Backers seek Arizona trade office in Israel

State-funded agency unlikely in near future

RANDI BAROCAS
Staff Writer

If supporters of the Arizona Israel Exchange Commission and Arizona state Rep. Paul Newman (D-Bisbee) get their way, Arizona will establish a trade office in Israel with state funds.

The office, according to David Shefrin, executive director of the private-sector exchange commission, would work to establish product distribution relationships between Arizona and Israeli companies, mainly in the high-technology arena.

"Geographically, Arizona is very similar to Israel," Shefrin said. "There is a lot of commonality between the biotechnical and computer areas."

"I think it (should happen)," Newman said of the state trade office. "We have very similar technology, economy, very similar geographical sources (and) scarcity of water.

"Right now, there seems to be an excess capacity of technological expertise in Israel, partly because of the Russian exodus from the former Soviet Union," Newman added. "There are many technological advances in Israel that could be promoted in Arizona."

Despite those similarities, Newman said it is unlikely that the Arizona state government will agree to foot the bill for the office any time soon.

Before a trade office could be established, a bill must be introduced and passed in the state Legislature, Newman explained, adding that to date, no legislation has been proposed. Although Newman himself supports the concept, he said he cannot propose the bill now because the legislative session is over and he is presently running for the state post of corporation commissioner. If elected, Newman said he would use his new position as a "bully pulpit to promote Arizona-Israel relationships."

Even Shefrin admitted that establishing an office is "not likely right now."

"It would cost Arizona between $30,000 and $40,000 per year to staff a trade office in Israel. That means Arizona would have to generate $400,000 in exports per year to break even," Shefrin said. That figure represents what would be needed for the trade office to pay for itself, since every $50,000 in exports to a foreign country creates $5,000 in tax revenue for the state, he explained.

Considering Arizona already exports between $25 million and $50 million in goods and services per year to the Jewish state, Shefrin acknowledged that reaching the "break-even point" is not the issue. Legislators would not want to authorize a $40,000 annual expense to run a trade office if Arizona-Israel trade is already at what they perceive as a high level, he said.

While that may be the case, Shefrin considers Arizona's exports to Israel "paltry," and believes the state should be exporting upwards of $500 million each year to Israel.

Realizing their dream is temporarily on hold, Shefrin and Newman said they are working on fostering other connections between Arizona and Israel - informal ties that can spur trade without an official trade office.

Newman, who visited Israel earlier this year, established contacts with a network of business incubators that were created by the Israeli government as part of the research and development arm of the office of chief scientists for the country, he said. Newman said he hopes to promote business between the Israeli incubators and those that exist in Arizona, namely one in Scottsdale and one soon to be established by the University of Arizona in the southern region of the state.

As far as his ties to the private trade commission are concerned, Newman said he plans to act as a consultant to the 3-year-old group, "advising them on how we can achieve our goal of bringing Arizona and Israel closer together."

Both Newman and Shefrin acknowledged that there are other options to the state-funded trade office.

"There are many policies we can develop, such as sharing the technological innovations (and) perhaps funding some projects," Newman said. "It doesn't have to be a formal trade office. It could just be one position at the Department of Commerce trying to expedite trade between Arizona and Israel."

Another option, an activity the exchange commission has already engaged in for years, is match-making between Arizona and Israeli companies in related industries. Many of those involved in the commission already have established business dealings with Israeli companies, Shefrin said. The commission also sponsors regular seminars on how to do business with Israel.

The Arizona Israel Exchange Commission will have its next meeting at noon on Wednesday, Sept. 9, at the American Jewish Committee offices, 3443 N. Central Ave., Suite 902 in Phoenix. Those interested in learning more about the exchange commission or establishing business connections with Israeli companies are welcome to attend. RSVP to 248-8845.

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