Israel signs ‘reciprocal’ defense spending agreement with Boeing

Israel and Boeing have signed a ‘reciprocal’ spending deal which will bring billions of dollars from the corporation to the Jewish state for any major defense contracts it signs.

The deal was announced Tuesday by Israel’s Interior Ministry and calls for Boeing to contribute at least 35 percent of the value of any transaction Israeli industries signs with the government, Reuters reported.

Boeing is reportedly competing for a number of key defense ministry contracts in Israel, including purchases of additional F-15 aircrafts, fueling planes, and transport helicopters, the Interior Ministry said.

Israel is expected to purchase $10 billion worth of military purchases from Boeing in the next decade, so the new agreement means Boeing will now invest $3.5 billion in new business in Israel.

“A reciprocal procurement agreement of this magnitude is a significant achievement that will lead to the growth of many companies in the economy, increase their activity and also their success in international markets,” Economy Minister Eli Cohen said.

In 2016, a monumental defense deal signed by President Barack Obama and Benjamin Netanyahu saw the US agreeing to provide Israel with $38 billion in military badistance over the course of 10 years.

One aspect of the deal involved phasing out an existing arrangement that allowed Israel to use 26.3% of the US aid on its own industries rather than American-made weapons. As a result, all of the U.S. aid will have to be spent on U.S. equipment by 2026.