The head of Israel’s Manufacturer’s Association has warned that accepting President Barack Obama’s proposal that the entire 10-year defense assistance package should be spent on American arms would have dire consequences for the Israeli economy, The Jerusalem Post reported.
Shraga Brosh urged Prime Minister Binyamin Netanyahu not to agree to Obama’s provision: “The Israeli government’s acceptance of Obama’s plan would be a mortal blow to Israel’s defense manufacturing, and mean the loss of thousands of jobs in Israel in favor of the Americans,” he said.
The statement came after Reuters reported on Tuesday that Obama wanted to do away with the existing arrangement by which 26.3 percent of the aid is converted to shekels and spent in Israel each year. It was described as one of the “snags” in the months-long negotiating process for the ten-year deal, which has been the subject of intense speculation since Netanyahu said in February may not be concluded until a new president is in office
Such a restriction in the aid package would adversely affect not only the defense industry but Israeli manufacturing generally. The defense industry, Brosh said, accounts for about 15 percent of all Israeli manufacturing jobs, and every $1 billion in defense procurement supports 2,000 direct jobs and 5,500 overall jobs in the economy.
The White House has not commented directly on the specifics of the negotiations.
“These discussions are continuing and we remain hopeful we can reach agreement on a new MOU [Memorandum of Understanding] that will build on the United States’ historic and enduring commitment to Israel’s security,” a White House official said in response to a Reuters request for confirmation of the latest negotiating terms.