Israel-U.S. Trade Grows but Missile-related Exports are Still Controlled


Israel-U.S. Trade Grows but Missile-Related Exports are Still Controlled

The Risk Report
Volume 1 Number 5 (June 1995) Page 8

U.S. trade with Israel has doubled in the last ten years. Israel exported $5.3 billion to America in 1994, while U.S. exports to Israel were $5 billion. Today, the United States is Israel's largest trading partner.

Though Israel's rapid progress in space is attracting commercial interest from other countries, many projects are off-limits to U.S. business. U.S. policy is not to aid or encourage foreign space launch projects in countries of proliferation concern, and that includes Israel. "The United States will not support the development or acquisition of space-launch vehicles in countries outside the MTCR," according to a September 1993 fact sheet on export control policy put out by the Clinton Administration.

Israel is not a member of the Missile Technology Control Regime, though Israel promised the United States in 1991 to apply MTCR guidelines to its missile-related exports. "In principle, we would like Israel to join the MTCR," says a U.S. official, "but the time for that is not right." Israel would first have to join the Nuclear Nonproliferation Treaty (NPT), or some regional equivalent, and "demonstrate a track record of effectively implementing MTCR guidelines."

Israel's Shavit space launcher is still off-limits to American exporters. Israel appears on the Commerce watch list (Supplement 6, Part 778 of the Export Administration Regulations) which names countries of concern for missile proliferation. If a U.S. company knows its products will be used in the design, development, production or use of Israeli missiles or rockets capable of delivering a 500-kilogram payload to a range of at least 300 kilometers, the company must apply for an export license.

U.S. policy is not to procure missile technology from countries of proliferation concern, but an exception has been made for Israel. In January 1994, the Clinton Administration decided to allow Israel to compete in the lucrative U.S. space-launch market by permitting future imports of Shavit rocket technology from Israel, even though American exports to the Shavit space launcher are still controlled.