The Israel-UAE CEPA Agreement: Mechanics and Tariff Architecture

The Israel-UAE Comprehensive Economic Partnership Agreement (CEPA) was signed in May 2022 and entered into force in April 2023. The agreement, the first comprehensive bilateral trade agreement between Israel and an Arab country, established the broader commercial framework within which the rapidly expanding bilateral commerce of the post-Abraham Accords period now operates.

The agreement

Per Israeli Ministry of Economy and UAE Ministry of Economy publications, CEPA covers four primary substantive areas:

Goods trade tariff elimination. The agreement eliminated or substantially reduced tariffs on over 96% of bilateral goods trade by value. Specific tariff lines, phase-in schedules, and sensitive-sector exclusions are detailed in the agreement public text.

Services trade architecture. The agreement established frameworks for cross-border services trade across professional services (legal, accounting, consulting), financial services, telecommunications, and additional services categories.

Investment protection. The agreement established cross-border investment protection mechanisms providing structural support for direct investment flows in both directions.

Intellectual property protection. The agreement included structural IP-protection components supporting the substantial bilateral technology, defense, and broader IP-intensive commercial activity covered across The Olam's Defense, AI, Cyber, and Diaspora Investment clusters.

The $10 billion trade target

The CEPA agreement set a target of $10 billion in annual bilateral trade within five years of entering into force.

Per Israeli Central Bureau of Statistics bilateral trade data covered in detail at /trade-corridors/uae-israel-bilateral/, bilateral trade grew from effectively zero in 2019 to over $2.5 billion in 2022 and has continued expanding through 2023-2025. The $10 billion annual target is being approached but has not yet been reached.

Specific year-end 2025 and Q1 2026 figures should be referenced from current ICBS, UAE Ministry of Economy, and Federation of Israeli Chambers of Commerce publications.

Sector coverage

The agreement covers substantially all bilateral commerce. Major sector commercial activity since CEPA entered into force includes:

Defense. Covered in detail at /defense/uae-defense-acquisitions/. UAE defense acquisitions from Israeli contractors have grown substantially, with Abraham Accords destinations growing from 3% of Israeli defense exports in 2023 to 12% in 2024.

Fintech and financial services. DIFC and ADGM have hosted growing Israeli fintech presence. Major Israeli fintech operators have established UAE operational presences.

Agritech, water, and food security. UAE strategic priority on food security has driven major UAE-Israel commerce across agritech and water technology. Mubadala, ADQ, and selected Emirati family offices have deployed materially into Israeli agritech.

Cyber and AI. Israeli cyber and AI sector has built UAE customer bases across government, financial-services, telecom, and critical-infrastructure sectors.

Tourism and real estate. Reciprocal real-estate investment activity has continued through 2025-2026 across Tel Aviv (UAE capital into Israeli real estate) and Dubai (Israeli capital into Dubai real estate).

Healthcare. UAE patient flows into Israeli hospital systems (Sheba, Hadassah, Ichilov, and the broader major hospital network) have grown substantially, covered at /health/gcc-medical-tourism/.

The regulatory architecture

CEPA operates within several broader regulatory layers:

• Israeli Ministry of Economy and UAE Ministry of Economy for the bilateral coordination
• Israeli Customs and UAE Customs for tariff administration
• Israel Securities Authority and UAE Securities and Commodities Authority for financial-services coordination
• Israel Ministry of Defense / SIBAT and UAE counterpart entities for defense export licensing
• Israeli IIA and UAE strategic-investment entities (Mubadala, ADQ, EDGE Group) for technology cooperation frameworks

The post-October 7 context

The October 2023-2024 regional security environment and the broader public-relations pressure on individual UAE and Bahraini institutions did not produce structural commercial disengagement. CEPA remained in force; bilateral trade continued growing through 2024-2026.

The institutional infrastructure underpinning the agreement — major UAE acquirers with operational Israeli capability, major Israeli operators with operational UAE capability, the cross-border banking and legal architecture, and the established trade and investment positions — cannot be rapidly wound down.

What 2026-2027 looks like

Three structural dynamics shape the bilateral trajectory through 2026-2027.

First — the $10 billion target. Bilateral trade is on track toward, though not yet at, the $10 billion target. Continued sectoral expansion across defense, fintech, agritech, cyber, and broader categories is expected to drive continued growth.

Second — Saudi normalization trajectory. Substantial reporting through 2022-2026 has documented Saudi-Israeli discussions across multiple sectors and at multiple diplomatic levels. Any formal Saudi entry into the Accords framework would reshape the regional commercial architecture materially.

Third — the broader regional commercial architecture. The 2023 India-Middle East-Europe Economic Corridor (IMEC) announcement, the broader Gulf Cooperation Council economic integration patterns, and the maturing Israel-Greece-Cyprus eastern Mediterranean partnership architecture together produce an emerging regional commercial geography that the Abraham Accords commerce operates within.

Source data: Israeli Ministry of Economy CEPA public materials; UAE Ministry of Economy publications; Israeli Central Bureau of Statistics bilateral trade data; coverage in Calcalist, Globes, The National, Gulf News, Reuters, Bloomberg, Financial Times. CEPA agreement public text. Data current as of Q2 2026.