WORLD TRADE  
ORGANIZATION  WT/L/792 
13 April 2010 
 (10-1898) 
 Original:   English 
  
 
PALESTINE – REQUEST FOR OBSERVER STATUS 
 
Communication from Palestine 
 
  
 The following communication, dated 12 Apr il 2010, has been received from the Permanent 
Observer Mission of Palestine to the United Nations and other Intern ational Organizations. 
 
_______________ 
  
APPLICATION FOR OBSERVERSHIP IN THE GENERAL COUNCIL 
AND ITS SUBSIDIARY BODIES 
 
  The Permanent Mission of Palestine to th e United Nations and other International 
Organizations, has the honour to submit herewith its application for observer status in the General 
Council of the World Trade Organizatio n (WTO) and its subsidiary bodies. 
  In this connection, and pursuant to the Genera l Council rules of procedure, it is the intention 
of Palestine to apply for the Membership of th e WTO and accede to the multilateral trading system 
and its Agreements in the near future, within a ma ximum period of five years. This observer status 
within the WTO,  will enable Palestine to better acq uaint herself with the WTO and its activities, and 
to prepare and initiate negotiations for accession to the WTO Agreement, thereby furthering the 
potential to integrate in the multilateral trading system, as well as improving the livelihood and competitiveness of the Palestinian economy.  
 This observership comes within the comprehensiv e plan and vision of state building set forth 
by Palestinian National Authority. Observership in the WTO is an important requisite to help build 
the necessary infrastructure of state institutions,  pr ovide the premise to review and establish a new 
comprehensive trade regime in line with rules go verning multilateral trade as prescribed  by the WTO 
Agreement, with the aim of encouraging sustainabl e development throughout Palestine, all of which 
are key objectives in creating an independent viable state.  
  The Permanent Mission of Palestine would like to emphasize that this is a technical application, not a political action. This observers hip will be a cornerstone of constructive state 
building as a future Palestinian state will benef it from the technical assistance provided by the WTO. 
 
 
 The Permanent Mission of Palestine would like to request that this application and the accompanying overview of the Palestinian economic  policy and foreign trade regime are placed 
before the General Council for decision at Ge neral Council meeting in May 2010. Mission of 
Palestine would be grateful, Director General Mr. Lamy, if you would take all necessary steps invite 
WTO members to consider grant Palestine ob servership in General Council of May 2010.  
_______________ WT/L/792 
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  OVERVIEW OF THE PALESTINIAN ECONOMIC POLICY AND 
FOREIGN TRADE REGIME 
 
 
I. INTRODUCTION 
A. T
ERRITORY AND POPULATION  
1. Palestine lies on the western edge of the Asian continent and on the eastern extremity of the 
Mediterranean Sea. Its territory comprises two part s - the West Bank, a landlocked area bordered by 
Israel and Jordan, and the Gaza Strip, bordered by Israel, Egypt and the Mediterranean Sea. 
2. The Palestinian population of the West Bank a nd the Gaza Strip was reckoned at 3.8 million 
in the 2007 census, with 2.3 million living in the West Bank and 1.4 million in the Gaza Strip. The 
population has been growing at an annual rate of 3% in  recent years. This rapid growth rate reflects 
both high fertility rates and the influx of Palestinia ns from abroad. The Palestinian literacy rate of 
86.6% ranks amongst the highest in the Arab world.  Arabic is the official language and the first 
language of virtually all Palestinians. English and Hebrew are also spoken. 
 
B. THE ECONOMY  
3. Although it has undergone a significant process of modernization over the past decade, the 
Palestinian economy is still characterized by structur al imbalances and high ex ternal dependence. Its 
vulnerability to external factors has meant that the economy’s perfo rmance over the past years has 
fluctuated widely. 
Agriculture 
 
4. The agriculture sector employs over 15.6% (20 07) of the Palestinian work force. Its 
contribution to the economy varies from year to year, fluctuating with the two-yearly cycle of olive production, climate and the conditions of access to  key neighbouring markets. Its share of GDP 
reached 6.3% in 2007. The variety of climates a llows cultivation of a wide  range of crops. Olive 
cultivation is traditionally the backbone of West Bank  agriculture, accounting for half of all cultivated 
land and generating roughly a quarter of the income  in this sector. Agricultural production was worth 
US$1.11 bn in 2006, of which livestock represented 36.3%; fruits, field crops and vegetables made up 
the remainder.  
Industry 
 
