Oman, India sign trade agreement amid Modi-Trump tension
Oman signed a free-trade agreement with India that represents the sultanate’s first bilateral economic partnership deal in nearly two decades.
The accord signed in Muscat on Thursday grants Indian goods zero-duty access on about 98% of Omani tariff lines while India offered liberalized tariffs on most Omani imports.
The pact is expected to boost sectors such as gems, textiles and services and may offer some help as India tries to counter U.S. President Donald Trump’s punishing tariffs, Reuters reports.
In August, Trump doubled U.S. duties on Indian goods to 50%, the highest in the world. The hike included a 25% levy that was in retaliation for India’s purchases of Russian oil.
Speaking in Muscat, India’s Prime Minister Narendra Modi said the agreement would “strengthen the India-Oman partnership in the 21st century by renewing confidence and momentum.”
UAE expects $10B a year in trade with Angola under new pact
The UAE is going deep into Angola.
On a state visit to the southern African nation, which holds substantial supplies of diamonds, copper and oil, UAE President Sheikh Mohamed bin Zayed sat beside Angolan President João Lourenço to witness the signing on Monday of a free-trade deal between the two countries.
Dr. Thani Al Zeyoudi, the UAE’s Minister of Foreign Trade, said the Comprehensive Partnership Trade Agreement and other accords signed during the trip would generate bilateral returns reaching $10 billion a year by 2033.
Among the areas for cooperation covered in the deal are artificial intelligence, banking, agriculture, tourism and energy.
Foreign direct investment surges in UAE as new trade pacts pile up
Foreign direct investment in the UAE soared 48% last year as the Gulf state bolstered its international ties through a series of free-trade agreements.
Sheikh Mohammed bin Rashid, the UAE Vice President and Ruler of Dubai, hailed the milestone on Thursday, calling the $45.5 billion (AED 167 billion) in FDI an “international vote of confidence” in the Emirati economy.
The UAE, which is the Arab world’s second-largest economy after Saudi Arabia, accounted for 37% of total foreign investment in the region, Sheikh Mohammed said, citing the U.N. Conference on Trade and Development’s 2024 World Investment Report.
The government has launched a series of initiatives that helped boost FDI, including reducing visa restrictions, speeding up professional licensing procedures, issuing golden visas for foreign residents and providing generous incentives to attract tech companies, The National reports.
The UAE also widened its campaign to sign free-trade pacts known as the Comprehensive Economic Partnership Agreements, adding deals with Costa Rica, South Korea, Chile and Australia in 2024.
Maldives bets on tax-free $8.8B digital hub developed by Qatar
A new $8.8 billion financial oasis is rising in the Maldives with a focus on blockchain and digital assets, and it’s entirely tax-free.
MBS Global Investments, the Dubai-based family office of Qatar’s Sheikh Nayef Bin Eid Al Thani, will co-develop the Maldives International Finance Centre in Malé with the Maldivian government, Bloomberg reports. The completion date is scheduled for 2030.
The project promises zero corporate taxes, tax-free inheritance and no residency requirements.
It will include key features such as a 3,500-seat conference center, residential and office towers and access to multi-currency and private offshore banking.
The project is expected to generate over $1 billion in revenue within five years, a potential lifeline for the Maldives as it grapples with rising external debt and a deteriorating credit rating.
New Zealand, UAE reach terms for signing free-trade pact
New Zealand and the UAE have reached a free-trade agreement after four months of negotiations.
The Comprehensive Economic Partnership Agreement will eliminate duties on as much as 99% of New Zealand’s exports to the Gulf state, according to Trade Minister Todd McClay.
“This will create new opportunities for New Zealand businesses in the dynamic UAE market, contributing to our ambitious target of doubling exports by value in 10 years,” McClay said in a statement issued on Thursday.
Trade between the two countries reached $814 million for the year ending June 2024, he said.
Arabs and Israelis mull regional free-trade pact at Bahrain talks
Nearly three years after establishing diplomatic ties, representatives from a group of Arab countries and Israel met this week in Bahrain to brainstorm ideas about forming a regional free-trade alliance.
The discussions were unofficial and meant to lay the groundwork for future negotiations among the countries that normalized relations with Israel under the 2020 Abraham Accords. The talks were organized by the Atlantic Council, a Washington think tank, as part of the backchannel “N7 Initiative” it developed in partnership with the New York-based Jeffrey M. Talpins Foundation to bolster the Accords.
“We brought senior trade negotiators together for a private discussion… to do a road map for a multilateral, regional free-trade agreement,” William F. Wechsler, senior director of the Atlantic Council’s Middle East programs and head of the N7 project, told The Circuit.
Taking part in the talks on Monday and Tuesday were trade officials from Bahrain, the United Arab Emirates, Morocco and Israel, Wechsler said, as well as former officials from Egypt and Sudan. Jordan did not participate. The N7 brand refers to Israel and the six Arab countries that have signed peace treaties or normalization pacts with it. Under the rules of the conference, none of the trade negotiators’ names could be made public.
The back-channel talks provided an opportunity for government representatives to discuss concrete steps for advancing normalization face-to-face at a time when such encounters have become less frequent. A meeting of the U.S.-backed Negev Forum, comprising the foreign ministers of the seven countries, has been repeatedly postponed this year amid violent eruptions of the Israeli-Palestinian conflict that have been strongly condemned by the Arab countries in the N7.
