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US Companies Move to Suspend US-Israel Trade Agreement

By Grant Smith

 IRmep, March 24, 2010

Washington, DC.  US industry and worker stakeholders will for the second time seek an immediate suspension of Israeli trade preferences granted under the 1985 US-Israel Free Trade Area.  Declassified FBI files released on the Internet last week confirmed for the first time that the American Israel Public Affairs Committee (AIPAC) and the Israeli Ministry of Economics colluded and obtained confidential private business information and trade secrets of US industries opposed to the agreement.
In February of 1984 the US International Trade Commission (ITC) solicited the data under strict secrecy provisions from US industries concerned about reducing US tariffs and quotas on Israeli goods.  It was compiled into an ITC report called "The Probable Economic Effect of Providing Duty-Free Treatment for Imports from Israel.  Investigation No. 332-180", the report is still classified.
According to publicly released FBI criminal investigation files, the Israeli Minister of Economics secretly obtained and passed the classified report to the American Israel Public Affairs Committee.
AIPAC's chief lobbyist made an illicit copy of the stolen document after AIPAC's executive director was ordered to return it to the US Trade Representative.  The Washington Post reported that "some of the proprietary information, moreever, could help Israeli businesses competing with US companies."
In April of 2009 stakeholders from 37 states filed a 93 page Section 301 petition with the US Trade Representative over endemic Israeli violations of US pharmaceutical patents, the use of diamond sales in the US to finance illegal West Bank settlement construction and decades of targeted theft of proprietary US national defense technologies.  Israeli exports of diamonds and other precious objects to the US totaled $5.7 billion in 2009.
In its 2010 Trade Policy Agenda on enforcement activities the Obama administration "decided not to initiate an investigation in response to the [2009] petition on several grounds, including that the issues raised in the petition would be addressed more effectively through the established Special 301 process." 
These other processes have clearly failed, making suspension in 2010 urgent according to Grant F. Smith, director of the IRmep.  "The recent US criminal indictments of Ben-Ami Kadish and Stewart Nozette over alleged economic related espionage underscore how Israeli intellectual property violations continue to subvert American wealth creation.  The crimes alleged in the newly declassified FBI files are a direct assault not only on the Trade Act of 1974 but rule of law itself.  They will be 'Exhibit A' in IRmep's expanded second USTR legal filing calling for the immediate suspension of Israel's trade preferences."
The trade agreement locks many US products of export quantity out of the Israeli market.  The US-Israel trade pact delivered an $80 billion dollar cumulative deficit (adjusted for inflation) to the US since enacted.  In contrast, other bilateral agreements with such countries as Singapore and Morocco actually produced more than $86 billion in total trade surpluses to the US in 2009 alone.
Industries interested in publicly or privately supporting the second USTR filing or seeking disgorgement via civil action should contact the Institute for Research: Middle Eastern Policy, Inc. in Washington at 202-342-7325, via fax at 202-318-8009 or email at .  IRmep is a private nonprofit that studies how warranted law enforcement and civil action can improve U.S. Middle East policy.

Institute for Research: Middle Eastern Policy, Inc.
Grant Smith, 202-342-7325
Fax: 202-318-8009





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