5. The industrial sector (mining and manufacturing) contributes around 10% to GDP. Small, 
owner-operated enterprises characterize this sector . Only 5% of enterprises employ more than 
50 workers while nearly 90% employ less than fi ve.  There are approximately 11,500 establishments 
evenly spread over the various regions of the Palestinian territory. 
6. Mining and stone-based industries are primarily concentrated in the southern areas of the 
West Bank where the quality of stone makes it hi ghly competitive in export markets. The industry 
accounts for around 5% of GDP. Marble and stone expor ts to Israel, Jordan, other Arab countries and 
broader international markets have increased in the past years and now account for around 40% of 
total industrial exports. 
7. Other principal industrial activities include f ood processing, manufacturing of chemicals and 
pharmaceuticals, clothing and textile, leather and bu ilding materials. Overall manufacturing activity 
has decreased in recent years.  WT/L/792 
 Page 3 
 
 
  Services 
 
8. The services sector is the largest contributor to the economy representing 55% of GDP 
according to 2008 statistics.   Wholesale, retail trade, transportation and tourism are major sources of employment, accounting for roughly one third of the jobs in Palestine in 2008. The contribution of 
services to GDP has been underpinned in recent y ears by the doubling employment in the public 
sector since the establishment of the Palestinian Aut hority in 1994 in part re flecting the expansion in 
its operations and functions. The es tablishment of self-rule has stim ulated the re-emergence of the 
banking sector. Whereas at the end of 1993 there were  only four banks operating in the West Bank 
and Gaza, with just 16 branches, there are now 21 banks, with 190 branches. Construction services 
also witnessed a boost since the year 1993 with the peace accord with Israel and the donor assistance 
that flowed to the Palestinian territory thereafter. 
9. Information and Communication Technologies is one of the fastest-growing sectors in the 
Palestinian Territory, mainly thanks to priv ate telecommunications services and an innovative 
software industry. The growth rate of this sector has averaged 25–30% annually since 2000. The 
telecommunication infrastructure witnessed serious improvements over the past years. The Palestine 
Telecommunications Company (PALTEL) was establis hed in 1995; Pal-Cell (Jawwal) was set up in 
1999 to provide mobile phone services. In 2006, the number of telephone lines was approximately 
321,999. Meanwhile, Jawwal counted 821,800 subscribers by 2006, compared to a mere 22,500 in 1999. A recent investment by Zain, the Kuwait- based telecommunications company, in PALTEL, 
which in a share-swap took over 100% of Zain’s m obile operations in Jordan, exemplify the growing 
dynamics of the Palestinian telecoms market. 
10. One sector which has not yet realized its very significant growth potential, given the wealth of 
religious and archaeological sites, is tourism, d espite significant investments in recent years in the 
hotel, travel agency, tourism-related transport and restaurant sectors.  
External Trade 
 
11. Palestine’s external trade is characterized by a significant trade imbalance. In 2007 total 
exports of USD 513 million were exceeded  by imports of USD 3,141.3 million. 
12. Israel is by far the largest trading partner. In 2007 about 73.4% of imported goods came from 
Israel, while 88.7% of Palestinian e xports of goods went to Israel. In ab solute terms, the bilateral trade 
deficit reflects the overall trend. Imports from Isr ael of USD 2,307 million were counterbalanced by 
exports to Israel of just USD 455 million in 2007. Th e situation is different with respect to trade in 
services. Here, Palestinian exports consistently (with one exception in 2004) surpass imports from 
Israel. In 2007 services exports to Israel (includi ng labour) of USD 121.8 million were met by imports 
from Israel of USD 104.7 million. 
13. Palestine’s other main trading partners are th e European Union, Arab countries, European 
Free Trade Association (EFTA), various Asian countries
 such as India, China and others, the United 
States and Canada. Imports of goods from the EU and EFTA amount to approximately 10%, imports 
from Asia approximately 12%, and imports from Arab  countries approximately 3% of total imports. 
The main Palestinian export products are stone and marble, fruits and vegetables, textiles and 
clothing, footwear and leather products, pharmaceutical s and chemicals as well as furniture and other 
wood products. 
14. Palestinian exports of services to third countri es include in particular telecoms, software 
development and consulting services. Software development services are traded with Arab countries, 
European countries and Canada, while consulting servi ces are provided in particular to clients in Arab 
countries and Israel, as well as to International Deve lopment Organizations operating in Palestine.   WT/L/792 
Page 4  
 
