Before October 7, 2023 and the Hamas attack on Israel, the UAE-Israel Business Council had been posting almost daily on social media. The Council, based in the Israeli city of Tel Aviv, enthusiastically told the world just how good trade relations between Israel and the United Arab Emirates were, after the two countries normalized their relations in 2020 when they signed the so-called Abraham Accords.
That changed after October 2023. The Council’s last post was on October 8. Since then, nothing — and the Council itself didn’t respond to DW enquiries as to why they had stopped celebrating UAE-Israeli business ties. Because, despite a year of conflict, these have actually remained comparatively robust.
Leaders in countries that have trade ties with Israel, including the UAE, Jordan and Egypt, have all criticized how Israel is conducting its military campaigns in Gaza and now Lebanon.
Since the Israeli military campaign in Gaza began last October in response to the Hamas attack, over 42,000 people have been killed in the enclave, including more than 3,400 children.
After Israel began a military campaign in Lebanon last month, more than 1,300 people have been killed there.
As a result, rhetoric from Arab leaders is becoming increasingly blunt.
Jordan’s foreign minister Ayman Safadi met with top US diplomat Antony Blinken this week and spoke about events in northern Gaza. “We do see ethnic cleansing taking place, and that has got to stop,” Safadi said.
At a UN Security Council Meeting in mid-October, Egypt’s foreign minister Badr Abdelatty told council members that Israeli actions were to blame for “an unprecedented humanitarian catastrophe,” in Gaza.
Politicians from the UAE now regularly emphasize that a pathway towards Palestinian statehood is necessary in order to end the current conflict and ensure lasting peace in the Middle East.
Trade ties still strong
Despite all the criticism, trade ties between those countries and Israel do not appear to have suffered.
Of all the countries in the region, the UAE does the most business with Israel followed by — in order of the value of bilateral trade in 2022 — Jordan, Egypt, Algeria, Morrocco and Bahrain.
According to monthly statistics on foreign trade for August 2024 collated by Israel’s Central Bureau of Statistics, the amount of trade — exports and imports — that those countries do with Israel has remained mostly positive this year.
In Jordan’s case, trade this August was almost the same as last year, only decreasing by around 1%. In Egypt, trade with Israel this August grew by over 30%. Trade with Morocco and Bahrain, also signatories to the Abraham Accords, has also been growing significantly this year — despite earlier threats by Bahrain to cut trade ties.
In 2023, total UAE-Israel trade was valued at around $2.9 billion (€2.69 billion) and the amount may be higher this year. Over the first seven months of 2024, UAE-Israel trade totals were already at $1.922 billion. If things go on the same way, total UAE-Israeli trade could be as high as $3.3 billion by the end of the year.
It’s hard to predict though, experts say. While trade ties have held, the rate of growth sparked by the Abraham Accords has certainly slowed.
And there have also been other impacts. For example, tourism has been reduced and logistics disrupted.
Still, according to Israeli and Emirati businesspeople, other than the sectors directly impacted by the conflict, most changes have been superficial. Deals are still being done, Israeli and Arab businesspeople have told journalists. It’s just that there are fewer, and nobody wants to discuss them openly.
“In some instances, business has even expanded,” Dina Esfandiary, a senior advisor on the Middle East at the think tank Crisis Group, told DW.
But when it comes to states like the UAE, it’s important to look more closely, she notes. “There is business between the Israelis and the UAE state-owned enterprises, which is the majority of what’s happening, and then business between Israeli firms and UAE private sector firms,” Esfandiary explains. “That has all but stopped because the private sector has become very nervous of continuing any business deals with Israel.”
Esfandiary knows of wealthy Emiratis who were previously enthusiastic about working with Israelis but who have since completely abandoned the idea. “It’s a reputational thing for them,” she notes. “Whereas the state-owned enterprises don’t have such big reputational concerns.”
Some prominent Emiratis who once supported the Abraham Accords no longer do, she says. For instance, as the deputy director of the Dubai police, Dhahi Khalfan Tamim, recently told his 3.1 million followers on X: “The Arabs really wanted peace, but the leaders of Israel do not deserve respect.”
“Arab businesspeople are using different calculations to weigh risks and rewards associated with commercial engagement with Israel,” confirms Robert Mogielnicki, a senior resident scholar at the Arab Gulf States Institute in Washington. “But economic and business ties can remain quite sticky amid diplomatic tensions and other regional crises,” he says.
If crisis worsens, will that change?
At some stage, the UAE might come to see curtailing trade ties as a way to put pressure on Israel, already in increasing economic difficulties due to the conflict, to move towards a cease-fire, Esfandiary argued in a June commentary.
“But the countries who signed the Abraham Accords are unlikely to change their plans altogether,” she told DW. “When you speak to Emirati officials, they often highlight that their relationship with Israel is what has allowed the UAE to funnel much more aid into Gaza than any other country.”
But it’s not just that. “They also don’t want to roll back the relationship because they stand to gain from it,” she explains.
“Economic ties may serve as a lever … to incentivize Israeli decision-making down the line,” Mogielnicki also says. “But for the time being, I think the likelihood of Arab governments taking direct steps to break all existing economic linkages is slim.”
Khaled Elgindy, a senior fellow at the Middle East Institute and director of the Washington-based think tank’s program on Israeli-Palestinian affairs, shares this assessment. “I’m skeptical about that [breaking off trade ties] because it’s been more than a year. The rhetoric is a lot stronger, but I think that if they were going to do this, they would have done it by now,” he tells DW.
And after the military campaign ends, “it will just be socially unacceptable for folks to just go back to business as usual,” he believes.
“Because I think the atrocities of last year have deeply affected public opinion. Israel has done massive, irreparable damage to its image across the Arab world.”
Edited by: Kate Hairsine