In the shadow of recent developments between Israel and Saudi Arabia in general and the publication in Globes last week in particular, the head of the outgoing political-security division at the Ministry of Defense, Zohar Felti, made an unusual statement this week.
“Until five years ago, the Iranians had mainly Hezbollah,” Felty said, noting that “in the last five years they have managed to position themselves and threaten Israel in Yemen, Iraq and Syria … The answer is the Abrahamic agreements. I am sure Saudi Arabia will join soon.”
As part of his role, Felty was part of the circle of decision-makers, and was exposed to contacts with countries with which Israel does not have diplomatic relations. Felti received his remarks from a Saudi source, in a conversation with Globes, with a smile. “Israel is always in a hurry, it will come when all the conditions are ripe,” the Saudi official clarified. “It is not certain that there will be a political agreement soon, it is clear that in the other areas – trade, economy, sports and more – there is no problem with the Israeli-Saudi connection. It is clear that wherever the interests meet, they work together, without the need for any mediation.”
The Israeli panic for business with the Saudis
Following the publications on Saudi-Arab-Saudi relations, many Israeli businessmen and companies are interested in contacting the Saudis. Referrals reach both government ministries and the Israel-Gulf Trade Bureau. At the same time, trade relations between Israel and other countries with which it does not have diplomatic ties are in full swing.
These economic ties have existed for many years, but the dramatic change with the move over the table occurred with the signing of the Abrahamic Agreements. These were agreed upon in Saudi Arabia’s blessing of Bahrain, and in Saudi coordination with the United Arab Emirates.
A direct result of the Avraham agreements was reached this week in Dubai, Israel’s free trade agreement with the United Arab Emirates. The head of the Foreign Trade Administration at the Ministry of Economy, Ohad Cohen, tells Globes that the agreement is expected to lead to a real increase in the volume of trade with the United Arab Emirates, up to $ 3 billion a year in three years. In 2021, the volume of trade between the countries approached one billion and according to the United Arab Emirates, only in the first quarter of this year it has already reached one billion.
According to Cohen, the meaning of the agreement is the official opening of the markets in the Gulf states, which already have free trade agreements with the United Arab Emirates, to Israeli businessmen. “The agreement closes a 50-year gap for Israelis in the UAE and the Gulf, by giving this priority of eliminating customs to Israel over other countries. Strategically, the emirates want to develop industries other than oil and gas, and through the free trade agreement Israelis will have excellent access to this trend. “.
What does this mean for the Israeli citizen?
“Any small company or business owner, no matter how small, will benefit from the option of exporting to the UAE or cheap import of raw materials. At this stage it is mainly a matter of importing chemicals for industry.”
CBS data show that in April the volume of trade with the United Arab Emirates reached $ 190 million, a jump of almost 120% from last year. At the same time, the volume of trade with Morocco rose by 30% to $ 2.7 million, with Jordan by 25% To 46 million, and with Egypt by 31% to 23 million.
Silicone Valley Out, Silicone Desert In
This week, Arizona Governor Doug Diocese visited Israel, one of Israel’s greatest friends among the governors, and no less important – the state governor, whose trade with Israel is the third largest after California and New York.
In a conversation with Globes, he explains that his goal is to attract Israeli high-tech companies, entrepreneurs, start-ups and investors to his country. “We have all the conditions for Israeli companies and start-ups to grow with us,” says Diosi. The corporate income tax in Arizona stands at 4.9%, compared to 7.25% in New York and 8.84% in California. At the same time, Arizona (non-federal) income tax for residents is 2.5%, compared to 10.9% in New York and 13.3% in California. The volume of trade between Israel and Arizona in 2021 reached about $ 680 million, and accounted for 1.3% of all of Israel’s foreign trade.
Due in part to the high taxation and cost of living in California and New York, states like Arizona provide a replacement for tech companies looking to find a convenient location for their bases. Diosi mentions that his country is the only one that operates a commercial communications office in Israel, and says that during his visit he focuses on companies that deal with technology related to desert agriculture, salt water desalination, efficient use of irrigation, and solar energy. Another aspect that the Arizona governor dealt with during his visit to Israel is border control. Arizona, like all border countries with Mexico, suffers from illegal immigration from Latin American countries.
Diosi met with President Yitzhak Herzog, Prime Minister Naftali Bennett, his predecessor Benjamin Netanyahu, Jerusalem Mayor Moshe Leon, and several technology companies.