MARKETS : Partners in Trade: California and Israel : The growing relationship could mean more jobs and a boost for the state's economic recovery.


For Howard P. Marguleas, chairman of Sun World International, the giant fruit and vegetable grower based in Bakersfield, the thought is beguiling--mangoes raised in the California desert capturing the American market from mangoes imported from the tropics.

"A desert mango should be no more impossible than the winter strawberries we grow now," he said. "The market is there, no question about that, it should be a highly profitable product and it will create a lot of jobs in California. We just have to get the research done right and fast."

Doing that research are plant scientists based at Israel's Volcani Agricultural Research Institute, southeast of Tel Aviv; their work was commissioned by Marguleas in the complex, rapidly evolving trade relationship between California and Israel.

"We are used to thinking of international trade as 'You buy this, we buy that' when it has gone far, far beyond these old patterns," Julie Wright, California's secretary of trade and commerce, said this week at the end of a five-day trade mission to Israel. "California-Israeli trade is much more than export-import. . . .

"Israel," she said, "now develops products that we in California manufacture and sell. California companies are considering Israel as a manufacturing base for the European Community. Israeli firms are interested in investing in California, and Israeli and California companies are looking at a substantial number of export-oriented joint ventures and licensing ventures. For California, Israel can provide a competitive edge in the U.S. market and in the world market."

The state and the nation now have a burgeoning relationship. California's direct trade with Israel now amounts to about $500 million a year, and accounts for an estimated 10,000 jobs in California, state officials say.

Marguleas, searching to increase Sun World's market share, commissioned Israeli researchers to develop tomatoes with a long shelf life, giant red sweet peppers and winter strawberries before signing the desert mango contract with Volcani. All were winners, he said.

"It's a race to the market, and getting there first means a lot," said Marguleas, whose company does $300 million annually in sales. "Doing the research in Israel cuts the development time in half, and it costs about a quarter of what it would in the U.S. There are far fewer governmental regulations, and the Israelis run leaner operations.

"We develop the varieties and bring the seeds back to California," he noted. Similarly, Intel Corp. has a design center in Israel for advanced microchips that it makes in the United States.

"Israel's ability to do a lot of things faster and cheaper is a wake-up call for California and its research industry," Wright commented. "Meanwhile, global competition is such that we should cooperate because we can get there faster together. . . . Competition is less important than being there at the right place at the right time."

The trade mission, the first organized by the new Cabinet-level California Trade and Commerce Agency, brought more than 125 California business, agriculture, research and government leaders to Israel this week in what Wright described as an effort to promote exports in California's economic recovery.

The group also took part in Agritech, the triennial Israeli agricultural technology exhibition, which draws visitors from around the world.

"Since mid-1990, we have been adding 50,000 jobs a year through international trade," Wright said. "Although that's a fraction of the 1 million jobs we lost, it is an area of real growth at a time when we desperately need growth."

Wright said the group sees potential for significant collaboration in agriculture and agro-technology, biotechnology, medicine, alternative energy, environmental protection and electronics. A similar Israeli group is likely to come to California later this year.

"Our economies have many similarities, particularly in the importance of high-tech industries and agriculture, but this makes us better partners than competitors," Wright said.

"What we can learn from Israelis is to think exports," Wright observed. "Because of the size of the California economy, our companies often don't even look outside the state, but Israeli companies, because of the size of this economy, look for export markets from the moment of conception."

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