Reports confirm that Boeing has signed a deal agreeing to spend billions of dollars in the coming decade in Israel, if it wins major defense contracts from Tel Aviv. According to the Economy Ministry of Israel, the reciprocal procurement agreement states that the airplane maker will collaborate with the businesses in Israel for a minimum of 35 percent of the value of any transaction with the government.
The ministry further said that the country anticipates making military purchases of around $10 billion worth from the company over the next 10 years, which translates to Boeing investing about $3.5 billion in Israeli businesses. Boeing is competing for various essential Defense Ministry contracts, like the purchase of transport helicopters, fueling planes and additional F-15 aircrafts, the ministry added.
Industry experts believe this agreement would benefit the U.S. aerospace company, along with making Israel less hostile with respect to a U.S. aid package’s requirements, that diverted the utilization of U.S. funds away from local businesses in Israel.
Eli Cohen, the Economy Minister of Israel, said that this agreement is a considerable achievement which would result in the growth of many businesses in the economy. It would propel their activity along with their success in international markets, he mentioned.
Records show the U.S. government had agreed to provide military assistance worth $38 billion to Israel over the decade under the terms of an official deal between Israel and the U.S. inked by Israeli Prime Minister Benjamin Netanyahu and U.S. ex -president Barack Obama in 2016.
Although, that deal phased out stipulation which permitted Israel to utilize 26.3 per cent of the U.S. military aid for purchasing from its own defense industry as an alternative to buying weapons made in America. As of now, the whole amount of the agreement will now have to be spent on U.S. equipment by 2026.