Trade: Should an Israeli Buy a Volkswagen?

Two numbers tell much about the life and times of Chaim Serna, 43, a power-company foreman in Jerusalem. One of them, 108342, is tattooed on his left forearm, a souvenir of Auschwitz. The other is 612214 on the license of his blue Volkswagen. "If trading with Germany is good for Israel, and I think it is, then I am for it," he says. His countrymen, despite considerable resentment stemming from Nazi days, seem to agree. Trade between Germany and the new state of Israel is booming.

West Germany is Israel's third best trading partner, after the U.S. and Britain. Imports from West Germany nearly doubled last year, to $115 million. The bulk consisted of machinery and steel, including supplies for the trans-Negev oil pipeline built to bypass the Suez canal. Consumer goods, notably more than $10 million worth of autos, took up a good share of the total. Though many Israelis still flatly refuse even to ride in a Volkswagen—and more than just a few North American Jews will not consider buying VWs—German autos outsold those of all other nations in Israel last year. Volkswagen led the list, with sales of more than 1,500, and the VW dealer in Jerusalem, Abraham Tawfiq, expects to triple his sales this year.

The fruits of commercial fraternization are also growing fast on German ground. In 1968, West Germans bought $56 million worth of Jaffa oranges, polished diamonds, flowers, tires and other goods. Their purchases amounted to 10% of Israel's total exports. Last month thousands of Stuttgart residents strolled the city's main streets, peering into shop windows that displayed jewelry, clothes and other products during an "Israeli Week." Trade between the two nations is certain to go up much farther, according to officials of both. Partly because of a 40% tariff cut on citrus, just granted by the Common Market, Germany could possibly overtake Britain as Israel's second best customer in a few years.

Ironically, the trade links between the two countries were created by what the Israelis call "blood money." Their industry was set up largely with the help of $900 million in reparations, which Bonn paid from 1953 to 1965, stipulating that most of the funds had to be spent in West Germany. Once the payments ended, trade replaced aid. Much of the German machinery acquired in the 1950s now needs replacement, and orders are flowing into Germany. Bonn has also buttressed the buy-German trend by providing $115 million in development loans since 1966.

New Vacationland. Bonn's staunch support of Israel in the Six-Day War of 1967 helped transform public attitudes and stimulate the sale of German consumer goods. "We are a pragmatic people," explains a senior Israeli trade official. "We cannot spit in their faces forever." The breakthrough can be traced to several years before the Middle East war, when it was revealed that Germany had been secretly supplying Israel with millions of dollars worth of arms. With much embarrassment, Bonn stopped these shipments rather than face political reprisals by Arab nations, particularly their implied threats to recognize East Germany. But evidence of West German willingness to help Israel paid off.*