Trade Agreement Israel Palestine

The EU and Palestine meet regularly in committees to discuss issues and best practices in implementing the agreement. The agreement contains 11 separate articles on trade, including but not limited to articles on labour, agriculture, tourism, industrial food, insurance and taxes. The import and export of products to and from the Palestinian market and foreign markets is done through Israeli ports where, in addition to Israeli control over Palestinian internal trade, Israel has full control over trade movements. Another advantage of the Paris Protocol is the possibility for the Palestinian Authority to sign free trade agreements and diversification of Palestinian trade. Reviving trade between Israel and the Palestinian Authority requires the lifting or easing of restrictions on the Palestinian economy. Priority measures include improving dual use and access to land, developing water and energy infrastructure, and modernizing Annex V of the 1995 Interim Agreement (also known as the Paris Protocol), which governs economic and trade relations between Israel and the Palestinian Authority, to meet the current needs of the Palestinian economy. In addition, the projects should aim to facilitate the growth of Palestinian exports to and through Israel, as well as in Arab and other markets; there should be more cooperation in areas such as tourism and information technology. The Palestinian Authority`s actions have partly undermined increased efforts to end what it sees as over-dependency on Israeli markets. The Office of the Prime Minister of the Palestinian Authority said in a statement that Israel would allow the Palestinian Authority to begin “directly importing cattle, including calves, from all countries of the world unimpeded” under the agreement. Although Israel is practically an exclusive market for Palestinian exports, the huge size of the Israeli market relative to the Palestinian economy is reflected in the Relatively Small Share of the Palestinian Authority in Israeli Imports. Even at the peak of Israeli-Palestinian trade in the early 1980s, the Palestinian share was no more than 3% (see Figure 11).15The difference between Israeli and Palestinian statistics mainly reflects unregant trade, which is more reflected in Palestinian balance-of-payments statistics. A final step in the trade dispute was reached on 8 February, when the Israeli Ministry of Defence banned all Palestinian exports through Jordan, apparently in an effort to urge the Palestinian Authority to lift its ban on Israeli calves.

In order to contribute to the economic integration of Arab countries through the liberalization of trade in goods and services, Arab countries are negotiating among themselves the liberalization of services and investment. This free trade area is only the first step towards a customs union by 2015 on the path to a common market by 2020. It should be noted that this agreement is in line with Article XXIV of the General Agreement on Tariffs and Trade (GATT 1994) and the decision on more favourable differentiation and treatment, reciprocity and wider participation of developing countries (1979). Israel`s share of imports of Palestinian products has steadily declined in recent years (see Chart 8). This trend is the end result of two processes that have taken place since the Second Intifada. The first is a decrease in Palestinian purchasing power compared to previous periods, due to a decline in palestinian household income. This has resulted in a reduction in per capita consumption of non-essential finished products imported mainly from Israel. The second process is the drastic reduction in purchases of production facilities, equipment and semi-products (also imported mainly from Israel) by the Palestinian industry and agricultural sectors. This trend is due to the decline of the Palestinian agricultural sector and the stagnation of the industrial sector.