AIPAC, Espionage and the US-Israel Free Trade Agreement

"During the recent visit of Prime Minister Yitzhak Shamir of Israel, President Reagan agreed that the Government of the United States would enter into negotiations with the Government of Israel with a view to the establishment of a free trade area between the United States and Israel.....I request the Commission to conduct an investigation, pursuant to section 332(g) of the Tariff Act of 1930, and to advise the President, with respect to each item in the Tariff Schedules of the United States as to the probable economic effect of providing duty free treatment for imports from Israel on industries in the United States producing like or directly competitive articles and on consumers."

"[332-180] Probable Economic Effect of Providing Duty-Free Treatment for Imports from Israel...Institution of an investigation..."

"On behalf of our principals, company suppliers and nine hundred, long-time employees, we urge you to do all that you are empowered to do in order to obtain a statutory exemption for import sensitive, agricultural products such as: canned tomatoes, tomato products and apricots, regarding the Reagan Administration's proposal for free-trade legislation with Israel."

"We employ about 150 people year round, 550 people during tomato processing season, and have 261 farmers growing tomatoes for us.  I would hate to see us all put out of work because of an agreement with Israel or any other country."

"The American-Israel Chamber of Commerce and Industry, Inc. requests to appear and testify before the International Trade Commission during its hearing on the proposed United States-Israel Free Trade Area.

US Senator Dale Bumpers:  ".. all of us are concerned about the potentially serious consequences that an FTA could have upon the United States bromine industry, a small but vital sector of the American economy..."

"The Israeli bromine industry enjoys a series of subsidies and other special advantages...To begin with, the Israeli bromine industry is government-owned."

Governor Bill Clinton: "So I would just plead with you to consider the enormously concentrated adverse economic impact of including bromine in this FTA, because 85 percent of the production is concentrated in two small rural counties..."

�"because of Israel's small size and limited production capacity relative to the U.S., there is little reason to fear major short term negative effects from increased Israeli imports into the U.S�.The proposed Free Trade Area is therefore a two-way gain "both countries will reap the benefits from the pact..." "...keeping the proposed FTA as 'clean' as possible and avoid gutting the agreement by carving out exception after exception."

"I am appearing on behalf of the American Fiber/Textile/Apparel Coalition (AFTAC) which is a national coalition of the U.S. domestic fiber, textile and apparel complex.  Members of the group are located throughout the United States and produce most of the textiles and apparel items made in this country.  On behalf of the coalition, I would like to say that we have had the opportunity most recently to consider and evaluate the proposal to create a Free Trade Area with the State of Israel and have concluded that it is a very bad idea and should not become a reality."

"..a local concern has been able to take advantage of the procedural shortcomings in the Israeli "patent opposition system," the granting of a patent to Monsanto has been blocked."

"Three fourths of Israel's chemical industry is owned by the government and it receives substantial export subsidies....In the decade ahead Israel will become an increasingly active exporter of these products and may cause some market discontinuities in the U.S..."

"our government should make the distinction between the advanced developing and developed countries with a strong current account position (such as Taiwan, Hong Kong and Japan) and those with severe balance of payments problems..."

"Based on the information gathered in the U.S. International Trade Commission's investigation of the proposed free trade area, the Commission does not expect duty-free treatment for U.S.  imports from Israel to have a significant adverse effect at the aggregate level for any of the major sectors examined; however, at the less aggregated commodity level, significant adverse effects are likely in seven different product areas as discussed in the report."

"...I am concerned about possible economic harm to import-sensitive California specialty crops posed by a blanket free trade area...I'm gratified to know that you will consider the possibility of exemptions...and urge you to review carefully the case for exempting certain specialty crops, especially tomatoes, dehydrated onions and garlic, fresh cut roses, artichokes and olives.

"As you know, the Commission completed its investigation and sent the report to the USTR on May 30, 1984."

Article "FBI Investigates Leak on Trade To Israel Lobby" The Washington Post -  Final Edition:

"The FBI is investigating how the major pro-Israel lobbying group obtained a copy of a classified document that spells out American negotiating strategy in trade talks with Israel, government officials said yesterday.

The document, a report from the International Trade Commission to U.S. Trade Representative William E. Brock, contains proprietary data supplied by American industries and other sensitive information for the negotiations, which began early this year.

Trade officials said the report would give Israel a significant advantage in the trade talks because it discloses how far the United States is willing to compromise on contested issues. Some of the proprietary information, moreover, could help Israeli businesses competing with U.S. companies, officials said.

A spokesman for the American Israel Public Affairs Committee (AIPAC), the principal pro-Israel lobbying group in this country, acknowledged that the organization had a copy of the report but said the lobbying group did nothing illegal."

"The US Bromine Alliance provided very sensitive cost information to the Commission in response to the Commission's requests for confidential business data in connection with its report on a free trade agreement with Israel.  The Alliance presumes that these data were quoted in the Commission's confidential report to the USTR, a copy of which was obtained by representatives of the American-Israel Public Affairs Committee..."

"You requested us to describe, characterize, or specify what business confidential information submitted by the U.S. Bromine Alliance in your letter of April 27, 1984 was included in the U.S. International Trade Commission's confidential report to the U.S. Trade Representative on investigation No. 332-180, Probable Effect of Providing Duty-Free Treatment for Imports from Israel...

Specific business confidential numbers extracted from the Alliance's letter and shown in the report included: (1) the production cost for bromine, (2) production cost, raw material cost, depreciation or manufacturing cost, by-product cost, and shipping cost for the compound TBBPA and (3) the length of time that sales of domestic TBBPA could be supplied from inventory."

"The Commission provided USTR with such advice on May 30, 1984, as a result of investigation No. 332-180.  At the request of USTR, that investigation was conducted in all respects as though the advice had been requested under section 131.  A public hearing was held.  Notice of the investigation and public hearing was published in the Federal Register of February 15, 1984..."

"In response to USTR's request received December 10, the Commission has redesignated investigation No. 332-180 as investigation No. TA-131(b)-10, with no change in scope of the investigation.  The Commission has notified USTR that the advice provided on May 30, 1984 in connection with investigation No. 332-180 is to be considered as the Commission's advice for the purpose of this investigation."

Israel is placed on USTR Priority Watch List for "unfair commercial use of undisclosed test and other data submitted by pharmaceutical companies seeing marketing approval for their products."

Israel remains on USTR Priority Watch List for "inadequate protection against unfair commercial use of data generated to obtain marketing approval."

"In order to maintain the general level of reciprocal and mutually advantageous concessions with respect to agricultural trade with Israel, on July 27, 2004, the United States entered into an agreement with Israel concerning certain aspects of trade in agricultural products during the period January 1, 2004, through December 31, 2008 (the ``2004 Agreement''). The 2004 Agreement reflects an effort by the United States and Israel to address, through 2008, their continuing differences over the meaning of certain provisions in the USIFTA governing access for U.S. agricultural products to Israel's market."

"The report is being withheld in full pursuant to 5 U.S.C. 552(b)(1), which pertains to information that is properly classified in the interest of national security pursuant to Executive Order 12958."