  Imports and Exports, Main  Indicators 2000- 2007 
(Value in Million USD) 
 
Indicators 2000 2001 2002 2003 2004 2005 2006 2007 
Total Palestinian Exports 401.0 290.3 240.9 279.7 312.7 335.4 366.7 513.0
Total Palestinian Imports 2,382.0 1,515.6 2,033.6 1,800.3 2,373.2 2,666,8 2,758.7 3,141.3
Palestinian Net Trade Bala nce 1,981.0 1,743.3 1,274.7 1,520. 6 2,060.6 2,331.4 2,392.1 2,628.3
Total National Exports 295.0 217. 8 178.0 195.7 216.1 234.6 263.7 347.6
Total Re-Exports From Palestine 106.0 72.6 62.9 84.0 96.6 100.8 103.0 165.3
Total  Exports From West Bank 323.0 251.9 208.1 234.4 272.8 294.2 332.8 490.7
Total  Exports From Gaza Strip 78.0 38.4 32.7 45.2 35.0 41.2 33.9 22.3
Total Palestinian Imports from 
Israel 1,739.0 1,352.0 1,117.0 1,309.6 1,747.9 1,872.9 2,002.2 2,307.0
Total Palestinian Exports to 
Israel 370.0 273.0 216.0 256.0 281.1 290.6 326.6 455.0
Total  Exports From West Bank 
to Israel 311.0 235.5 189.4 217.0 246.1 253.4 292.6 448.0
Total Palestinian Imports by 
Road 2,129.0 1,811.0 1,283.2 1,521.8 2,102.2 2,410.6 2,336.9 2,631.4
Total Palestinian Imports by 
Pipes and Nets 253.0 157.4 150.5 278.4 130.4 256.1 421.8 509.9
Total Palestinian Exports by 
Road 383.0 290.3 240.9 276.9 312.7 335.4 366.7 513.0
Total Palestinian Exports of 
Services to Israel 129.1 84.8 66.3 73.1 92.6 127.7 131.3 121.8
Total Palestinian Imports of 
Services from Israel 83.1 66.2 49.0 61.6 94.0 119.1 123.2 104.7
Palestinian Net Balance Trade in 
Services 46.0 18.5 17.3 11.5 -1.5 8.6 8.1 17.2
 
 International Aid 
 
15. Economic growth since 1993 has been underpinne d by substantial inflows of foreign aid, 
designed to meet immediate challenges and require ments and to lay the foundation for longer-term 
economic growth.  In 1994-98, Palestine receive d total aid of USD 3.46 billion, of which 
USD 2.6 billion was in support of the development plan .  Inflows of donor funds  were equivalent to 
an annual average of 21% of GDP during this period, and played a significant role in supporting the Palestinian Authority until it coul d build up its own revenue base. 
 16. The latest development plan (PRDP) met ma ssive support in the 2007 Paris conference where 
the international community pledge d USD 7.2 billion as budget support. 
 
II. OVERALL DEVELOPMENT STRATEGY 
 
17. Remedying structural imbalances and laying  the foundations of sustainable economic 
development have been the economic policy prioritie s of the Palestinian Authority since it took over 
the management of the economy in 1994. 
Palestinian Reform and Development Plan 2007 
 
18. The Palestinian Authority’s s hort-term economic development strategy (2008-2010) is laid 
out in the - Palestinian Reform and Development Plan  (PRDP) of 2007. The PRDP is the most recent 
version of the Palestinian Development Plan (P DP), a government programme, updated on a rolling 
(year-by-year) basis, which sets the goals and stra tegies and establishes the general framework within 
which PA ministries and institutions allocate r esources. The PDP was first introduced in 1997,  WT/L/792 
 Page 5 
 
 
  following on from previous programmes, namely : the Emergency Assistance Programme for 1994 
which focused on the rehabilitation of infrastructure;  the Core Investment Programme for 1996, which 
identified the most urgent investment and techni cal assistance needs for physical infrastructure, 
housing and the social sector, private sector suppor t and institutional development; and the Public 
Investment Programme for 1997. The latest PDP,  now named PRDP, covers the period 2008-2010. 
 
