Israel and the United Arab Emirates (UAE) launched talks to establish a free trade agreement between the two countries, Israel's Economy Ministry said on Tuesday.

Economy Minister Orna Barbivai on Monday held a virtual meeting with her Emirati counterpart, Abdulla Bin Touq Al Marri, to kick off the negotiations. Other senior Israeli officials on the negotiating team are now in Dubai until Thursday for more talks, the ministry said.

Israel and the UAE normalised relations last year and bilateral trade in goods alone reached nearly $500 million so far in 2021 – up from $125 million in 2020 – and is expected to continue growing rapidly.

"This agreement will significantly strengthen trade between the two countries, remove barriers and expand economic cooperation," Barbivai told Bin Touq Al Marri, according to her ministry.

Ohad Cohen, director of Israel's Foreign Trade Administration and head of Israel's negotiating team, said he intended to reach a deal with the UAE on issues relating to trade in goods and services, regulation, government procurement, e-commerce and the preservation of intellectual property rights.