This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 002413 
 
SIPDIS 
 
DEPARTMENT PLEASE PASS TO USTR: ESAUMS AND SDONNELLY 
 
E.O. 12958: DECL: 06/20/2016 
TAGS: ECON ETRD PREL PGOV KIPR IS KINR GTIP ECONOMY AND FINANCE ISRAEL RELATIONS
SUBJECT: AMBASSADOR'S MEETING WITH SHAS CHAIRMAN AND TRADE 
MINISTER YISHAI 
 
 
Classified By: Ambassador Richard H. Jones for reasons 1.4 (b) and (d) 
 
¶1. (C) Summary and Comment: In a June 19 meeting with the 
Ambassador, Minister of Industry, Trade, and Labor and Shas 
Party Chairman Eliyahu Yishai outlined his priorities as a 
minister as well as Shas's position on PM Olmert's 
realignment plan.  The Ambassador enumerated USG concerns 
regarding pending trafficking in persons (TIP) legislation, 
trade barriers created by Israel's adoption of non-U.S. 
standards, and problems created by Israel's failure to 
sufficiently protect intellectual property.  Yishai listened 
carefully throughout the meeting, but did not appear fully 
briefed on bilateral trade problems between Israel and the 
U.S.  He deferred to his Foreign Trade Administration staff 
several times during the meeting.  Yishai has already 
imprinted his own personal style on the office and brought 
with him to the ministry a more conservative personal office 
staff.  End summary and comment. 
 
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Yishai's Priorities 
------------------ 
 
¶2. (C) Yishai said that one of his first priorities as 
minister of Industry, Trade, and Labor (MOITAL) is to 
re-focus attention on the labor part of the portfolio.  He 
added that as part of this effort he would also allocate 
ministry resources to encourage innovation in small and 
medium-sized enterprises.  Yishai said he wants to focus 
resources from the ministry's Investment Promotion Center on 
encouraging investment in development and peripheral areas of 
the country.  Yishai was accompanied by Director of the 
Foreign Trade Administration Boaz Hirsch and his assistant, 
Roee Madai, as well as Director of Multilateral Agreements 
Yair Shiran, who also acted as the interpreter. 
 
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Foreign Workers 
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¶3. (C) The Ambassador noted that the U.S. is concerned that 
Israeli law does not criminalize trafficking in persons (TIP) 
for labor exploitation.  (Note: Israeli law provides 
sanctions against TIP for sexual exploitation. End note.) 
The Ambassador encouraged Yishai to support pending 
legislation that would criminalize trafficking for labor 
exploitation, emphasizing that the legislation would have the 
added benefit of ensuring that the minimum wage in Israel is 
not undercut by trafficked foreign workers.  The legislation 
could actually help reinforce Yishai's goal of employing more 
Israelis, the Ambassador said as the demand for foreign labor 
is often driven by an employer's desire to artificially 
suppress wage costs.  Yishai agreed that the issue of 
protection for foreign workers is very important, and said 
that in 1996 -- while minister of Labor -- he had sponsored 
the first legislation that improved the conditions for 
foreign laborers.  Yishai described the trafficking of 
laborers and women as against Jewish ethics and also against 
human rights. 
 
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Standards and IPR 
----------------- 
 
¶4. (C) The Ambassador explained the problem that Israel's 
non-acceptance of U.S. standards creates for U.S. exporters, 
and encouraged Yishai to utilize existing Israeli law to help 
remedy the problem.  (Note: Existing Israeli law allows for 
the adoption multiple international standards for a product, 
if it is in the best interest of the consumer.  When Israel 
adopts a non-U.S. standard, ministry officials have chosen to 
allow market access for U.S. companies through a complicated 
waiver system, rather than by simply adopting a second 
standard. End note)  Yishai appeared unfamiliar with the 
issue, and replied only after reading a hand-written note 
from Hirsch.  Yishai responded that Israel is an open economy 
that is seeking to reduce government interference, but that 
he would encourage the "technical level officials" to get 
together on this matter, and that he would be happy to follow 
up on the issue in future meetings. 
 
¶5. (C) The Ambassador then described for Yishai the two main 
concerns of the U.S. regarding intellectual property rights 
(IPR): the protection for pharmaceutical patents and the 
pending copyright legislation.  The Ambassador detailed how 
lack of proper protection for pharmaceutical companies' IPR 
discourages investment in one of Israel's key medical sectors 
-- biotechnology.  He also explained how the draft copyright 
legislation is Israel's chance to upgrade outdated copyright 
legislation for the digital age, and cited the growing 
importance of copyrights for the computer industry.  Finally, 
the Ambassador noted that the U.S. is looking to re-engage 
Israel in discussions about IPR protection.  After consulting 
with his advisors from the Foreign Trade Administration, 
Yishai replied that Israel believes that it complies with all 
international commitments, but that he is willing to continue 
dialogue on this issue. 
 
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Convergence 
----------- 
 
¶6. (C) The Ambassador noted that during coalition 
negotiations there was intense speculation in the press on 
Shas's position on "hitkansut" (the Prime Minister's 
realignment plan).  Yishai replied by saying that his working 
relationship with Prime Minister Olmert is more than 20 years 
old, originating when Shas was first established and before 
Olmert became mayor of Jerusalem.  Yishai said that Shas is 
bound by the ruling of Rabbi Ovodia Yosef, who has approved 
the return of territories for peace.  Yishai noted that Rabbi 
Yosef's decision is "firm."  He concluded by saying that the 
Prime Minister is seeking a return to negotiations and that 
he "hopes it would be successful."  Yishai indicated that he 
would be willing to further discuss the position of Shas on 
this issue once the alternatives are more clearly defined. 
 
 
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The office 
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¶7. (C) Comment and Bio note: Many of the front office staff 
of the Minister of Industry, Trade and Labor have changed 
since Yishai took over as Minister.  The staff, at least in 
terms of dress, appeared more religiously conservative than 
Olmert's staff and are likely Shas party loyalists.  Inside 
the Minister's private office, the smoke filtration system 
installed during Olmert's tenure, so that he could indulge in 
a mid-day cigar, has been removed.  Yishai wasted no time in 
adding his own personal touches to the office, including a 
sofa-sized framed photo of Rabbi Ovodia Yosef (the Shas 
spiritual leader) and numerous photos of other prominent 
rabbis.  Yishai speaks almost no English and looked towards 
bilingual ministry staff to translate to and from Hebrew for 
him.  His staff report that he is fluent enough in Arabic 
that he understood the recent phone call from Egyptian Trade 
Minister Rashid without the need for translation, but that 
his spoken Arabic is a Tunisian dialect. 
 
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