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Israel: Agreement Reached on U.S. Co-Production A commercial agreement was reached last week to produce major components of Israel’s Arrow missile interceptor in the United States, but government approval is still required before work begins. Israel Aircraft Industries and Boeing concluded the agreement under which Boeing will manufacture about half of the Arrow components and IAI will complete the final assembly of the components in Israel. Israel has sought a U.S. production line for years, but the deal was complicated by Boeing’s concerns that its assistance could violate Missile Technology Control Regimes guidelines that restrict the types of missile systems U.S. firms may export. Israel originally wanted to produce complete Arrow systems in the United States, but those would be classified as “Category 1” systems under the MTCR and therefore face stricter export controls, according to Aerospace Daily. Boeing would face looser export restrictions by only producing Arrow components that would be considered “Category 2” MTCR systems. Before production can begin, however, the U.S. State Department must approve a Technical Assistance Agreement, which Boeing submitted on Jan. 17, according to IAI. “This cannot come to closure until both governments have given the appropriate approval,” said a Boeing representative who cautioned that that are no guarantees that the State Department will approve the deal (Sharon Weinberger, Aerospace Daily, Jan. 25). Last year, the U.S. Congress appropriated about $130 million in fiscal 2002 defense appropriations to fund Arrow activities, including $30 million for to create the U.S. production line (TheStreet.com, Jan.21). Israeli Defense Minister Binyamin Ben-Eliezer is expected to promote the deal soon in Washington, according to a senior Israeli defense official. “We want more of the missiles — not launchers, but missiles. Production [in Israel] is at full capacity and we need a decision on the matter, because it takes years,” said the official (O’Sullivan/Keinon, Jerusalem Post, Feb. 1).
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