The trade conference was the third in a series of N7 events aimed at generating ideas for specific areas of Arab-Israel cooperation that will be presented for consideration by the Negev Forum. It followed a March meeting in the UAE on agriculture, water and food security, and December talks in Morocco on education and coexistence.
Increasing the potential impact of the N7 project is the fact that it was directed until last month by Daniel Shapiro, the former U.S. ambassador to Israel. Shapiro was appointed on June 29 to be the State Department’s senior advisor on regional integration. In his announcement, Secretary of State Tony Blinken said Shapiro’s task was to help “deepen and broaden the Abraham Accords, and build the Negev Forum.”
The UAE and Israel signed a free-trade agreement last year that the two countries predict will generate $10 billion in annual bilateral economic activity by 2026. Bahrain has indicated it is also close to signing a free-trade agreement with Israel. Wechsler said that a regional agreement would bring extra benefits because “as you add countries, it has a multiplier effect on free trade.”
While the trade negotiators went unidentified at the conference, the participating nations sent senior officials to observe the discussions and join an opening dinner at the Sofitel Hotel in Bahrain’s capital city of Manama. Among them were Abdelouahed Rahal, director general of the trade division at Morocco’s Ministry of Industry and Trade; Shaikh Abdulla bin Ahmed Al Khalifa, undersecretary for political affairs at Bahrain’s Foreign Ministry; Israel’s ambassador to Bahrain, Eitan Naeh; and the U.S. ambassador to Bahrain, Steven Bondy.
Saudis positioning for next move as Israel, UAE sign free-trade pact, Emirati VC chief says
The free-trade agreement signed yesterday between the United Arab Emirates and Israel is generating interest among investors in Saudi Arabia who are patiently making plans for the possibility their own government will soon normalize relations with the Israelis, an Emirati venture capitalist said.
“I would expect that Saudi businessmen are just going to watch, learn and try to position themselves for if and when anything opens up” with Israel, said Sabah al-Binali, executive chairman of OurCrowd Arabia, a UAE-based unit of Israel’s OurCrowd venture capital platform.
Al-Binali spoke to reporters following a ceremony yesterday in Dubai in which Israeli Minister of Economy and Industry Orna Barbivai and Emirati Minister of State for Foreign Trade Thani Al Zeyoudi signed the agreement. Some 96 percent of goods traded between the two countries, including food, agricultural products, cosmetics, medications and medical equipment, will be exempt from customs duty under the pact.
The effort to tear down trade barriers between Israel and the UAE comes nearly two years after the two nations and the Gulf state of Bahrain signed the U.S.-brokered Abraham Accords, normalizing relations between the former Middle East adversaries. U.S. President Joe Biden is preparing a visit to the Jewish state in late June amid indications that his administration is pressing the Saudis to allow more open business relations with Israel.
Those include a report in the Israeli business publication Globes that dozens of Israeli executives have been allowed to enter Saudi Arabia recently using their Israeli passports, instead of being required to use second passports from other countries, as has long been the practice. Two senior Biden administration officials, meanwhile, traveled to Riyadh last month to discuss a possible agreement between Israel, Saudi Arabia and Egypt that would increase oil production in the region, according to Axios. The White House is also pressing for an agreement finalizing the transfer of two Red Sea islands from Egyptian to Saudi sovereignty, which would facilitate the oil deal.
As Arabs and Israelis grow more comfortable with each other, Al-Binali said it’s time to start work on a more comprehensive regional framework for the holdouts to the Abraham Accords: Saudi Arabia, Kuwait, Qatar and Oman. The pact signed in Dubai covers regulatory enforcement, customs regulations, government procurement, protection of intellectual property rights and e-commerce.
“It’s one thing to go do six bilateral free-trade agreements,” Al-Binali said in the discussion with reporters by Zoom. “The interesting question is can Israel end up at some point in the future doing a single, bilateral, free-trade agreement with the GCC [Gulf Cooperation Council] itself? Let’s not forget that the GCC is its own economic and political bloc.”
Trade between the UAE and Israel is expected to reach $5 billion in the “upcoming few years,” Al Zeyoudi said last week at the World Economic Forum in Davos, Switzerland. He said trade volume between the two countries since the Abraham Accords were signed has already exceeded $2.5 billion and will probably exceed $2 billion in 2022.
A private-equity fund run by Jared Kushner, the son-in-law of former President Donald Trump who led negotiations on the Abraham Accords, has arranged a deal to invest millions of dollars from Saudi Arabia’s sovereign wealth fund in Israeli startups, the Wall Street Journal reported last month. Jerusalem-based OurCrowd, which invests in some 340 companies through its crowdfunding platform and is the first Israeli venture capital firm licensed in the UAE through the Abu Dhabi Global Market, hired Al-Binali to run its operations in the Gulf.
Al-Binali minimized concern that the UAE might retreat from its growing ties with Israel because of recurring friction with the Palestinians, including clashes in East Jerusalem and the death of Al Jazeera reporter Shireen Abu Akleh during a firefight between Israeli soldiers and Palestinian gunmen in the West Bank city of Jenin.
“The Emirati culture is one that, yes, you can sit there and say we don’t like this or we like that and so on, but you know, we stay on course,” Al-Binali said, noting that the relationship was already “stress-tested” by the Israel-Hamas missile battles in Gaza in May 2021. Emiratis “spend a lot of time thinking about these things, and I believe that we will see a lot of resilience.”