19. The August 2009 program of the current government includes direct and clear 
recommendations to initiate a sustainable economic r ecovery and to rebuild the national economy as a 
pillar of a modern Palestinian state in accordance w ith international practices. In this context, the 
Government has defined policy priorities in seven domains. 
• Creating an enabling investment environment : The Government will promote investment 
in Palestine through, inter alia, tax incen tives to local and foreign investors. The 
Government will also develop the package of modern investment laws and regulations to 
promote investment and economic activity.  
• Promoting the role of private sector in social and economic development : Private 
business is an integral part of Palestinian society. The Government will act to enhance 
the role of the private sector in national de velopment. The Government will also support 
the development of Palestinian private sector  institutions to increase their capacity to 
represent the interests of their members.  
• Support Palestinian products and expertise : In all its procurement activities, the 
Government will give priority to Pales tinian goods and services without prejudice to 
competition on grounds of cost and quality.  
 
• Developing national resources : Palestine is abundant with human resources, but has 
limited natural resources. Therefore, the Government will focus on developing human 
capital through an education system that meets the needs of a labour market in a 
productive and globally-competitive national economy. On the other hand, the Government will develop techniques to c onserve and manage our limited natural 
resources for the benefit of the Palestinian society and economy.  
 
• Developing infrastructure : Insufficient and inadequate infrastructure is a major factor 
driving up the cost of production. The Govern ment will develop national infrastructure, 
including industrial zones, electricity networ ks, roads, crossing points, and other critical 
infrastructure to reduce production costs and enable Palestinian products to be more 
competitive in the domestic, regional and international markets.  
 
• Transmit knowledge and support Palestinian innovation : In light of the rapid pace of 
globalization, Palestinian businesses need international exposure to benefit from 
international expertise and promote Palestinian goods and services overseas. The Government will support international knowle dge transfer and marketing activities in 
order to develop and enrich the national ec onomy. In addition, the Government will 
encourage Palestinian inno vation through promoting r esearch and development.  
 
• Expand bilateral and multilateral cooperation : The Government will develop and sign 
agreements on commercial cooperation with st ates that grant Palestine preferential 
treatment, and raise awareness and utilization of existing agreements. The Government 
will also continue efforts to enrol Palestine as a full member of the World Trade 
Organization, World Customs Organizati on and of other international bodies.  
 WT/L/792 
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  III. ECONOMIC POLICIES 
20. Palestine is applying with the full intention of reforming its economic  policies and trade law 
in accordance with the rules and regulations of the WTO.  
Fiscal Policies 
 
21. Public finances are currently characterized by a significant deficit, financed primarily through 
foreign aid, most of it in the form of budget s upport. Government revenue currently accounts for 
about half of government expend iture. Around one third of government revenue is from internal 
sources (tax revenue and non-tax revenue); the rema ining two thirds derive from customs duties and 
VAT levied on imports. Under the terms of the b ilateral Palestinian-Isr aeli agreement on economic 
relations, the Paris Protocol, customs duties and import VAT are usually collected by Israeli 
authorities at the time of importation and remitted to the Palestinian Authority on a monthly basis.  22. As part of the 2007 PRDP the Palestinian Aut hority has embarked on an ambitious fiscal 
reform path with the aim of stabilizing government  expenditure and reduci ng dependency on foreign 
aid. Progress on this path has been slow, howev er, and with USD 623 per head (June 2008) the 
Palestinian population remains among the recipients  of the highest amounts of overseas development 
assistance worldwide. However, a freeze on public sect or wages, limits on growth in public-sector 
employment and the improved collection of utility b ills are contributing to a progressive stabilization 
of expenditure.  Palestine Monetary Authority 
 
