Wednesday, February 10, 2021

Trump Trade Deal Shows Results as Israel Links with UAE

It Seems Money Still Makes the World Go Round
Shipping News Feature

UAE – ISRAEL – The detractors of ex-President Donald Trump might wish to re-evaluate at least part of his legacy in the light of the burgeoning trade between such as Dubai and the State of Israel.

Even Trump’s successor, Joe Biden, hailed the trade deal, known as the Abraham Accords, negotiated by his predecessor as ‘welcome, brave and a badly needed act of statesmanship’. The agreement between Tel Aviv and UAE is only the third such ever negotiated with its Arab neighbours, the others being Egypt (1979), and Jordan (1994) but the logic, in terms of trade, is impeccable.

Obviously there are detractors, Turkish President Erdogan said he might suspend diplomatic relations with the UAE, which considering his behaviour whilst in office would be the least of his policies to upset anyone. Palestinian leaders were understandably upset, the agreement denting the Arabian solidarity they seek to gain back land stolen in 1967 following the Six Day War.

Despite Dubai, and in fact Abu Dhabi, publicly decrying the occupation still, it seems trade conquers all, and now Israel has signed up to the ‘World Logistics Passport’ (WLP), an initiative established to increase trading opportunities between emerging markets emanating from Dubai and aiming to make it a major distribution hub for goods carried between member states such as India, South Africa, Indonesia, amongst others.

A virtual signing ceremony with the Federation of Israeli Chambers of Commerce (FICC) saw Israel become the tenth signatory and the ceremony was was attended by Sultan Ahmed Bin Sulayem, Chairman of Dubai's Ports, Customs and Free Zone Corporation (PCFC), and Amir Shani, Vice President of the Federation of Israeli Chambers of Commerce, as well as other Israeli executives from the Chamber. Bin Sulayem, said:

“Dubai is a global trading mega hub with world-class infrastructure that enables the movement of goods between nations through the fastest routes possible, creating time and cost efficiencies. Today, we welcome the Federation of Israeli Chambers of Commerce into the World Logistics Passport, as we further strengthen and elevate ties between our two nations.

”Through the WLP we aspire to forge closer economic ties and harness our collective experience, to unlock new trade opportunities for Israel with the world, via Dubai, and with Tel Aviv as a major logistics centre.”

Trade between Dubai and Israel reached a value of AED 1 billion ($272 million) between September 2020 and January 2021. This included 6,217 tonnes of sea-freight and air-freight moving between the two nations. Major imports and exports included mechanical and medical devices, electronic devices, flat screens, smart phones, diamonds, and engine spare parts. Amir Shani commented:

“We are very excited about joining the World Logistics Passport global network as a partner. We believe our members will greatly benefit from this global incentives programme to expand their trade opportunities. This partnership will allow Israeli companies to reduce cost and improve their supply chain to and from Israel using Dubai as logistical hub for new markets.

”The Abrahams Accords and Israel’s connection to Dubai enables it to become a regional and global player and open new trade routes, possibilities and business exchange. This in return will reduce the cost of living and promote business growth in the most needed time of Covid-19 crisis. Moreover, the specific incentives under the relief tier of the WLP should further improve the logistics of our Covid-19 vaccine distribution.

”The FICC continue to lead the private business sector and to advocate for free global trade by building business platforms such as the WLP and partnering with the Dubai Chamber of Commerce to facilitate business-to-business interactions.”

Its proponents say that through the WLP, traders can expect to save 25% on freight costs and 10% on transit time. The claim is for instance that the traditional cargo journey taken from Israel to South East Asia for high-value, low-weight goods through historically established transport routes in Asia takes considerably longer, and is therefore more expensive, than if the goods pass through Dubai.

The WLP loyalty programme aims to provide traders with a number of financial and non-financial benefits for increased trade volumes, spread across a four-tier membership scheme. Global brands leveraging the WLP and its benefits include anchor tenants such as UPS, Pfizer, Sony, Johnson & Johnson, and LG, all part of the programme’s Platinum tier. The WLP also provides participating members with access to Gold and Silver tiers of benefits, which vary based on the value and frequency of trade.

As part of Israel’s participation in the WLP, the country will be part of the programme’s Relief Tier, which supports humanitarian organisations and governments in providing relief in crises. In the case of Covid-19 all companies registered as WLP members involved in vaccine manufacturing and distribution will receive immediate cost and time efficiency benefits and part of the Gold Tier of membership. The WLP Relief Tier promotes and reinforces Dubai’s position as a global crisis logistics hub for humanitarian supplies.

With Israel’s entry into the programme, both countries will be strengthening their bi-lateral ties through close cooperation on Covid-19 vaccine distribution and supply chains. Furthermore, Israel will benefit from increased freight through Dubai while providing humanitarian organisations an efficient, centrally located hub for their logistics in the region.

The WLP says it has a proven track record. In Dubai, 15 local providers have confirmed more than 50 benefits which have in turn been applied to over 300 traders, accounting for approximately 50% of the emirate’s trade. Since its inception in 2019, the WLP has generated more than AED 3 billion in total trade.

Photo: President Trump announcing the deal in September 2020.