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Source: United Nations Conference on Trade and Development (UNCTAD)
17 August 2015



Economic and trade conditions in the occupied Palestinian territory would improve if Israel fulfils its obligations under a new WTO agreement on trade facilitation

‚ÄčPalestinian trade stands to gain if Israel fulfils its legal obligations under the World Trade Organization (WTO) Agreement on Trade Facilitation and ensures it is applied throughout the occupied Palestinian territory (OPT), according to UNCTAD's new study, "The 2013 World Trade Organization Agreement on Trade Facilitation: Israel's obligations towards Palestinian trade".
Under prolonged occupation, the Palestinian territory has no control over most aspects of its trade. It is subject to discriminatory treatment such as disabling permit requirements and import bans on products under a restrictive Israeli dual-use system. But the resulting severe poverty, food insecurity and high unemployment rates in the OPT, particularly in Gaza where joblessness reached an unprecedented 44 per cent in 2014, could be decreased significantly under the terms of the WTO Agreement, the study suggests.

The Agreement, adopted in Bali, Indonesia in 2013, aims to cut red tape to boost the flow of goods across borders and the collection of import duties for all WTO members and the areas they control. Huge savings in the cost of international trade will be realized with the Agreement's entry into force when 108 of 161 members (two-thirds) of WTO members ratify it. The Agreement should benefit shipments to and from landlocked countries, non-sovereign territories and those under foreign military occupation such as the OPT.

On the one hand, the UNCTAD study illustrates the problematic status quo of Palestinian trade, its chronic crisis conditions, the restrictive Israeli control of Palestinian trade in violation of international law, and the implications of these issues for achieving sustainable economic development in the OPT. On the other, the study details the potential benefits that would accrue to the OPT if Israel, in its capacity as a WTO member state, extends the provisions of the Agreement on Trade Facilitation to cover Palestinian trade.

At the core of the UNCTAD study is a legal evaluation and policy analysis of trade facilitation under conditions of occupation. While international standards of trade facilitation are at present applicable to Israeli external trade, they are not fully applied to Palestinian exports and imports because of occupation-related restrictions. The application of the WTO Agreement would help create efficient and transparent customs procedures, reduce document requirements and processing time ahead of shipping, and strengthen customs and revenue collection by the Palestinian National Authority (PNA), the study suggests.

Several case studies that shed new light on chronic bottlenecks and obstacles to Palestinian trade facilitation are presented in the study, showing how restricting the import of certain products has undermined Palestinian productive sectors like manufacturing, pharmaceuticals production, agriculture and information and communication technology.

For example, the study shows that the Israeli government has adopted a document, Red lines: food consumption in Gaza, which included lists of hundreds of items that may not be imported into Gaza even if they are necessary to the daily lives of Palestinians and do not constitute a security threat. These lists include basic ingredients such as industrial salt, tea, sugar, rice, wheat, sesame and oils.

Other items that may not be imported to Gaza include pharmaceuticals, medical equipment, cleaning materials and disinfectants, shoes and paper products and school stationery. These measures effectively inflict collective punishment on civilians in Gaza through trade sanctions.

The study calls for Israel's full cooperation by applying all the provisions of the WTO Agreement to Palestinian international trade. On the Palestinian side, the study calls for PNA collaboration with, and support of, the Palestinian Shippers Council in its capacity as the national focal point for the Palestinian private sector. A first step in this direction would be the establishment of a Palestinian National Trade Facilitation Committee, as the Agreement stipulates, to coordinate its application with Israeli customs, ports and occupation authorities.

The study was prepared by the UNCTAD secretariat in collaboration with the Palestinian Shippers Council in the context of a capacity building technical cooperation project.


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