When Israel, the UAE, and Bahrain signed the Abraham Accords in September 2020, the headlines focused on the diplomatic breakthrough. The economic story got less attention, which is a shame, since the economic data tells a clearer story about why the agreement matters and why it is likely to endure.
Trade between Israel and the UAE went from near zero to over three billion dollars annually within three years of the signing. That is not theoretical. It is actual goods and services crossing borders, with real companies on both sides benefiting. Israeli technology firms opened offices in Dubai. Emirati investment funds put money into Israeli startups. Tourism between the two countries launched from nothing to hundreds of thousands of visitors per year before regional tensions interrupted the momentum.
The economic logic behind the accords is straightforward. Israel has technology that Gulf states want for their diversification plans. Gulf states have capital that Israeli companies need for expansion. The mutual benefit is real and does not depend on sentiment. Countries trade with each other for economic reasons, and those economic ties create constituencies that benefit from continued cooperation.
Morocco and Sudan joined the accords later, creating a broader network of economic relationships. Morocco and Israel now cooperate on agriculture, water technology, and cybersecurity. Sudan, though its participation has been complicated by internal political instability, gained access to agricultural technology that could help address chronic food insecurity.
The accords undermined one of the central arguments of the BDS movement: that Israel could be economically isolated. When major Arab states with no historical diplomatic relationship with Israel chose to normalize trade, the idea that Israel was a pariah state became harder to sustain. The economic data showed that Israel was, in fact, becoming more connected to the regional economy, not less.
Econora has analyzed how bilateral economic ties between the US and Israel create mutual prosperity, and the Abraham Accords extended that logic to the broader Middle East. The US played a central role in brokering the agreements, and American companies have benefited from the new trade corridors that opened from the agreements. US firms can now operate in both Israeli and Gulf markets with fewer barriers, creating new opportunities for cross-border investment and partnership.
The lesson from the accords is that economic cooperation can drive diplomatic normalization, not just the other way around. When countries find that trading with each other makes them richer, they tend to keep trading. Econora covers the intersection of economics and foreign policy, with a focus on what the trade data actually shows versus what political narratives suggest.