Israel entered a free trade agreement with the United Arab Emirates on Tuesday, the first with an Arab state in the country's history.

The agreement, which mirrors Israel's agreements with the United States and the European Union, covers 96% of trade between Israel and the UAE, which stood at $885 million in 2021, Israel's Ministry of Economy and Industry told the Washington Examiner. The historic trade deal will increase annual bilateral trade to over $10 billion, according to UAE estimates.

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"With the #UAEIsraelCEPA signed, sealed and delivered, we have written a new chapter in the history of the Middle East," Emirati trade minister Thani Al Zeyoudi wrote on social media. "Our agreement will accelerate growth, create jobs and lead to a new era of peace, stability, and prosperity across the region."


Beyond expanding trade between the two countries, the new deal is expected to increase the protection of intellectual property rights, patents, and copyright for traders from both countries.

Tariffs between Israel and the UAE will be reduced on goods, including food, medicine, diamonds, jewelry, fertilizers, and other chemicals. Most tariffs will be eliminated immediately, others will be removed in three to five years, and some will still be subject to tariffs but at lower rates.

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The new free trade agreement will mark Israel's 19th agreement and will be much broader compared to its deals with other countries. It is also the UAE's second agreement this year, following a free trade agreement made with India, according to the Jerusalem Post.

The new deal comes less than a month after the UAE elected Sheikh Mohammed bin Zayed al Nahyan to serve as its new president on May 14, who took office following the death of former UAE president Sheikh Khalifa bin Zayed al Nahyan.