The United States and Israel are close to clinching a massive 10-year arms deal, but Washington is pushing to scrap a coveted provision that has allowed Israel to pump hundreds of millions of dollars directly into its defense industry.
If successful, the administration’s push to remove the clause would inflict some real pain on Israel’s growing security sector, which already exports more arms overseas than almost any other country apart from the United States. On the flip side, the change would mean a potential windfall for American defense contractors scrambling to sell their wares abroad to make up for declining sales at home. The Middle East and Asia are now driving growth for major U.S. contractors, with about a quarter of revenue coming from international sales, compared with 15 percent in 2008.
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