The US-Israel Free Trade Agreement

April 22nd, 2010 at 12:00 pm by David Farrar

An e-mail from the US Democratic Leadership Council highlights that 25 years ago and the US signed a agreement.

The change in aid and trade in that time has been massive

  1. Aid has reduced from $3.7b to $2.3b
  2. Services trade has gone from $1.0b to $7.5b
  3. Goods trade has gone from $2.4b to $44.2b

The US used to supply more in aid, than trade to Israel. Now their trade is more than 20 times greater than their aid.

Europe and the US should drop their trade barriers so that we have more trade, and less need for aid.

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33 Responses to “The US-Israel Free Trade Agreement”

  1. dime (10,222 comments) says:

    impressive numbers.

    im gonna channel a leftist “how much of that is weapons trade? weapons used to murder innocent Palestinians!”

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  2. gingercrush (153 comments) says:

    Oh please. That fucking trade as you so call it is just fucking aid in the first place.

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  3. stephen (3,981 comments) says:

    I was actually thinking the aid was just another way of giving more military aid, but Wikipedia cites two sources in saying:

    In 2007, the United States increased its military aid to Israel by over 25% to an average of $3 billion per year for the following ten year period, while ending economic aid

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  4. krazykiwi (8,040 comments) says:

    Aid (“there now, have some of this with love from us”) morphs into ‘trade’ quite readily (“ok, we give you this and you give us your vote at the UN”). China is quite adept at this, as is Japan

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  5. Jack5 (5,286 comments) says:

    The surge isn’t due entirely to the dropping of trade barriers.

    Israel has benefited enormously from a huge influx of highly educated Russians, many of them scientists and engineers.
    They have fuelled the take-off of Israel’s high technology, and high tech goods generally meet fewer trade barriers any way.

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  6. krazykiwi (8,040 comments) says:

    Israel has benefited enormously from a huge influx of highly educated Russians, many of them scientists and engineers.

    Perhaps Israel could spare NZ few of these valuable people .. and we could trade them our excess of liberal arts graduates.

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  7. sonic (1,995 comments) says:

    More proof you are not an economist David, What matters is not the volume of trade but the balance of trade (the difference between what you import over what you export)

    So if we accept your unsourced figures (and why they are unsourced is in itself interesting, where did you get them?) we see the US is saving what $1.4 billion ish in aid, Meanwhile on the latest available figures for 2009

    http://www.census.gov/foreign-trade/balance/c5081.html#2009

    They are running a deficit to Israel of around $9.1 billion dollars. Total saving through their FTA, er, -$7.7 billion.

    Might be worth leaving economics to the grown ups David old chum.

    xxx

    S

    [DPF: The figures came in an e-mail from the DLC, as I said. They are the centrist Democrats. And only in your neo-communist outlook is it all about balance of trade. US citizens get to buy Israeli goods cheaper or better than US ones. That is good for the US. I know you think imports are bad, but they are not]

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  8. Luc Hansen (4,573 comments) says:

    Europe and the US should drop their trade barriers so that we have more trade, and less need for aid.

    I’m afraid the conclusion doesn’t follow from the conclusion, unless we agree that developing nations can maintain their trade barriers, which I suspect you do not. Many farmers in small economies, for example, would be put out of business by an unprotected influx of mass produced products eg from NZ in the case of dairy products, and since they cannot be turned into computer pr poling experts overnight (OK, polling expertise could be obtained overnight, sorry) the country as a whole would require even more aid.

    I certainly agree that we need to find an alternative to aid, but it’s a bit like democracy: it ain’t very good but it’s the best we have.

    As for Israel, I was recently told an old Israeli that I don’t think is funny, but I am sure you and your Israel fan club will enjoy: “We Israelis are 75% agnostic or atheist but 100% of us believe that God gave us this land.”

    Ha ha

    Now look, we all know that most of the aid and trade is in weapons, and that the US still sees Israel as the forward command post to control the US oil that just happens to be under Arab (and Persian) lands – until the oil runs out or a viable alternative is discovered.

    That thought should make every Israelis blood run cold.

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  9. krazykiwi (8,040 comments) says:

    David, you crafty old bugger. Haven’t seen our Israel-hating chums causing havoc for a while, so a quick post on US and Israel to flush them into the open again… Well done :)

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  10. Luc Hansen (4,573 comments) says:

    Missed the editing, sorry, baby was around my feet.

    Obviously, I meant the conclusion doesn’t follow from the reasoning.

    And I could add that the overwhelming support of the UN member nations for the rights of indigenous peoples also bodes ill for the long term future of Israel.

