Iran, UAE forge cooperation

Iran and the United Arab Emirates (UAE) cozying up to each other at a time when Abu Dhabi is taking its normalization with Israel to a new level has sent political pundits in the region into a tizzy. What is also intriguing is that the estranged neighbors are looking to bury the hatchet, Anadolu Agency writes.

The new Iranian administration's approach appears to be strikingly different from its predecessor, which had antagonized Emirati officials with hard-hitting statements after Abu Dhabi trumpeted its "full normalization" with Tel Aviv in August 2020. "On the face of it, recent geopolitical developments do appear somewhat baffling, but they only point to political pragmatism," Massoud Akbarpour, a Tehran-based strategic affairs analyst, told Anadolu Agency. The new Iranian government, he said, has realized the importance of taking along neighbors and trade partners, despite differences with them.

Importantly, the two Gulf countries have been on the opposite sides of geopolitical rivalries for years. Abu Dhabi is part of a Saudi-led coalition fighting Houthis in war-ravaged Yemen. It backed former US President Donald Trump's decision to launch a “maximum pressure” campaign on Iran in 2018. And more importantly, it normalized ties with Tel Aviv, allowing top Israeli officials to make whirlwind visits to the Arab country.

Diplomatic engagement

After the UAE declared full normalization of ties with Israel in August 2020, Iran's then-President Hassan Rouhani termed it a “betrayal of the Palestinian cause", warning the Emiratis against “bringing Israel to the region”. Then-Foreign Minister Javad Zarif, who had interacted with his Emirati counterpart just a week before the normalization was announced, decried it as a "stab on the back of the regional countries." Almost 18 months later, the two estranged neighbors are back on the table, discussing diplomacy and trade.

While subtle warnings about "Israeli presence" in the region continue to be made by top officials in the new Iranian government, there is a new-found political will in Tehran to diplomatically engage with the UAE. "Rapprochement with Abu Dhabi is part of the “neighborhood-first” strategy adopted by the Ebrahim Raisi government, as Abu Dhabi is a key trade partner for Tehran," a senior diplomat told Anadolu Agency. He, however, hastened to add that Tehran's stance on UAE-Israel normalization as well as Abu Dhabi's involvement in the Yemen war "will remain unchanged".

New bonhomie

Four months after the new Iranian cabinet was unveiled, UAE's National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan visited Tehran and held talks with his Iranian counterpart, Ali Shamkhani, as well as President Ebrahim Raisi. During their meeting, Raisi told the visiting official that his government's priority was to “improve ties with regional countries", while emphasizing on bolstering the Gulf security. As expected, he also raised the issue of Israel gaining foothold in the region through normalization deals, cautioning that UAE-Iran relations "must not be influenced by outsiders".

The remarks by Raisi, a conservative figure, were remarkably milder compared to his reformist predecessor's sharp diatribe in August 2020, signaling a new approach in Raisi's foreign policy. "The rare visit by a senior Emirati official was an important confidence-building measure after years of coldness in relations," said Mehrdad Amini, a security analyst and journalist. "Sending Tahnoon, the top Emirati security official, was meant to reassure Iran that the neighborhood will not be allowed to be used against it,” he added. Anwar Gargash, a diplomatic adviser to the UAE president, in a tweet that time said Sheikh Tahnoon's visit to Tehran was part of "UAE’s efforts to strengthen bridges of communication and cooperation in the region which would serve the national interest". At an online event in December, Gargash acknowledged that the two countries had "differences", but said they realized the need to deal through diplomacy and economic cooperation to "manage these crises".

Neighborhood

In recent months, dialogue between Iran and the UAE has continued at multiple levels. The foreign ministers have held phone conversations many times. In their last conversation on February 2, Iran's top diplomat Hossein Amir-Abdollahian told his Emirati counterpart that the Israeli presence constituted a "threat to the regional security". He also asserted that the "continuation of the war" in Yemen was "not in the interest" of any parties.

"What it suggests is that while Iran continues to be wary of Israel's destabilizing presence on its borders, it has come to realize the importance of Dubai as a key trade route," Amini told Anadolu Agency. "The new administration in Tehran has pledged to focus on the neighborhood and neutralize the impact of sanctions, so it can ill-afford to lose the UAE."

More recently, on January 19, hostilities between the UAE and Iran-backed Houthis in Yemen took a new turn after rebel drone strikes shattered calm and stability in the Gulf country. It was seen by many as a message to the UAE not to make another foray into the protracted war in Yemen.

Another strike from Houthis came as Israeli President Isaac Herzog was making his first visit to the UAE late January, weeks after Naftali Bennett became the first Israeli premier to visit the Arab country. While soaring tensions delayed the Iranian president's proposed visit to Abu Dhabi, it did not cause any major disruption in ongoing efforts by Iran and the UAE to turn the page in their fractured relationship.

UAE-Iran trade

The UAE continues to be Iran's top trading partner in imports and third-largest partner in exports, pointing to a massive trade potential between them. The Gulf country forms a critical cog in the new Iranian administration's plan to neutralize sanctions by engaging in trade with regional countries.

Earlier this month, Iran's Trade Minister Reza Fatemi Amin led a high-level delegation to Abu Dhabi, where the two sides reached a series of trade agreements. According to Alireza Peymanpak, the head of Iran's Trade Promotion Organization, an Emirati delegation is now expected to visit Tehran in coming days to finalize those agreements and take the conversation forward.

Speaking at an event recently, Amin said Iran had managed to attract foreign investments worth $300 million from the UAE in recent months, which would materialize in coming months. Both sides have set the target of $30 billion annual trade by 2025, from $15 billion at present, with focus on gold, diamonds, metals and metallic raw materials.

"There is a tremendous potential for trade, most of which remains untapped," said Mazhar Hussain, an economic analyst and researcher, pointing to 28% annual rate of trade between the two countries between 2001 and 2011, which nosedived after the imposition of financial sanctions on Iran in 2012.

With Iran and the remaining parties to the 2015 nuclear accord on the verge of clinching a deal in Vienna, experts say the UAE can play a key role in facilitating Iran's trade and helping its economy rebound. "Increased interaction between Tehran and the UAE, coinciding with diplomatic efforts in Vienna, must be seen in the context of Iran's desire to revitalize its economy without being dependent on the West," said Hussain.