Does the US see UAE ties as a means to curb Chinese investments in Israel?
The arrival of the first- ever official government delegation from the United Arab Emirates in Israel this week came with an announcement that the countries, along with the US, were launching the Abraham Fund.
The Jerusalem- based fund that has been established with a commitment from the three participating states will mobilize over $ 3 billion in investments. It is meant “to identify and initiate strategic projects with a high developmental impact, including those that catalyze economic growth, improve standards of living, and create high- value, quality jobs,” the Abraham Fund said in a statement.
The fund is already involved in two projects. The first is “MedRed.” Israeli pipeline company EPAC had just struck a preliminary deal to transport oil from the UAE to Europe via a pipeline connecting the Red Sea from Eilat to the Mediterranean at Ashdod Port.
The second is an effort to modernize checkpoints to facilitate travel of Palestinians in Israel and to and from Jordan.
The mission statement kicking off the fund says it is “an integral part of the peace accord signed by the UAE and the State of Israel... and demonstrates the benefits of peace by improving the lives of the region’s peoples.”
Much has been said and written about the Trump administration bucking common foreign policy wisdom in fostering peace between Israel and Arab states – even though peace with the Palestinians is nowhere to be seen – and about how this strengthens the US- aligned regional alliance against Iran.
BUT WHAT if this peace agreement, and now the Abraham Fund, serve an additional American foreign policy interest in another part of the world?
This week, foreign affairs Prof. Walter Russell Mead – whom Politico called a “Trump whisperer” – wrote in his Wall Street Journal column, penned after conversations with US National Security Advisor Robert O’Brien and UAE Ambassador to the US Yousef al- Otaiba: “One suspects Washington would welcome having America’s Gulf allies displace China as an important source of foreign investment in Israel.”
Less than an hour after the Abraham Fund was announced, Mark Dubowitz, CEO of the Foundation for the Defense of Democracies, a think tank thought to be influential in the Trump administration, tweeted: “Hopefully this will also help displace Chinese investment in Israeli critical infrastructure, assuming the criteria allow for investment in enhancing Israeli economic resiliency.”
Asked whether these analysts, who seem to have US President Donald Trump’s ear, are right, and whether discouraging Israel from relying on Chinese investments for its critical infrastructure was a consideration in the Abraham Fund’s founding, a State Department source said tersely: “Reducing dependence on the Chinese Communist Party is a good thing.”
In recent years, the US has warned Israel against allowing China to get involved in critical infrastructure projects, such as desalination plants, ports and the planned Tel Aviv light rail network. The US has ramped up pressure globally on the issue this year, something that is not expected to change regardless of who sits in the Oval Office next year.
Israel has made at least a superficial effort by setting up a committee to evaluate foreign investments, but American and Israeli experts have warned that it does not have the authority to effect change to quietly reject Chinese companies on projects such as the Sorek 2 desalination plant.
The US has zeroed in on communications infrastructure as being potentially dangerous in terms of Chinese intelligence operations, and Communications Minister Yoaz Hendel said he “sees eye to eye” with the Americans on the issue.
Israel is not yet part of the US State Department’s “Clean Network” of countries who meet their standards of data privacy and protection of sensitive information “from aggressive intrusions by malign actors, such as the Chinese
Communist Party,” but a Trump administration source said in August that he was confident Israel would soon commit to exclude Chinese technology from its 5G mobile networks.
Still, two months later, Israel isn’t yet a “clean” country, and there is still no truly robust system to ensure that Chinese investments in infrastructure or in Israeli tech companies are not used in a hostile manner.
The UAE and Israel made peace just over two months ago, and the potential for economic cooperation, especially Emirati investments in Israel, is a central message all the countries involved have relayed repeatedly. Those investments could very well come in place of Chinese ones, and companies based in Dubai may win tenders that Beijing could have won handily in the past. The Abraham Fund is already involved in a pipeline project.
The UAE is a wealthy country, but it is small and does not possess the same broad range of industries as China. In fact, the UAE had welcomed Chinese partnerships in its own infrastructure projects.
Also, the UAE is one of about a dozen countries with what Beijing calls a “comprehensive strategic partnership” with China. Abu Dhabi Crown Prince Mohammed bin Zayed al- Nahyan met with Yang Jiechi, a member of the Chinese
Communist Party’s politburo, earlier this month, and they reaffirmed that partnership.
Still, as a US ally, Abu Dhabi could also face pressure to reduce its entanglements with Beijing, and Iran could pose a major threat to the UAE, but Israel and the Gulf state have been negotiating a strategic partnership of their own that would include military cooperation.
China may not have been foremost on anyone’s mind when the US fostered the IsraelUAE normalization, but it seems as if there is potential for weakening Beijing’s economic ties with Jerusalem, and this would be an added bonus for Washington.