23. The Palestine Monetary Authority supervi ses the banking sector, holds the Palestinian 
Authority’s foreign currency reserves and regulates fore ign-exchange dealers. It is in the process of 
transforming into a central bank. Discussions to issu e a Palestinian currency in the future are ongoing. 
At present the New Israeli Shekel, the Jordanian Di nar and the United States Dollar are used in the 
Palestinian Territory.  24. Local lending by Palestinian banks has been trad itionally low, with banks preferring to invest 
deposits abroad. The Palestinian Monetary Author ity enacted recently new regulations aimed at 
encouraging local lending. 
 
Investment Policies 
 
25. While public investment has been rising steadily since 1994, underpinned by donor funding, 
private investment, other than in housing, has been  very slow. The Palestinian Authority introduced a 
number of measures to stimulate domestic and forei gn investment, in particular in productive sectors. 
These have taken the form of investment incentives,  industrial estates and free zones and investment 
guarantees. 
Investment Incentives 
 
26. The 1998 Law for the Encouragement of Investment  offers a series of incentives based on the 
capital invested and the labour force employed. It fully exempts investors from income tax according 
to the amount and the length of the investment, for a variable number of years, and permits free transfer of foreign currency and repatriation of in come generated in the West Bank and Gaza Strip. 
The law applies uniformly to all investors, irrespective of their nationality.  WT/L/792 
 Page 7 
 
 
  Industrial estates and free zones 
 
27. The Law on Industrial Estates and Industrial Free Zones, enacted in 1997, established free 
zones for purposes of export to regional and interna tional markets. The Palestinian Real Estates and 
Free Zones Authority, provides regulatory oversight and off-site infrastructure. It acts as a one-stop 
shop for all licenses, permits and official registrations  needed. The Gaza Industrial Estate was the first 
to open in 1999; the latest is currently being estab lished in Bethlehem where it is planned to cover 
over 50 hectares, employ around 500 people directly  and generate anothe r 1000 indirect jobs. 
 
Investment Guarantees 
 
28. At the request of the Palestinian Authority the Multilateral Investment Guarantee Agency 
(MIGA) has set up the West Bank and Gaza Invest ment Guarantee Fund that provides both foreign 
and local eligible private investors with inv estment guarantees against political risks including 
expropriation, war and civil disturbance for up to USD 5 million per project. 
Palestine Investment Fund 
 
29. The Palestine Investment Fund (PIF) was est ablished in 2000 as an independent public 
Palestinian investment company. PIF invests in viable and strategic projects that promote the 
development of the national Palestinian economy in cluding in sectors such as telecommunications, 
electricity, real estate development and tourism. 
Agricultural Policies 
 
30. The Ministry of Agriculture is responsible for the formulation and implementation of 
agricultural policies. These policies centre on the pr eservation and growth of the agricultural sector 
and are designed with the primary aims of providi ng for a minimum level of food security and of 
encouraging agricultural development as a form of employment generation, in view of its labour 
intensive structure, and as a social safet y net of supplemental family income. 
 31. A major issue facing agricultural development,  and hence facing agricultural policy-making, 
is the scarcity of water resources. Policy respon ses aim at diversifying production by focusing on 
traditional agricultural products such as olives and o live oil while at the same time also encouraging 
the development of higher value-adde d cash crops which can be exported. 
 
Industrial Policies 
 
32. Although industry accounts for only around 10% of the GDP in 2008, certain industries have 
excelled within the Palestinian economy and in expor t potential such as the stone and marble industry, 
pharmaceuticals and processed foods. Palestinian i ndustrial policy therefore aims at increasing 
investment in these sectors, including by provid ing suitable incentives. Policies also aims at 
increasing the value added in production, inter alia by increasing linkages between academic 
institutions and industry in order to foster innova tive research and development. The Ministry of 
National Economy, which spearheads industrial policy- making, is working with the private sector and 
international partners to increase technolog y transfer and introduce automation and quality 
management concepts into this sector. Further work is being done on increasing the competitive 
capacity of Palestinian industry through sectoral clustering and the creation of export consortia. 
 
