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US-Israel military aid deal: the last word on the Obama-Netanyahu relationship?

Israeli Prime Minister Benjamin Netanyahu is set to travel to New York next week to address the annual meeting of the United Nations General Assembly. The Prime Minister’s presence in the United States has renewed speculation that the new US-Israel Memorandum of Understanding (MOU) on security cooperation will finally be signed. According to Daniel Shapiro, U.S ambassador to Israel, the deal constitutes “the US’s biggest aid package to any other country in history.”

With the current MOU set to expire in 2017, negotiations have been underway for some time for a new ten-year military aid deal.  While the Obama administration remains committed to maintaining Israel’s qualitative military edge (QME), the administration’s insistence on gradually phasing out the off-shore procurement policy – which currently allows the Israeli government to allocate  26.3 per cent of its annual military funding from the US towards defence procurement from Israeli – rather than American – defence companies had been one of several points that held up negotiations.

Moreover, while the final details of the new MOU were reportedly concluded last month, new reports surfaced indicating that the deal was now being held up by Senator Lindsey Graham (R.-S.C.), who chairs the Senate appropriations subcommittee responsible for the foreign affairs budget. In an interview with Haaretz last July, Graham stated that Congress would not be obligated by any agreement the administration signed with Israel, and that there was bipartisan support, including support from Democratic vice-presidential candidate Tim Kaine – for allocating aid to Israel in the 2017 that exceeded what the administration had proposed. The new MOU reportedly incorporates funding for Israeli missile defence spending into the annual military aid commitment rather than as being allocated by Congress on a supplemental basis. This provision, together with reports that the new MOU would preclude the Israeli government from requesting additional funding from Congress during the next ten years has troubled some in Congress as the negotiations were underway.

At present, the White House wants to ensure Congress will not circumvent the soon-to-be-announced MOU. Yet with only a few months left in the Obama administration, the White House may have to choose between forging ahead with the deal or delaying an announcement and slugging it out with Congress.

As news broke of Graham’s delay, Israel’s Channel 2 News reported that, in the hopes of averting a political crisis in Washington, Israel backed up the White House and negotiators accepted a deal in the early hours of September 13. The deal that Israel has reportedly accepted allocates $38bn USD in military assistance to Israel over the next ten years, with Israel agreeing that it will not seek additional funds from Congress for the duration of the MOU.

Though at one point during the negotiations Netanyahu stated he may wait until after the new U.S. administration is inaugurated to conclude the agreement, developments in U.S. domestic politics may have led the prime minister to decide to complete the negotiations now, before Obama leaves office. Thus far in the election cycle, Republican presidential candidate Donald Trump has sent mixed messages regarding how a Trump administration will handle the Israeli-Palestinian conflict. While he has publicly affirmed the importance of the US-Israel relationship, Trump has also demonstrated isolationist tendencies and emphasised that US allies would have to pay their fair share in exchange for American support. Moreover, Democratic presidential candidate Hillary Clinton is unlikely to offer more than her predecessor. Signing the deal while Obama is still in office will also help the prime minister mollify those domestic critics who have repeatedly accused him of having mismanaged the US-Israel relationship. At the same time, some analysts continue to argue that Israel could have achieved a better MOU immediately after the Iranian nuclear deal was signed had the Netanyahu government not continued its battle with the Obama Administration.

For Obama, concluding the deal now allows him to capitalise on a legacy of strong support for Israel’s security. Announcing a new landmark military aid package – the biggest yet for Israel – would also blunt some of Donald Trump and the Republican Party’s talking points  regarding the administration’s handling of the U.S.-Israel relationship, and give the Democrats a positive development in the U.S.-Israel relationship – an issue of importance to many voters – to campaign on.

For the past eight years, the relationship between the two leaders, as frequently reported, has been rocky. For both Netanyahu and Obama, signing the deal now signals a strong message – both to their respective domestic constituencies and to the international community – that the US-Israel relationship transcends politics and personal animus. Whether the deal will be the last word on the Obama-Netanyahu relationship, or whether after the November elections the Obama administration will announce a set of parameters for future negotiations between Israelis and Palestinians or take new and unprecedented steps in the Security Council remains an open question. In any event, it seems Netanyahu has concluded that working with the administration to finalise the deal now may help to ameliorate some of the uncertainty that remains.

Watch this space to read BICOM’s forthcoming strategic assessment on the new US-Israel MOU.

Lauren Mellinger is BICOM’s Research Fellow