Israel giving up on exports to Japan, Russia?
In wake of financial crisis, Export and International Cooperation Institute decides to freeze transfer of NIS 12 million allotted for encouragement of exports to two countries
Some NIS 12 million (about $2.97 million) have already been allotted for this goal out of a NIS 30 million ($7.42 million) budget for the encouragement of trade with key countries. The IEICI now plans to focus on promoting Israeli trade with three other target countries: China, India and Brazil.
The decision followed seven months during which the IEICI was involved in a process aimed at locating an Israeli company which would be responsible for advancing trade relations between Israel and Japan.
As part of the process, negotiations were held with 15 companies. One of them – DECAGON – claimed that its advanced talks with the IEICI included a draft contract.
The decision to freeze the budget was made unanimously at the IEICI plenum, in a meeting attended by Boaz Hirsch, director of foreign trade administration at the Industry, Trade and Labor Ministry, and the manufacturers' representative.
The decision stemmed from the global financial crisis, which badly hurt Japan and Russia in the past year. The IEICI and Industry Ministry's working assumption is that promoting exports to these two countries would be ineffective at this time.
According to estimates, the boundaries of trade with Japan and Russia are high, so encouraging exports to these countries would not yield immediate results. Other moves to advance the trade relations with the two countries, some financed by the Foreign Ministry, will continue as planned.
Against government's policy?
It appears, however, that the decision made by the IEICI and the Industry, Trade and Labor Ministry led by Minister Eli Yishai contradicts the Israeli government's official policy.
A visit by Prime Minister Ehud Olmert to Japan about a year ago concluded with the message that there was a need to reinforce the business relations between the two countries. This message was strengthened in a phone call between Olmert and Japanese Prime Minister Taro Aso last December.
Irit Ben Aba, deputy director-general for Asia at of the Ministry of Foreign Affairs, said in response, "Japan is a very important country and the second largest economy in the world. Our relations with it have not been halted. They have only been frozen for now, and I hope we'll resume our activities with it.
"Some of the reasons for the decision were not economic, and may be linked to the difficulty to find a suitable partner in the target country. Japan will always be a target country for us, particularly for Israeli high-tech."
An Industry Ministry official said, "The change in the list of priorities was made in light of the sever changes in the global economy. Other activities, including online trade and exhibitions, have been expanded, and it has been decided to preserve financial backup in order to remain flexible in the face of future changes."
An IEICI official said in response to the report, "We'll focus on executing the plans in India and China."
