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Israel and Bahrain set to reach free-trade pact

Israeli Tourism Minister Haim Katz and Economy Minister Nir Barkat are expected to visit the Gulf nation soon.

Israeli Ambassador to Bahrain Eitan Na'eh (left) and Bahrain's Minister of Industry and Commerce Abdulla bin Adel Fakhro at a gala event in Manama marking Israel's 75th anniversary, on May 31, 2023. Credit: Israeli Embassy in Bahrain.
Israeli Ambassador to Bahrain Eitan Na'eh (left) and Bahrain's Minister of Industry and Commerce Abdulla bin Adel Fakhro at a gala event in Manama marking Israel's 75th anniversary, on May 31, 2023. Credit: Israeli Embassy in Bahrain.

Israel and Bahrain will soon sign a free-trade agreement, and the island kingdom can serve as a gateway to widening ties with Arab countries in the Gulf, the Jewish state’s envoy to Manama said on Sunday.

Ambassador Eitan Na’eh spoke amid heightened diplomatic efforts to reach a normalization agreement between Israel and Saudi Arabia by the end of the year as well as increasing ties between Israel and Gulf countries.

“There is a potential here to widen our connections not only with Bahrain but to the Arab Gulf states,” Na’eh told JNS. “Bahrain can be the point of connection between East and West.”

He said the two countries would soon sign a free-trade agreement and an investment protection accord.

The date and venue of the signing have not been finalized, although Israeli Economy Minister Nir Barkat is due to visit Bahrain in the coming months.

Israel and Bahrain normalized relations in 2020 as part of the Abraham Accords reached under the Trump administration, which also saw Jerusalem establish relations with the United Arab Emirates, Morocco and Sudan.

Last year, Israel forged a free-trade agreement with the UAE, its first with an Arab country, which officials estimate will increase annual trade from $1.2 billion to $10 billion over the next five years. Economic ties with neighboring Bahrain have lagged behind.

Growing ties and first visits

Israel and the two Gulf states, which share an enemy in Iran, have maintained covert security ties for years. They have become increasingly overt since the signing of the peace agreements.

Last year, then-Prime Minister Naftali Bennett and President Isaac Herzog traveled to Bahrain on separate trips, in the first state visits by an Israeli head of government and head of state to the kingdom.

Last week the Israeli embassy in Manama hosted its second annual reception marking Israel’s Independence Day—the legation’s largest event of the year—after breaking ground by holding the first such event in the Gulf last year.

About 40% of this year’s 300 guests were entrepreneurs, Na’eh said, while the government of Bahrain was represented by Minister of Industry and Commerce Abdulla bin Adel Fakhro.

“We see that there is a growing interest in the business sector to further relations,” the Israeli ambassador said. He cited hi-tech, agriculture, energy, water, cybersecurity and construction as some of the most popular fields of interest to Bahraini entrepreneurs.

Gateway to Saudi Arabia and beyond

Linked to Saudi Arabia via a 15-mile causeway, the Gulf island nation offers Israel a gateway to Saudi Arabia and beyond, with entrepreneurs from all the Arab countries passing through the kingdom.

“There is an interest in Israeli business, even indirectly, among Saudi entrepreneurs and on senior official levels,” Na’eh said.

Still, the veteran diplomat, who served in London, Ankara and Dubai before his current posting, cautioned patience.

“This is not something that happens overnight,” he said. “You need lots of patience with the right work and sensitivity.”

Israeli tourism minister on the way

Seeking to buttress people-to-people peace, Israel’s Tourism Minister Haim Katz will visit Manama later this month.

Since the peace accords were signed, only 600 tourists from Bahrain have visited Israel, while about 6,000 Israelis have come to Manama. The figures are exceedingly low, especially compared to neighboring UAE, due to the fact that Bahrain was closed for much of the corona crisis as well as the need to obtain a visa.

“We do know that tourists are the bridge to better relations,” he said, noting that the Independence Day reception included a collection of photographs taken from Bahrainis who visited Israel.

To buttress peace

Home to the U.S. Navy’s Fifth Fleet, the Shi’ite-majority country has been ruled for the last 240 years by the Sunni Al Khalifa family. Normalization with Israel remains a contentious issue for Bahrain’s Shi’ite majority who, like the rest of the Arab world, have been subject to decades of anti-Israel incitement now magnified on social media.

Yet inroads are continually being sought. A high-tech conference organized with the Tel Aviv-based nonprofit Start-Up Nation Central dubbed “connect to innovate” was held in Manama in March, connecting hundreds of Israeli and Bahraini business leaders.

A proposal to include Holocaust education in the state curriculum in Bahrain similar to the one adopted by the UAE is under review.

“What you are witnessing is just the beginning,” said the ambassador.

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