The relationship between the United States and Israel is one of political, economic and historical significance. Over the years and with changes in economic objectives and priorities, the mutual diplomatic relationship of goodwill between the two nations has provided both countries with essential benefits in economic growth and development.

The Origins of U.S.-Israel Relations

Historically, the growth of U.S.-Israel relations can be traced back to the inception of Israel shortly after the World War II. Since May 14th 1948, the United States has played a vital role in providing aid, advice, resources and assistance to Israel. Between the years 1976-2004, Israel became the largest recipient of of U.S. foreign aid. The Arab-Israeli Wars through the course of the 20th century tested the strength of the staunch diplomatic ties between both nations.

U.S.-Israel relations have helped redefine ties with other Arab nations as well. The U.S. commitment to foreign aid such as humanitarian assistance already plays a key role in international conflicts. In recent years in particular, the United States has continued to play an active role in political discourse in the Middle East and is a vital part of peaceful solutions to crises.

The Trump Administration is now redefining the steadfast U.S.-Israel relations. In a controversial move, President Trump began recognizing Jerusalem as the capital of Israel. Also, with a concrete two-state solution still not on the table, U.S.-Israel relations continue to be challenged.

The Startup Nation

Imbibing the strength of the relationship is vital due to the potential impacts the connection can have on the future. Israel has already contributed to U.S. defense, trade and commerce in numerous ways over the years. In turn, given the potential of Israel’s young and growing population and rich natural resources and assets, U.S. businesses hope to tap into this advantage to expand into new product and labor markets.

Moreover, Israel now already boasts a high annual economic growth which reached a peak at 4.7 percent in January 2017. Since 2003, poverty and income inequality rates in Israel have also largely declined. As Israel remains one of the world’s most advanced economies, it is commonly referred to globally as the ‘Startup Nation.’

Yet, at the same time, according to an estimate made in the year 2012, nearly 19.4 percent of families in Israel still live below the poverty line. Consequently, 1 in 5 Israelis are presumed to be affected by poverty prevalent in the country.

Trade

In the realm of trade, Israel’s trade to the United States is essential as the number of dollars created by exports from Israel create the highest number of U.S. jobs among its free-trading partners. For Israel, the United States remains a vital free- trading partner as it provides the country with an outlet for goods and services.

Furthermore, investment between the U.S. and Israel not only pumps in more Foreign Direct Investment (FDI), but it also plays a significant role in bringing in more American jobs. Investments are now expanding in key aspects like science and technology, agriculture and healthcare; Israeli innovations continually contribute to higher levels of efficiency and productivity as well.

Growth and Future Achievement

In recent years, clean energy, technology and environmental solutions have grown to become priorities of international discourse; in fact, according to a report by the Washington Institute, innovation in Israel is currently focused on addressing water and food security issues globally. U.S.-Israel collaborations in research and development programs are particularly notable for its advancements and contributions to the financial strength of both countries.

To conclude, U.S.-Israel relations continue to be an important source of economic, potential and financial support to both countries — a partnership that continues to grow with time. This varied connection between the two countries will have greater implications in the future, and should also provide a good buffer against shocks in the world economy.

– Shivani Ekkanath

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