Ties between the diamond industries of two countries grew rapidly after the Abraham Accords
On September 17, 2020, just two days after the signing of the Abraham Accords in Washington and the establishment of diplomatic relations between Israel and the United Arab Emirates, the Israel Diamond Exchange (IDE) and the Dubai Diamond Exchange (DDE) signed a cooperation agreement.
The document committed IDE and DDE to establish offices at each other’s headquarters and to promote bilateral trade and joint projects.
The speed with which the agreement was concluded certainly indicates the enthusiasm with which the world’s two main diamond exchanges have entered a new era of partnership. But it also reflected another less publicized fact: that long before official ties were established between Israel and the UAE, businessmen from both countries were linked through the trade in gemstones. One could even say that the road of open economic cooperation between Israel and the Emirates created by the Abraham Accords has been paved with diamonds.
For Israel, the diamond industry is a long-standing key sector of its economy whose beginnings predate the establishment of the state. The trade in precious stones had for centuries attracted Jewish merchants from a diaspora dispersed throughout the world and in need of a universally accepted and easily transportable currency. In the 1930s, Jewish merchants from Germany immigrated to pre-state Israel, bringing their expertise in polishing and trading gemstones. The IDE was established in the Tel Aviv suburb of Ramat Gan in the 1960s and today has some 3,100 members, while cut and polished diamonds account for around 23% of Israeli exports.
The UAE is a new powerhouse in the global diamond market, but it has made remarkable progress over the past two decades. Dubai’s position as a preeminent regional commercial hub and magnet for global luxury tourism, and its proximity to Asian centers of gemstone production, have made it a natural hub for the industry. The DDE, which was established in 2002 under the aegis of the Dubai Multi Commodities Center (DMCC), has over 1,100 licensed companies. It now manages some $25 billion in total trade, twice that of Israeli FDI.
After the Abraham Accords, ties between the diamond industries of Israel and the United Arab Emirates grew rapidly. DMCC opened a representative office within IDE Ramat Gan at the end of 2020 – and IDE did the same at DMCC Dubai last February.
Israel exported $188 million worth of crude diamonds in the United Arab Emirates in 2021, and that number is certain to increase after the two countries signed a free trade agreement in June, eliminating tariffs on 95% of products, including reducing tariffs on diamonds and precious stones from 5% to zero.
And the role played by the diamond trade in foreshadowing ties between Israel and the United Arab Emirates may be replicated elsewhere. Although Israel and Qatar still do not have formal diplomatic relations, the two reportedly reached an agreement allowing Israeli diamond traders to do business in a new free trade zone for gems and gold in Doha, modeled on the Dubai DMCC. .
So the sparkling diamond-paved path to Abraham’s Accordscould still end up extending even further into the Gulf.
Calev Ben-David is a presenter of the nightly news program “The Rundown” on i24NEWS