ISRAEL CONFIDENT OF 2010 OECD ACCESSION BUT TAKING

UNCLAS TEL AVIV 001521

SENSITIVE
SIPDIS

PARIS FOR USOECD, STATE FOR EEB/EPPD AND NEA/IPA/KFRELICH

E.O. 12958: N/A
TAGS: ECON IS
SUBJECT: ISRAEL CONFIDENT OF 2010 OECD ACCESSION BUT TAKING
NO CHANCES


1. (SBU) In separate meetings with Foreign Affairs, Finance
and Environment officials, GOI interlocutors expressed
confidence that ISRAEL is well on track for accession to the
Organization for Economic Cooperation and Development (OECD)
by April 2010. MFA Deputy Director General for Economic
Affairs Irit Ben Abba told EconCouns on July 2 that she was
very pleased by the Israeli delegation's meetings on the
margins of the OECD Ministerial. While the GOI remains
concerned that political 'like-mindedness' criteria could be
raised in Council discussion of Israel's accession, Ben Abba
said her government has exercised due diligence, particularly
with Norway, to ensure that any questions OECD member states
might have about such issues are answered.


2. (SBU) Ben Abba noted Israel's progress on meeting OECD
environmental policy requirements, progress that was
confirmed in a July 7 meeting with Ministry of Environment
Director General Yossi Inbar. Inbar said that Israel's
obligations with respect to OECD policy instruments had
advanced rapidly. ISRAEL was now signatory to the Basel
Convention on Solid Waste, had passed OECD-compliant Clean
Air legislation, and had received a good report from the
Chemicals Committee. He said the Ministry hopes to have the
full compliance timetable completed by end-July. Inbar said
his greatest challenge was getting the resources needed to
meet all of the environmental obligations ISRAEL has taken on
under the accession process. He said staffing was his
biggest constraint; GOI employment rules required competitive
tendering for every position, even for technical specialties
for which ISRAEL might have only a handful of qualified
individuals. Inbar said the OECD accession process had given
the Ministry greater leverage in the battle for financial
resources, but pointed to proliferation of unfunded mandates
(he cited the Clean Air bill) as an ongoing problem. Despite
these problems, Inbar said environmental issues would not bar
Israel from OECD accession by April 2010.


3. (SBU) Irit Ben Abba agreed that the environmental 'acquis'
were no longer a significant impediment to Israel's OECD
accession, but worried that the Education, Labor and Social
Affairs (ELSA) committee might give ISRAEL low marks for its
handling of persistent unemployment among minority groups.
She pointed to high unemployment rates among Arab-Israeli
women and ultra-orthodox Jewish men as a serious problem that
had not responded to any of the policy remedies tried thus
far by the GOI. Finance Ministry Senior Deputy DG Oded Bruk
agreed that culturally based structural unemployment was a
significant issue for Israel, adding that Social Affairs
Minister Herzog and Labor Minister Ben Eliezer would be
meeting with OECD officials in October for an in-depth
discussion of labor and social affairs policies, including
the unemployment issue. Neither Bruk nor Ben Abba thought
minority unemployment would be an obstacle to Israel's OECD
accession, but both said they felt the GOI needed to show
that it was dealing with the problem and that ELSA's best
practices discussions on minority unemployment were aiding
GOI efforts.


4. (SBU) Econcouns forewarned both Ben Abba and Bruk that the
U.S. would be raising intellectual property protection,
discriminatory taxation of imported alcoholic spirits, and
incoherence of Israel's food/pharmaceutical import safety
regime in the Trade Committee's review of Israel's accession.
Both agreed that it would be appropriate and helpful to have
the Trade Committee encourage reform in all three areas and
noted that the EU would probably support the U.S. in this
effort.


5. (SBU) Bruk and Ben Abba said they were pleased ISRAEL had
joined the OECD Anti-Bribery Convention in March. Ben Abba
said ISRAEL was now fully engaged in phase II of the
anti-bribery acquis process, which she characterized as "very
intrusive." However, citing a recent poll showing that more
than 60 percent of Israelis perceived corruption as a serious
issue, she said there is strong political support for moving
forward rapidly on phase II implementation. Finally, Ben
Abba confirmed that ISRAEL would be ready to sign the
Privileges and Immunities agreement by the end of this year
and is working on staffing an OECD mission to operate out of
Israeli Embassy facilities in Paris.


6. (SBU) Comment: ISRAEL has clearly made substantial
progress in addressing the requirements of the OECD
instruments and related agreements, though there is still a
lot of work to be done between now and April 2010. MFA has
devoted significant attention to Norway and other countries
that might raise political concerns with Israel's OECD
accession, and seems to have gotten assurances from the
Norwegians that they would not block consensus.


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