Speeches

Statements by Senior

Embassy Officials

Remarks by Ambassador Richard H. Jones
American Chamber of Commerce
Annual Awards Dinner
June 4, 2007 at 19:00 pm
CMR

Ambassador Shoval, thank you very much. It is a great pleasure to host you at this evening's Amcham Awards Dinner. We are also honored to be joined this evening by Minister of Industry, Trade, and Labor Eli Yishai. We held last year's event in late November, and I'd like to thank Tami Guy for changing the date for 2007 to allow us to enjoy this beautiful weather.

November was just six months ago, but a lot has transpired in Israel since then, including developments in U.S.-Israel trade. Some of these changes have been good. Some, frankly, have not been.

But let me start with the good news:

U.S.-Israeli trade grew 14% in 2006 to over $27 billion. U.S. exports grew 20% to over $8 billion. The magnitude of this trade reflects the many "extra-economic" synergies, shall we say, of the overall U.S.-Israel relationship. Specifically, our cultural understanding, our shared political and economic vision, and - bringing it more down to earth - the similarities in our everyday consumer tastes and preferences.

In the wake of Warren Buffet's $4 billion investment in Iscar last summer, and Hewlett Packard's $4.5 billion investment in Mercury Interactive that was announced in November 2006, U.S. investment continues to pour into Israel. It is driven largely by the cutting edge synergies in high tech between Israel and the United States.

Israeli companies are just as keen to set up shop in the U.S., and we have witnessed a constant flow of U.S. State delegations visiting Israel in search of companies that are interested in establishing themselves state-side. Just last week, newly elected Florida Governor Charlie Crist was in Israel with a sizeable delegation doing just that. It was no accident that Governor Crist chose Israel as the destination for his first foreign trip as Governor.

In fact, promotion of investment in the United States is soon to become a regular part of the work of the U.S. Commercial Service at the Embassy. The Commercial Service already does an excellent job promoting U.S. exports, which create American jobs and strengthen our gross domestic product. We all remember from basic economics courses that GDP = C (Consumption) + I (Investment) + G (Government Spending) + X (Exports) - M (Imports). We already work on the 'X' in that equation -- "Exports"-- and now we're going to work on the 'I' -- "Investment" -- because both create jobs for Americans.

This new investment promotion service will be called the 'Invest in America Initiative,' and we'll give Amcham members more information about this initiative in the near future.

Another piece of good news involves our long-standing issue of government standards that cause barriers to trade. Although this issue still has a long way to go before it is fully resolved, the U.S. Government did hold productive meetings just last month with the Standards Institution of Israel and the Ministry of Industry, Trade and Labor, which promises to result in greater U.S.-Israeli cooperation on standards. Our goal is to ensure that standards do not become an obstacle to U.S. goods entering the Israeli market. Minister Yishai, we hope that this will be the beginning of the end of a long-lasting irritant between the United States and Israel.

Unfortunately, however, I also have to add that some clouds have gathered on the horizon of bilateral trade relations over the past six months, despite Tami's efforts to ensure clear skies tonight.

The U.S. trade deficit with Israel grew by almost $1 billion in 2006. With Israel exporting almost $20 billion to the U.S. last year, we feel that the United States is doing its part in strengthening U.S.-Israeli trade. In fact, in 2006 we bought almost as much from Israel as we bought from Russia, a country with 20 times the population of Israel.

Giving U.S. exporters greater confidence about exporting to Israel would go a long way toward reducing this trade gap. We continue to look to the Government of Israel to enhance protection of intellectual property rights, which will help provide this greater confidence, especially in such innovative areas as bio and nano technology development.

A famous 19th century British prime minister, Lord Palmerston, once observed that states have no permanent friends, only permanent interests. I disagree. The United States and Israel are friends, and as a friend we are also concerned that inadequate intellectual property protection can hinder Israel's own innovation-driven economy. I hope at next year's Awards Dinner I will be able to discuss IPR developments as a bilateral success story.

Finally, I must voice concern over the recent change in Israel's Mandatory Tenders Law. The change will expand the volume of government procurement that is exempt from the open tendering process. I'm worried that moving more Israel government procurement from open tenders to non-competitive bids will reduce transparency, which increases the opportunity for corruption, and make it harder for new to market companies, including U.S. companies and Israeli start-ups alike, to compete freely and fairly for contracts. In addition, the decline in competition promises to increase prices for Israeli tax payers.

Clearly, we still have matters to discuss and problems to resolve, but as friends, the United States and Israel will continue to strive to strengthen and deepen our relationship and to make our bilateral trade freer and fairer. In fact, before I close I should note that American trade experts are now actively assessing ways in which the U.S. and Israel might seek to enhance our 20 year-old Free Trade Agreement, for example, by including trade in selected services. Talks in this area might also provide a vehicle to address some of the troubling aspects in our trade relations.

Again, I want to thank all the members of the Amcham for the great work you do in promoting stronger U.S.-Israel trade and Tami Guy for her efforts to organize this evening's event and so many others throughout the year. I wish you all a wonderful evening.