Startup nation urged to put business ties with America first
US commerce chief calls for upgraded free trade agreement, less red tape – and tells Israel to find its way to parts of US that don’t know it
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
The US and Israel have just scratched the surface of the potential of the nations’ commercial relationship and with a bit of a push on both sides much more could be done, said Josh Kram, a senior director of Middle East Affairs at the US Chamber of Commerce, which represents three million companies in the US.
“The story of Israel as startup nation has made its way to parts of the US, though so much of our country isn’t aware of what’s happening in Israel and there is much more potential to expand US-Israel business, whether in agriculture, water, health, or advanced manufacturing,” Kram said in an interview during a visit to Israel earlier this month.
In May, the US and Israeli chambers of commerce announced a new multiyear initiative to bring executives from leading business organizations from the US to Israel.
Called Business Israel, the program was set up by the US Chamber of Commerce in partnership with its Israel affiliate the Israel-America Chamber of Commerce (AmCham Israel). It will bring executives from all 50 states to Israel over the next three years to expand markets for American exports and attract investment to the US, as well as collaborate with Israeli companies in a variety of sectors.
“Israel and the US have a special relationship, but security and defense have always played a leading role,” said Kram. “I say, add another leg to that relationship by adding commerce and business. There is a lot of US that is not covered.”
America and Israel have strong economic ties, even if the Jewish nation has been in recent years looking to Asia to boost growth. Israel and the US signed their first free trade agreement in 1985 and there are more companies listed on the NASDAQ exchange from Israel than from any country outside the US.
Forty percent of all investment into the US from the Middle East region comes from Israel, and Israel is the second-largest importer of US goods in its region, despite representing only two percent of the population, according to data provided by the chambers of commerce.
Trade between Israel and the US totaled some $18 billion in January-June 2017 and some $35 billion for the whole of 2016, according to the US Census Bureau.
Kram said that Prime Minister Benjamin Netanyahu should make sure to bring business delegations to the US on his visits, which tend to be mainly focused on political issues. And business relations could benefit from an upgraded free trade agreement, which is already more than 30 years old, he said. Cutting back on Israeli red tape and a stable business environment would also benefit relations, he added.
“The Israeli government has been putting a lot of focus on its ties with Asia and Africa,” he said. “But Israel shouldn’t take the business relationship with the US for granted. On his visits to Washington, Prime Minister Benjamin Netanyahu has a routine, he meets Congress and he speaks to pro-Israel groups. Why not add business to the agenda? There is only an upside to that.”
In its annual “Ease of Doing Business” report for the 2017 calendar year, Israel was given an overall rank as the 52nd easiest place to do business, slightly worse than its 2016 ranking of 49th, out of a total of 190 economies. The 2017 ranking list was topped for the first time by New Zealand, which knocked longtime first-place holder Singapore into second place.
“Israel is not the easiest of countries to do business in. There are improvements that can be made to make it easier to work here,” Kram said.
The US Chamber of Commerce, which is the largest business organization in the world, is the voice of the industry in the US, and also sees itself in charge of promoting bilateral ties between the US and global nations. The US Chamber of Commerce works with Israel firms to expand commercial relations and with the government to promote policies to facilitate these interactions and expand the scope of relations, Kram explained.
The association has also recently been active in the new US-Israeli initiative to collaborate in cybersecurity, trying to be a catalyst for the private sector to pitch in to help boost this opportunity.
The US-Israeli bilateral cyber working group initiative, announced by Thomas Bossert, assistant to the US President Donald Trump for Homeland Security and Counter-terrorism, in June, aims to get the nations to join forces to defend critical infrastructures against attackers and track down perpetrators. It will be led by Rob Joyce, the US White House cybersecurity coordinator, and Israel’s Eviatar Matania, director general of the National Cyber Directorate. It will include US and Israeli representatives from various ministries and defense organizations including foreign affairs and justice, and the secret service.
“We have set up a private sector committee with leading cyber experts and Chief Information Security Officers (CISOs) that is working with the White House and the (Israeli) Prime Minister’s National Cyber Bureau so there is a way for companies and the government to talk with each other,” Kram said. “The aim is to facilitate a dialogue on regulatory issues, new opportunities in R&D cooperation, cyber workforce development, and information-sharing.”
The two countries are also working together on setting up a new $8 million joint US-Israel energy research and development partnership that aims to boost technologies for the natural gas industry, energy storage, water efficiency in energy production, and ways to lower the energy consumption of industries.
The partnership will be a joint research and development virtual center and will focus on collaborative research initiatives among universities, institutions and industry partners.
The center will “fund projects that advance innovation and commercialization of energy technologies that are important to both the US and Israel,” Kram explained. “We have been working to help the governments define priorities areas where the private can join forces to support R&D, such as advancing cybersecurity for energy control systems, water use in energy production, and developing alternative uses for natural gas like the transportation sector. The mechanism of how the center will work is being shaped as we speak, and we are looking at existing models.” The US has set up similar initiatives both with China and with India, he said.
Israel’s closer relationship with India presents an opportunity to create three-way partnership, Kram added. In July, Narendra Modi became the first Indian prime minister to visit Israel in an effort to forge new defense and cybersecurity ties.
“Following PM Modi’s successful visits to both the US and Israel in recent months, the business community is keen to advance commercial relations between our countries. The US Chamber will be organizing a range of events in the coming months on US-Israel-India business cooperation in San Francisco, Washington, DC, and India,” Kram said.
