2013 Briefing Book - Print Version - Aipac

RELATIONSHIP
The agreement has also served as a tool of economic diplomacy, creating the conditions for
peace and helping to integrate Israel more fully into the region. Using the agreement as legal
underpinning, the U.S. and Israel signed individual agreements with Jordan (1996) and Egypt
(2004), creating Qualifying Industrial Zones (QIZ) where jointly produced goods are afforded
duty-free access to the United States. Goods produced in the West Bank and Gaza Strip, when
administered by the Palestinian Authority, also benefit.
Bilateral trade has spiked in each case. QIZ factories in Jordan count almost 15,000 employees,
representing $500 million per year in exports to the United States. More than 100,000 Egyptians
are employed in more than 700 participating QIZ companies.
U.S. Companies Flock to Israel
The United States and Israel share a culture of innovation. American heavyweights such as Intel,
Motorola, Apple and Google have capitalized on Israel’s entrepreneurial spirit and world-class
talent pool, establishing major R&D centers throughout the country. With the most Ph.D.s and
published scientific papers per capita in the world, Israel has become the preeminent foreign
outpost for computer technology, telecommunications and software industries, with roughly 100
U.S. companies active in Israel. More Israeli companies are traded on the NASDAQ than any
country outside the United States and China. For example, Facebook recently acquired Face.com,
an Israeli facial recognition software company that created the popular photo-tagging application;
Apple recently acquired Anobit, an Israeli flash memory storage company.
In 2006, esteemed investor Warren Buffet’s Berkshire Hathaway made its first-ever foreign
acquisition, buying 80 percent of Iscar, an Israeli maker of precision blades and drills. When asked
the reason for his interest in Israel—which, only weeks earlier, had fought a war with Hizballah in
Lebanon—Buffet’s response pointed to the spirit that marks the economic drive of both the United
States and Israel: “[Israel] had no advantages 50 years ago…. What they brought was brains and
energy and look how it paid off…. They are the best that I’ve seen.”
Eric Schmidt, chairman of Google Corporation, echoed that sentiment. “We should expect much
more investment in high technology in Israel,” he said, adding: “For a small country, Israel will
have an oversized impact on the evolution of the next stage of the technology we all use.”
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