There’s been a lot of news in recent months suggesting that the unique and special relationship between the U.S. and Israel should probably take a two-week vacation at a luxury spa.

The good news is that Israel continues to receive its annual grant from the U.S. which currently stands at about $2 billion/year (down over 20% over the past couple of years, and much more if one takes inflation into account). [Of that money, by the way, 75% must be spent in the US on US-made products, which is why defence contractors lobby at least as aggressively as AIPAC to maintain this grant for the Israelis, as well as the Egyptians and the Jordanians]. The US continues to strongly support Israel on the UN Security Council, albeit with the occasional hiccup. Both Congress and the Senate continue to show strong support for Israel, and the Administration has at least been paying lip service to its strong support of the Jewish state.

However, there have also been dark clouds casting a lachrymose shadow upon the relations between the two states. Today, for example, Larry Franklin, a non-Jewish Pentagon analyst, was indicted on charges that he provided classified information about Iran to an Israeli embassy official as well as two AIPAC employees (who have since been fired by AIPAC). The AIPAC men are involved because the FBI developed a sting operation to target them. However, both they and the Israeli official (Naor Gillon) had been tracked for 2 years by the FBI. Ultimately, there appear to be no charges made against Israel and its officials, but the time and resources spent on this operation, and its ultimate demeaning of Israel on what seems to be a minor set of offenses with little intelligence value is indicative of some deeper hostility or animosity on the part of certain US government agencies, or at least key people within those agencies.

On another front, the simmering dispute between the US and Israel regarding arms sales to China now seems to have boiled over. In short, the US suspects that Israel has been sending sensitive arms to China that may include technology the Chinese cannot acquire on their own and that enables them to develop certain technical capabilities sooner than they would otherwise. There is also a suspicion that Israel is including, in the arms it sells, American technology.

Seeking to control the situation, and perhaps also to undermine the Israel arms industry, the US has now made a number of demands including the removal of Defense Ministry Director-General Amos Yaron because they claim he has misled them on certain details pertaining to Israeli arms sales to China. In addition, the Americans now want to have veto power over sales of arms to China, are boycotting the Defense Ministry’s representative in the US who is supposed to be the liason between the two countries, and is demanding more information on 60 previous deals the Israelis have had with China. In addition, according to the Associated Press,

It also wants Israel to reevaluate its system for supervising arms deals, and wants to sign a joint understanding with Israel regulating future arms sales.

In the meantime, Washington has frozen Israel out of the development of Lockheed Martin Corp.’s F-35, a next-generation warplane being developed with several foreign participants.

It has also suspended cooperation on development of an advanced imaging system for Israeli forces, frozen collaboration on the Hunter 2 unmanned attack aircraft, and suspended the delivery of parts of night-vision equipment to the IDF.

Note that Turkey is one of the countries participating in the F-35 development. The exclusion of Israel is not a small matter because it will not be able to create its own products that have the ability to interact with the plane’s system, and will also have no input into its development.

The third development that has now come up involves pharmaceuticals. In an article (fee required) for the Jerusalem Report, Hanan Sher outlines how the US has listed Israel along with 13 other countries (including China and India) on the Priority Watch List of the Office of the US Trade Representative (USTR) as countries that allow the violation of intellectual property rights, including patents.

This particular angle of attack comes after the Israelis are attempting to modify their 1998 patent law to address certain US concerns, but are apparently doing it in a way that does not satisfy many of the high powered pharmaceutical companies that have to compete with Israel’s generic drug industry headed by Teva Pharmaceuticals. Teva is a very important company for the Israeli economy and the engine that keeps the TASE (Tel Aviv Stock Exchange) humming. It generates billions of dollars, employs a large number of Israelis and foreigners and is a fairly well run company. Teva also keeps winning patent law suits in the United States, thus enabling it to offer at a discount its generic counterparts to the big pharmas name drugs. Needless to say, the threat here is not only to the pharmaceutical industry, because the USTR can impose sanctions upon a country, and Israel has a robust high tech sector that could suffer greatly.

Are these three challenges connected? They come from different governmental bodies, they tackle different problems between the two countries, to some degree it could be argued that 2 of the 3 matters involve the push of large US industries seeking to stifle competition.

And yet, it’s a troubling trend. It’s becoming a little too commonplace to see the Israel bashing happen. It may be because Israel’s strategic value is diminished in a post-Cold War world. It may be that having a US presence in Iraq also has tarnished Israel’s value to the Americans.

I think it is also that Israel is now in a position where its value and contribution to the safety and security of the US are openly questioned by those who seek to weaken it. Is Israel a liability in a world run over by Islamic extremists who like to use the Jewish state as a foil? Are Americans involved indirectly in an occupation that has taken on an unsavory presence in the media? Are Zionists who are also neo-cons guiding America’s policies and thereby harming the nation?

These are all questions that are being openly asked not only by neo-Nazis or pro-Palestinians or Islamic groups. These are questions posed by serious and respected columnists and politicians who may have little love for Israel, but can use their platforms to cause some intense discomfort.

Israel finds itself in a tough place. Its key ally and political benefactor remains the US. On the other hand, dependence on one country to this degree causes the type of situation we see now where suddenly Israel is faced with harsh and harmful economic and diplomatic choices. What is worse is that all it takes is an intent organization (public or private) or key people within it, and suddenly an issue can be hijacked with Israel depicted as the villain.

Should Israel not develop an alliance with the growing China? Isn’t it prudent to have another world player as a benefactor? Is there any doubt that in the next 20-30 years China will become another superpower? If so, shouldn’t Israel court this growing superpower? Has China expressed the type of hostility to the US that would cause the US to treat Israel so abjectly for its arms deals (assuming the allegations are true, something the Israelis are denying), or is it fair to say that the Americans have also invested deeply in their relationship with China?

Should Israel amend its patent laws because an American industry wants to squelch the Israeli competition? If it does, how will it replace the lost jobs and taxes, not to mention the stock market meltdown? On the other hand, what will happen if it doesn’t and sanctions are launched?

These are not simple issues, and ones where Israel will have to make painful choices. It was already forced into this corner a couple of years ago when Sharon’s government was strong-armed by the Administration into accepting the Road Map. It was declared by the Israeli Cabinet at the time that Israel was accepting it with 14 reservations. None of those reservations are mentioned by any international party today – including the Israelis. A deeper look at the Road Map suggests some dangerous clauses for Israel, and yet this is an American-driven agreement.

Let’s hope these are hiccups and not a trend.

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