U.S. Rejects Israel’s Request to Renew Diamond-buying Agreement

The United States has rejected Israel’s request to renew a five-year agreement that allows Israel to buy industrial diamonds from the American strategic stockpile at a negotiated price, Stockpile items are normally said’ by competitive bidding.

Israel wanted the agreement, which expired over the weekend, to continue because it provides a guaranteed source of supply for its diamond cutting and polishing industry, which employs 20,000 persons and provides 40 percent of Israel’s export earnings. Last year, Israel sold $1.5 billion of gems made from the industrial diamonds a 50 percent increase over the 1978 level.

The U.S. decision was announced by Richard Cooper, Undersecretary of State for Economic Affairs, who called the 1975 agreement made by then Secretary of State Henry Kissinger and Treasury Secretary William Simon “anachronistic” in view of a new Congressionally mandated legal framework for stockpile disposal. He also cited domestic criticism of a $9 million diamond sale to Israel in 1976 in which some people accused Israel of taking unfair advantage of its rights. Israel, in rejecting the charge, said it was the clear intention of Congress to give Israel special access to the stockpile.

A TILT AGAINST ISRAEL

The refusal to renew the accord came despite a last-minute plea to President Carter by five members of the Senate Foreign Relations Committee-Frank Church (D. Idaho), the committee chairman; Jacob Javits (R. NY), the ranking Republican; Joseph Biden Jr. (D. Del.). Paul Sarbanes (D.Mo.) and Richard Stone (D. Fla.). Cooper said Israel would have a fair chance to bid on the diamonds and would have “nondiscriminatory access.”

Bart Fisher, a Washington lawyer, representing the U.S. commercial agent for the Israeli State owned diamond company, said that “if this decision is not anti-Israel, it is at least anti-Begin. ” He charged “it represents another tilt against “Israel.”