    Another reason why they should forgo basking in their military invincibility and think what will happen when, as sure a night turns into day, the world will demand that Palestinians are accorded their rights.

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  11. RRM (10,104 comments) says:

    Pointing to Israel-USA as an example to prove the worth of anything has got to be one of the most unscientific statements since Columbus landed on Hispaniola and concluded: I’m on land, and I’m west of Europe, that must mean I’m at the East end of Asia.

    The raft of strings between USA-Israel has got to be the most intense of any two countries anyone could point to. “Jews fullas keep the A-rabs scared, so we don’t have to, we’ll help you mmmkay?” being one of the more major ones. It is therefore impossible to generalise anything about free trade or otherwise from this. We can’t see the full picture and never will. And how can you hope to prove a hypothesis if you can’t cut out all the other interfering factors?

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  12. GJ (329 comments) says:

    Israel is an amazing country, just look at some of these stats below. Surely NZ can do better than what we are.

    Subject: Facts About Eretz Israel …

    Geography:
    Israel is only 1/6 of 1% of the landmass of the Middle East .
    Israel is roughly half the size of Lake Michigan .
    The Sea of Galilee , at 695 ft. Below sea level, is the lowest freshwater lake in the world.
    The Dead Sea is the lowest surface point on earth, at about 1,373feet below sea level.
    Israel is the only nation in the world that entered the 21st century with a net gain in it’s number of trees.
    Jericho is the oldest continuously inhabited town in the world.
    The Mount of Olives in Jerusalem is the oldest, continually used cemetery in the world.

    Demographics:
    Israel ‘s population is half the size of Metro New York City.
    Israel has only 2% of the population of the Middle East .
    Israel has the highest ratio of university degrees per capita in the world.
    Israel produces more scientific papers per capita than any other nation in the world – by a large margin.
    Israel has the highest number of scientists and technicians per capita in the world – by a large margin.
    Israel has the highest number of engineers per capita in the world.
    Israel has the highest number of PhD’s per capita in the world.
    Israel has the highest number of physicians per capita in the world.
    Israel has the largest percentage of it’s workforce employed in technical professions in the world.
    Israel is the largest immigrant-absorbing nation in the world, per capita.
    Israel is the only country in the Middle East where the Christian population has grown over the last 50 years.
    Israel is the only country in the Middle East where Christians, Muslims and Jews are all free to vote.
    Israel is the only country in the Middle East where women enjoy full political rights.

    Economics:
    Israel has the largest number of start up companies per capita in the world.
    Israel is the world’s largest wholesale diamond centre, finally surpassing Antwerp in the 1970’s. Most of the cut & polished diamonds in the world come from Israel .
    Israel has the largest number of NASDAQ listed companies outside of the US and Canada .
    Israel was the first country to have a free trade agreement with the United States .
    Apart from the Silicon Valley , Israel has the highest concentration of hi-tech companies in the world.

    Electronics:
    The cell phone was developed in Israel at Motorola’s largest development centre.
    The Voice Mail technology was developed in Israel .
    In the early 80’s, IBM chose an Israeli-designed computer chip as the brains for it’s first personal computers.
    The first anti-virus software for computers was developed in Israel in 1979.
    Most of the Windows NT and XP operating systems were developed in Israel by Microsoft.
    Both the Pentium-4 and Centrino processors were entirely designed, developed and produced in Israel ..
    The Pentium MMX Chip technology was designed in Israel at Intel.
    Israel has the highest number of home computers per capita in the world.
    The technology for the AOL Instant Messenger and ICQ was developed in 1996 by 4 young Israelis.
    Israel was the first Middle Eastern country to launch a satellite, the Ofek 1, on September 19, 1988 .

    Culture:
    Hebrew is the only case of a dead national language being revived in all of world history.
    Hebrew had not been spoken as a native tongue by anyone for centuries.
    Today it is the native tongue of millions of people.
    Israel has more museums per capita than any other nation in the world.
    Israel has more orchestras per capita than any other nation in the world.
    Israel publishes more books per capita than any other nation in the world.
    Israel publishes more books translated from other languages than any other nation in the world.
    Israel reads more books per capita than any other nation in the world.
    The most independent and free Arabic press in the Middle East is in Israel .

    Military/Security:
    Israel has the largest fleet of F-16 aircraft outside of the US .
    Israel has the world’s most impenetrable airline security.
    Israel spends more money per capita on it’s own protection than any country in the world.

