Emirates were full of businesspeople. But the move is for the long term. I believe that in the next few years, the numbers will grow and we might even see a change in the trade balance. Think that only two years ago, we didn't know anything about that country."
Asher Fredman, Director for Israel at the Abraham Accords Peace Institute, says, "We see the numbers growing every month. The gap between the honeymoon and everyday life is natural. COVID made things difficult, too. In the end, the Abraham Accords are here to stay."
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