Cooperation with Israeli diamond and jewelry manufacturers could strengthen businesses as partners pool their comparative advantages, says Dan Catarivas, trade commissioner of the Consulate General of Israel in Hong Kong.

            “There are a lot of avenues for cooperation and joint ventures, the bringing together of comparative advantages and the penetration of other markets,” Catarivas said.

            Israel benefits from a free trade agreement with the United States and Europe. A gold chain manufactured in Thailand, then exported to Israel where it is encrusted with diamonds and whose added value is over 30- to 35- percent, enters the United States or Europe duty-free.

            Apart from the customs advantage, Israel also offers innovative designs and technology. “Israel is non-restrictive when it comes to technology transfer,” Catarivas said. “It is very difficult today to control the flow of information. So why not take advantage of being pioneers?

            “We are bound to the rest of the world. The Israelis understand the benefit of pluralism. It’s also bare necessity,” he said.

            In Israel, Catarivas noted, there is insufficient infrastructure to support the huge reservoir of research and development. The internal market is small and applications must go beyond Israel. “And we don’t want to develop to economy with cheap labor, nor do we want to develop the export markets with cheap labor,” he said.

            The influx of Soviet Jews and those from Eastern Europe also can help contribute to the jewelry industry, Catarivas said. “These immigrants understand the language and the taste of a potential market. There is no reason why the jewelry industry cannot benefit from them.” In 1989, Israel exported 237 million U.S. dollars o finished jewelry to the United States, Europe and the Far East. No more than 10 percent of Israel’s total jewelry exports went to the Far East.

            Hong Kong is Israel’s third largest market, after the United States and Japan. Last year, the British colony imported Israeli-cut diamonds worth 450 million U.S. Dollars. Hong Kong serves as a distribution center for Asia and is considered the fastest growing destination for Israel’s diamonds. But with the Chinese takeover in 1997, Thailand “can definitely be the place to be as more and more Israelis are looking at diamond production and the purchasing power of Thailand,” Catarivas said.

            “If Hong Kong loses its advantages, then Thailand could fill its place,” he said.