Israeli lawmakers urged the government on Monday to reopen talks with the United States on a defense aid deal signed in 2016 in the hope that President Donald Trump might ease a requirement that American aid money be spent on U.S. equipment.
Under the deal signed by Prime Minister Benjamin Netanyahu and then-U.S. President Barack Obama, the United States was to provide Israel with $38 billion in military assistance over 10 years, the largest such aid package in U.S. history.
However, one component of the deal was to phase out a special arrangement that had previously allowed Israel to use 26.3% of the U.S. aid on its own defense industry instead of on American-made weapons. All the aid will now have to be spent on U.S. equipment by 2026.
Israeli lawmakers suggested that this requirement could be renegotiated now that Obama has been succeeded by Trump, who has broken with other past U.S. policies by moving the U.S. Embassy to Jerusalem last week.
"The U.S. administration today is different from the previous one and it is possible to do something on a policy level to change the decision in some way," opposition MK Mickey Levy (Yesh Atid) said.
In a meeting of Knesset's Finance Committee, the chairman of the panel, United Torah Judaism MK Moshe Gafni, called on the cabinet to tell the U.S. administration that the current agreement will cause the Israeli defense sector "unacceptable harm."
According to Defense Ministry economist Ze'ev Zilber, in addition to the $800 million annually that would be directly diverted from Israeli to U.S. defense firms, the industry would lose another $1.3 billion each year from the knock-on effects of the change. That could threaten 22,000 jobs.
The Economy Ministry said the deal could impact as many as 700 small suppliers.
Zionist Union MK Eyal Ben-Reuven expressed concern that Israel could lose its ability to act independently in times of emergency, such as if its Iron Dome missile defense system is needed during wartime.
"The most disturbing thing is that the government has no solutions," he said.
The Prime Minister's Office was not immediately available for comment.