    Other:
    Israel ‘s dairy cows are the most productive dairy cows in the world.
    They average 25,432 pounds of milk per cow per year, compared to just 18,747 pounds from American cows; 17,085 from Canadian cows;
    13,778 from European Union cows; 10,207 from Australian cows; and 6,600 from Chinese cows.
    Israel has more in-vitro fertilization per capita than anywhere in the world, and it’s free.
    Israelis, per capita, are the world’s biggest consumers of fruits and vegetables.
    Of the 175 UN Security Council resolutions passed before 1990, 97 were directed against Israel . Of the 690 UN General Assembly
    resolutions voted on before 1990, 429 were directed against Israel .

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  13. Repton (769 comments) says:

    @GJ: They’re certainly doing well for themselves.

    So why do they still need $2.3b in aid from the US each year?

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  14. GJ (329 comments) says:

    Repton: That is a question that I also don’t know the answer to. But what I do know is that whoever supports Israel seems to do OK in the long run

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  15. Bevan (3,232 comments) says:

    The raft of strings between USA-Israel has got to be the most intense of any two countries anyone could point to. “Jews fullas keep the A-rabs scared, so we don’t have to, we’ll help you mmmkay?”

    Do you actually realise how blatantly ignorant you are?

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  16. Fale Andrew Lesa (473 comments) says:

    Repton,

    One would think that your question is more suitably posed to the Americans to answer, it is after all the Americans who are ‘dishing out’ the annual funding to Israel and not vice versa.

    One thing is certain however – there doesn’t seem to be an American public outcry to cease such aid to Israel and until such time, the government has no real obligation to act on this.

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  17. RRM (10,104 comments) says:

    [Quoting GJ]: That is a question that I also don’t know the answer to. But what I do know is that whoever supports Israel AND ALSO HAS THE WORLD’S MOST POWERFUL MILITARY AND ECONOMY seems to do OK in the long run [/quote]

    Fixed that for you ;-)

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  18. RRM (10,104 comments) says:

    Bevan: Your actual points against, please, or STFU.

    [And look up “blatant” in the dictionary. It does not mean what you think it means.]

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  19. Bevan (3,232 comments) says:

    So why do they still need $2.3b in aid from the US each year?

    Mostly it is military aid, unlike us they dont get to enjoy the security of a benign strategic environment.

    From the day the state was created, they have had to fight off their neighbours – and also for most of their history without the aid from the US.

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  20. Bevan (3,232 comments) says:

    RRM: [And look up “blatant” in the dictionary. It does not mean what you think it means.]

    Actually I said blatantly, but it has the same meaning…
    Blatantly
    (adj.) Unpleasantly loud and noisy:“There are those who find the trombones…
    (adj.) Totally or offensively conspicuous or obtrusive: a blatant lie.

    To say you are being blatantly ignorant is a valid use of the word. Much like if I said you were being totally ignorant in your understanding, or that your ignorance is actually offensive. Basically I’m calling you an uneducated moron regarding this issue.

    RRM: Bevan: Your actual points against, please, or STFU.

    My point is, you are ignorant of the whole issue, your biased view of the entire state of Israel, the aid supplied by the US and the reasons for it comes from a biased and ignorant understanding of the history and the conflicts in the area.

    Your sentence: “Jews fullas keep the A-rabs scared, so we don’t have to, we’ll help you mmmkay?”

    That sentence, quite frankly is disgusting.

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  21. RRM (10,104 comments) says:

    ^^^That sentence, quite frankly is realistic. Faux hipster sensitivity towards all things Jewish or not. It’s only “disgusting” because it’s uncomfortable. To you.

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  22. Bevan (3,232 comments) says:

    ^^^That sentence, quite frankly is realistic.

    Only because you are ignorant of the history of the region, and the reasons behind the US providing Military aid to Israel – you view of Israel is completely biased. And your view is not realistic, but rather a bigotted simplistic one.

    Faux hipster sensitivity towards all things Jewish or not.

    Admitting it is the first step. At least you acknowledge your a fake.

    It’s only “disgusting” because it’s uncomfortable. To you.

    Your opinion in no way makes me uncomfortable, as you dont have any means of influencing much that matters. You opinion is nothing more than just the sad ravings of an ignorant bigotted little man.

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  23. RRM (10,104 comments) says:

    :-D LOL and you keep deflecting away from my point about what a flawed case study for Free Trade Agreements this is, and attacking my supposed anti-Semitism/anti-Israel prejudices instead. You don’t have any substance, so you just smear. Or perhaps you think speaking up for Israel will curry brownie points for you with DPF?

    The topic went —–> that way.

