Bilateral US-Israel “free” trade agreement delivers $144 billion deficit to US | bilaterals.org
Bilateral US-Israel “free” trade agreement delivers $144 billion deficit to US
By Grant F. Smith
The cumulative US merchandise trade deficit with Israel from 1985
through 2015 has ballooned to $144 billion adjusted for inflation. Why
are these results so one-sided? By design. The 1985 US “free” trade deal
with Israel was passed among a score of measures in the 1980s designed
to prop up Israel’s tiny, sputtering economy—not to benefit the US. As
recognized by industry opponents
at the time, if the deal were truly about trade, the US would have
sought out a foreign trading partner with a much larger and more
diversified economy.
The “US-Israel Joint Economic Discussion Group” headed up by
economist Stanley Fischer demanded the Reagan administration henceforth
deliver foreign aid to Israel in the form of grants, which did not have
to be repaid, rather than loans. The team also insisted upon the
unilateral elimination of US trade barriers on Israeli goods while
allowing Israel to continue to protect its own domestic industries.
Originally referred to as “Duty Free Treatment for US Imports from Israel”
the spin-masters in the “discussion group,” the Israeli government, and
its foreign lobby the American Israel Public Affairs Committee (AIPAC)
knew a public relations reframing job was necessary if they were going
to pull off the near unilateral lowering of US tariff and non-tariff
barriers.
The deal was therefore rebranded as America’s first “free trade”
deal, conjuring up rosy images of bilaterally, if not equally, lowering
barriers which would force each country’s producers to focus on their
comparative advantages, boosting total trade volumes and making better,
cheaper, more plentiful goods available to consumers in both countries.
