PA, Israel Agree on a Free Trade Area
Israel and the Palestinian Authority have agreed to establish a Free Trade Area (FTA) as part of a final economic accord, reported Haaretz newspaper, quoting Chief Israeli negotiator, who added that an "effective economic border" first needs to be established.
Eran explained that an interim period will be required to enable the two sides to prepare the administrative infrastructure and work out the details for the new economic border arrangement, the paper added.
He told the paper that the final economic accord will provide for the free, although monitored, movement of workers between the Palestinian and Israeli economies.
According to the paper, the FTA concept is based on economic separation, with each side enjoying economic independence. After signing an agreement on general principles, the two sides will work out the details of the FTA, including the customs duties on imported goods that pass through the Palestinian-Israeli border.
Local products (Palestinian or Israeli, according to agreed rules of origin) will be exempt from customs tax under the free trade arrangement, Eran told Haaretz.
Until the FTA is implemented, the current economic agreement (the "Paris accord") will remain in effect, although Eran suggested that some modifications to the Paris accord could be made during the transition period. The Paris accord, which Eran also helped to negotiate, requires the Palestinians to adjust their customs rates to those of Israel, with some exceptions, according to Haaretz.
"The current economic basis is unacceptable to both sides and it will be replaced by another accord, with a transition period to last until an effective economic border can be established," Eran emphasized. The transition period will also enable the sides to work out the final details of the FTA, he added - Albawaba.com
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