Rabbi Serena Eisenberg and Israel's then-Consul General Shlomi Kofman at the AJC Diplomats Seder at Congregation Sherith Israel in San Francisco, March 22, 2018. (Photo/AJC-Mariah Tiffany)
Rabbi Serena Eisenberg and Israel's then-Consul General Shlomi Kofman at the AJC Diplomats Seder at Congregation Sherith Israel in San Francisco, March 22, 2018. (Photo/AJC-Mariah Tiffany)

35 years on, what does the U.S.-Israel Free Trade Agreement mean to California?

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This piece first appeared in Alert and is reprinted with permission.

Today is the 35th anniversary of the U.S.-Israel Free Trade Agreement, the first free trade agreement signed by either country. To mark the occasion, Alert, the publication of the California Chamber of Commerce, interviewed Shlomi Kofman, Israel’s S.F.-based consul general to the Pacific Northwest, about the significance of the agreement and the current state of trade between the United States and Israel. This morning, the California Chamber of Commerce and the U.S.-Israel Business Council of the U.S. Chamber of Commerce presented the U.S.-Israel Virtual Trade Forum to celebrate the agreement’s anniversary and inspire the next generation of bilateral commerce.

Alert: What makes the trade relationship between Israel and California unique?

Shlomi Kofman: Despite some differences, there are a sea of similarities, which has served as the foundation of friendship, creating enormous bilateral contributions in fields such as agriculture, health care, business, security and water management.

Our strong bond between Silicon Valley and “Silicon Wadi,” Israel’s tech ecosystem, is responsible for creating many innovative products and solutions. More than 100 California tech companies have R&D centers in Israel or have acquired cutting-edge Israeli startups.

From Salesforce to Nvidia to Apple, Cisco, Google, Facebook and many others, California companies are inspired by Israeli talent which, in return, also brought many startup companies to California, generating hundreds of thousands of jobs in both economies. Between 2018 and 2019 alone, San Francisco Bay Area companies invested close to $3 billion in Israeli tech companies.

Israeli technology was also harvested to combat the California water crisis, using Israeli water desalination and treatment technology to help secure California’s precious water supply. Israeli tech also brought unique agriculture models and technology to support California.

Thos Israeli innovative spirit is not only embraced by the tech sector, but also by top California academic institutions and Israeli universities, which conduct groundbreaking joint research in many fields.

The economic consequences of the Covid-19 pandemic will continue to be tremendous, but Israel is leading the world in developing new responses to the virus, including therapies, treatments and technologies for tracking and tracing.

Scientists and physicians in leading universities from California and Israel are working together on providing better care for Covid-19 patients. Stanford Hospital and Rambam Hospital in Haifa have signed an agreement to advance scientific efforts together to work on new research and treatments for Covid outbreaks.

What does the U.S.-Israel Free Trade Agreement mean for Israel today?

The U.S.-Israel Free Trade Agreement was the very first free trade agreement that either country ever signed. It served as a model for the rest of the world to move forward with trade liberalization and significantly contributed to solidifying a greater economic framework between Israel and the U.S.

As a result of this agreement, two-way trade totaled nearly $35.5 billion in 2018, according to the United States Trade Representative. The United States is Israel’s largest trading partner, exporting to Israel $13.7 billion in goods in 2018 — a fivefold increase since the enactment of the agreement.

Israel is also the United States’ 23rd largest trading partner,with the U.S. importing from Israel $21.8 billion in goods, representing a 900 percent increase since the agreement.This progress could not have occurred without the benefits that the free trade agreement provided to each country.

But this agreement is not the only factor in the growing economic cooperation between the United States and Israel. Other bilateral institutions established prior to the FTA include:

•   The Israel-U.S. Binational Industrial Research and Development Foundation, established in 1977 to generate mutually beneficial cooperation in the private sector, which generated more than 280 joint successful projects between Israeli and California companies.

•   The U.S.-Israel Binational Agricultural Research and Development Fund, a competitive funding program for mutually beneficial, mission-oriented, strategic and applied research of agricultural problems, jointly conducted by American and Israeli scientists. Most projects focus on increasing agricultural productivity, particularly in hot and dry climates like California, and emphasize plant and animal health, food quality and safety, and environmental issues.

•   The U.S.-Israel Binational Science Foundation, which promotes scientific relations between the United States and Israel by supporting collaborative research projects in a wide range of basic and applied scientific fields.

It is clear that California and Israel have a strong and secure trading and economic partnership based on mutually shared values. The Consulate General of Israel will continue to strengthen those partnerships and serve as a focal point to foster the exchange between California and Israel.

Susanne T. Stirling
Susanne T. Stirling

Susanne T. Stirling is the vice president for international affairs of the California Chamber of Commerce.