The Camp David summit will yield progress toward forming a new economic reality with the Palestinian Authority, according to The Jerusalem Post.
The Israeli daily said that a free-trade area (FTA) is the likely settlement due the Palestinian's desire for greater economic freedom and Israel's willingness to comply.
"We want to determine our own economic policy," Saad Khatib, director of the Israel desk at the PA's Ministry of Economy and Trade, told The Jerusalem Post Tuesday. "We want to become a member of the WTO [World Trade Organization], to open our markets and make them attractive."
The Geneva-based WTO governs the rules of trade between its 137 member nations. The organization handles trade disputes, provides a forum for negotiations, and monitors national trade policies. The rigorous application process includes a commitment to grant special trading rights to other WTO countries and a description of the candidate's trade and economic policies. The PA is currently working closely with the International Monetary Fund to develop a medium-term economic policy framework, said the report.
Israeli Finance Ministry Director-General Avi Ben-Bassat, before leaving to join the negotiations on Monday, echoed the well-documented position that Israel will comply with the Palestinians request for more economic liberties, said the paper.
According to the daily, an FTA would be a departure from the current norms, which are based on the 1994 Protocol on Economic Relations (commonly known as the Paris Protocol), which was attached as an appendix to the Interim Agreement. The result was a customs envelope - a limited form of a customs union. The Paris Protocol also created a free-trade area between Israel and the Palestinian autonomous areas. However, unlike a customs union, which specifies a common tariff toward all non-member countries, the Paris Protocol allows the PA to determine its own tariffs for certain goods originating from designated countries.
The Palestinian protest against the current system stems from the dominant role that Israel plays in the PA's trade policies. Under the current arrangements, the Palestinians inherit all economic ties that Israel has with other countries. At a recent conference for the Israel/Palestine Center for Research and Information (IPCRI), Gabi Bar, deputy director-general of Israel’s Ministry of Industry and Trade, noted that the Palestinians inherited free-trade arrangements with the US and Europe.
"The PA now has an economic agreement with some of the largest blocks in the world," he said. "If you look at the neighboring Arab countries, none of them have it."
The arrangement, however, prohibits ties with countries that have no formal economic relations with Israel. "We want to have free trade with Arab areas that do not have economic ties with Israel, like Saudi Arabia and Kuwait," Khatib said.
The PA has also voiced a strong opposition to the policies of the Israel Standards Institute, said the paper, adding that the PA has complained that the institute, which may approve or reject the import of goods based on safety or health regulations, acts to limit the products available to Palestinians.
As for what to expect from the Camp David talks, Gershon Baskin of IPCRI, was quoted as saying "they'll come to a general agreement, probably an FTA, and an agreement on the flow of labor into Israel and on the number of customs stations."
But he noted that an economic framework will not be finalized until after a political agreement is reached.
Khatib concurred. "Any economic agreement," he said, "needs to be between the State of Israel and the state of Palestine. Until we have this established, it is futile to discuss economic relations." – Albawaba.com
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