Posted on 06/21/2005 4:47:28 AM PDT by Dundee
Israeli contractors concerned over US export request
Israeli defence contractors are becoming increasingly concerned over a US Department of Defense (DoD) request to monitor Israel's defence exports. The DoD, while still reviewing Israel's defence contracts with China since June 2004, has recently introduced a draft memorandum of understanding, under which Israel will submit, before signature, any defence export contract for the DoD's review and approval.
"The Americans appear as if they are set to destroy the Israeli defence industry," a senior industry source told JDW. "I can see no reasoning behind the US demands, other than an attempt to eliminate Israeli industries, which compete against American companies in some areas."
When, in June 2004, Washington discovered that Israel Aircraft Industries' (IAI) Harpy attack unmanned aerial vehicles (UAVs), previously sold to China, had been sent back to IAI for spare parts, DoD officials claimed that Israel was upgrading the Chinese drones, and that it had misled the Pentagon over the nature of the contract. The Israeli Ministry of Defence (MoD) insisted that IAI was performing maintenance on the UAVs, in accordance with the original sale contract which, it noted, was openly presented to the DoD.
While the Harpies do not include any US technology, and therefore do not require US approval for export, Israel agreed to the DoD's demand to confiscate the Chinese UAVs until the matter is resolved.
However, the Israel Air Force's participation in the F-35 Joint Strike Fighter (JSF) project was practically suspended and Israeli partners of other joint military projects with the US began meeting increasing bureaucratic constraints. Moreover, Israeli companies operating in the US were faced with unusual obstacles in their dealings with the DoD. "The damage is not yet severe," Moshe Keret, President of IAI told JDW. "But we should resolve the issue quickly, before the damages become serious."
However, other industry sources said that Israeli companies already risk losing business opportunities due to the crisis, such as Elbit Systems, which competes on providing head-up display systems for the F-22 Raptor. "Elbit has a very clear policy on the issue of transferring technologies," Joseph Ackerman, President and Chief Executive of Elbit told JDW. "I believe that the issue will soon be resolved."
However, while reviewing the specifics of Israeli-Chinese ties, the DoD presented new demands regarding the whole Israeli defence export apparatus. US officials told their Israeli counterparts that the DoD is preparing a memorandum of understanding which will regulate US monitoring of Israeli defence exports. That has raised serious concerns among the Israeli industry, which fears that the US intends to limit Israeli defence sales to countries other than China, particularly India. "This attempt is designed to bolster the competitiveness of US companies against Israeli companies in many and diverse areas. Israeli industry absolutely cannot agree to this," Israel Export and International Co-operation Institute Chairman and Manufacturers Association President Shraga Brosh said in response.
Israeli Minister of Defence Shaul Mofaz, who recently appointed retired brigadier general Zvi Shtauber as the new mediator for the crisis, told JDW : "Israel will maintain its independence with regard to defence exports." However a senior defence source expressed doubts: "If the US, which provides Israel with $2 billion in annual military aid, demands that we will not sell anything to China - then we won't.
"If the Americans decide we should not be selling arms to other countries as well - Israel will have no choice but to comply".
Earlier this year the DoD appointed Deputy Undersecretary of Defense for Technology, Security Policy and Counterproliferation, Lisa Bronson, to review the case. Bronson has demanded that Israel provide the DoD with specific details of 60 different defence contracts signed with China over the last decade. However, despite Israeli statements that it provided elaborated answers to hundreds of US queries regarding Israeli relations with China in late 2004, the crisis deepened and began affecting other aspects of US-Israel relations.
Simultaneously the DoD practically severed all ties with Israel's Ministry of Defence (MoD). US officials have made it clear they will not negotiate with Amos Yaron, Director General of Israeli MoD and with his US representative, Kuti Mor, both accused by senior DoD officials of misleading them.
"I don't think that these disagreements are personal," said Mofaz. "I think that it is a matter of principle, and we deal with it as such." However, several senior sources confirmed that US officials indicated they have no intention of resuming work with either Yaron or Mor. "Although not stated explicitly, it is obvious that as long as the two are in office - the Pentagon will continue to ostracise Israel's MoD," a senior defence source told JDW.
One of the rare articles that accurately explains the dispute over the Harpys.
No worries mate, I thought somebody here might be interested :)
Thanks. It's factual rather than hysterical, so it may not draw many replies.
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