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...

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