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  24. Kris K (3,570 comments) says:

    GJ 1:26 pm,

    But what I do know is that whoever supports Israel seems to do OK in the long run

    And I think you and I may both know the reason WHY those who support Israel do ok.

    [Hint: Gen 12: 2&3]

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  25. side show bob (3,410 comments) says:

    Damn right Kris K, poor towel heads are fighting a battle they can’t and won’t win. This is what really gets up their and their supporters noses. They just can’t except that Israel has the big G on their side.

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  26. Bevan (3,232 comments) says:

    LOL and you keep deflecting away from my point about what a flawed case study for Free Trade Agreements this is, and attacking my supposed anti-Semitism/anti-Israel prejudices instead.

    HAHAHAHAHAHAHA! You have a very inflated sense of self importance dont you! If you consider the crap you typed to be a “case study”, you are seriously deluded! Thanks for the laugh though – I needed it!

    There is nothing of yours to deflect as you have not said anything worthy of deflecting! I think its hilarious that you think you have!

    Shit, now people are looking and asking why I’m laughing – thank you RRM, that is the funniest thing I’ve read this week!

    You don’t have any substance, so you just smear.

    Oh dear – you need look to revise your posts before accussing someone else of a lack of substance!

    Or perhaps you think speaking up for Israel will curry brownie points for you with DPF?

    Oh god, you are flailing about now aren’t you! I highly doubt that DPF would agree with my views on Israel, he is far too limp wristed!

    The topic went —–> that way.

    So has your credibility..

    Again, thanks for the laugh!

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  27. wat dabney (3,850 comments) says:

    - “What matters is not the volume of trade but the balance of trade (the difference between what you import over what you export)

    This is plain wrong.

    Firstly – looking at the balance of trade against just one country as you do – even if Israel didn’t buy a single thing from America it would still be America’s interest to continue to trade. The reason being that even though Israel doesn’t want to buy anything from them, other countries do, and some of those countries will make things that Israel wants to buy. Dollars change hands, then change hands again as they are traded back to the US by third parties. Everyone’s a winner

    So clearly, complaining about a trade deficit with a particular country is completely meaningless.

    Secondly, and now looking at a country’s overall balance of trade, there is absolutely nothing inherently wrong with running a continued capital account surplus (aka trade deficit) as countries like the US do. In fact, vibrant economies often will run a trade deficit as foreigners trade goods in order to aquire the capital to buy into that economy. There is no debt automatically implied by a trade deficit.

    – “Might be worth leaving economics to the grown ups David old chum.

    Indeed.

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  28. RRM (10,104 comments) says:

    “If you consider the crap you typed to be a “case study”…”

    But that’s just it moron, I don’t. You really haven’t been reading at all. And yet you know you disagree with whatever it is you think I said.

    “There is nothing of yours to deflect”

    Again, I ask: how is it possible to take a clear-cut measure of US/Israel trade when their relationship goes so far beyond mere trading partners?

    But you enjoy your “Look, here’s another damn anti-semite!” hobby horse, I can see it works for you.

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  29. Hurf Durf (2,860 comments) says:

    Ignore RRM, he’s just another anti-Western bedwetter.

    That thought should make every Israelis blood run cold.

    Doubt it. It’s not 1972. Israel is strong enough to stand up on her own.

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  30. MikeNZ (3,233 comments) says:

    So why do they still need $2.3b in aid from the US each year?

    aid, they have to spend 70% of it with US weapons companies.
    The improvements the Israelis make to the US equipment and systems more than pays for the difference and that is real time upgrading.

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  31. RRM (10,104 comments) says:

    [Hurf Durf]: “Ignore RRM, he’s just another anti-Western bedwetter.”

    Dude WTF?? What has being “for the west” or “against the west” got to do with the topic?

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  32. kiki (408 comments) says:

    side show bob (2284) Says

    just can’t except that Israel has the big G on their side

    the G what?

    was this G around when europeans were putting them in ovens? was it around when spain sent them packing? was it around when those various pogroms were going?

    israel as it stands has only existed since 1949 there has been short periods through history of a jewish type state but permanence is not a given. I think that it is the big NB that they really place their faith in.

    Also if this so called G is theirs what the hell are those other people putting their faith in? I’m sure it wouldn’t support another side would it?

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  33. sonic (1,995 comments) says:

    Oh David you really do not get economics do you

    ” only in your neo-communist outlook is it all about balance of trade”

    Did you used to be a neo-communist making posts about trade deficits, this post certainly appears to show that

    http://www.kiwiblog.co.nz/2007/10/listen_to_the_economics_teacher.html

    Poor David, 1-0 to me yet again. Leave economics to the grown ups.

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