IV. FOREIGN TRADE REGIME AND POLICY 
 
33.
 Apart from risks and limitations resulting from security-related concerns, Palestine has a 
relatively open trade regime and provides a liberal business environment. There are no restrictions on WT/L/792 
Page 8  
 
  foreign exchange, repatriation of funds and capita l transfers. Apart from preferences accorded under 
bilateral and regional agreements, discriminatory barriers against foreign imports are limited to local 
preferences in government procurement.  34. Palestinian trade policy is formulated and impl emented by the Ministry of National Economy. 
Other Palestinian Authority bodies involved in the regulation of trade include inter alia  the Customs 
Authority (operating under the Ministry of Finance), the Ministry of Health, the Ministry of Agriculture and the Ministry of Planning, as well as ministries and agencies involved in the regulation of services.   Tariffs and Indirect Taxes 
 
35. Under preferential trade agreements concluded with Israel, the Arab States (Arab Free Trade 
Area), the European Communities, EFTA, Turkey and Canada, most goods originating in these 
countries enjoy preferential access to the Palestin ian market. The same applies, on a reciprocal 
unilateral basis, to goods from the United States. Under the bilateral agreem ent on economic relations 
with Israel (the Paris Protocol), the Palestinian Au thority agreed to harmonize most of its import tariff 
rates with Israeli import rates as a minimum floor . However, import tariff rates into Palestine are 
“unbound” under the Paris Protocol and the Palestinia n Authority remains free to raise import tariffs 
at will. In practice, however, Palestinian tariffs are us ually set at the same level as their Israeli tariffs. 
The Palestinian Authority may apply tariffs below Is raeli tariff rates with respect to goods listed in 
annexes to the Paris Protocol. 
 36. Palestinian and Israeli customs authorities, ac ting in coordination under the Paris Protocol, 
have continued to implement trade liberalization re forms.  The average applied MFN tariff has fallen 
from 10.8% in 2000 to 8.9% in 2005, with a maximum rate of 560%.  Tariffs on agricultural goods 
average at a rate of 30%.  The average MFN tariff on non-agricultural products is 5 %.  About 50% of 
all tariff lines now carry a rate of zero.  37. Other duties and charges are set at zero. Domestic indirect taxes consist of a 14.5% VAT, a 
purchase tax of 5% to 20% on a number of "luxury goods ", and various excise taxes; no distinction is 
made between foreign and domestic goods. 
 
Customs  
 
38. As agreed in the Paris Protocol, most Palestin ian imports from countries other than Israel are 
at present cleared by Israeli customs on behalf of  the Palestinian Customs Authority upon landing at 
Israeli ports and points of entry. The resulting tariff and VAT collections are transferred to the 
Palestinian Authority.  39. The Processing of imports is done through the u se of a single administrative document, which 
is produced by ASYCUDA (an automated custom s clearance system sponsored by UNCTAD).  
Customs valuation is performed by the Palestinia n Authority in post-audit procedures, ensuring no 
delay in the clearance of the products.  
 
Import Licensing 
 
40. Import licensing requirements are maintained by  the Palestinian Aut hority for purposes of 
tariff quota administration, safety and security reaso ns. The issuance of import licenses in most cases 
is automatic, with certain exceptions such as automobiles, military products, fissionable and 
radioactive materials, products which pose a threat to human, animal or plant health or life or to 
national security. Under the Paris Protocol, Palestinia n and Israeli authorities are each responsible for 
the licensing of their respective importers.  WT/L/792 
 Page 9 
 
 
  Export Regime 
 
41. The Palestinian Authority does not currently apply export duties, taxes or other charges on 
exported goods.  A wide range of products is s ubject to export control and licensing, mainly for 
sanitary and quality control. Automatic export licensi ng is the basis for the Palestinian Authority’s 
export regime, with some exceptions of products wh ich cannot be exported without a license, relevant 
to security and security related technology. 
Technical Regulations, Standards and Sanitary and Phytosanitary Measures 
 
42. The entry of some goods into the Palestinian ma rket is subject to requirements relating to 
technical regulations, sanitary or phytosanitary measures. The Palestinian Authority applies 
Palestinian measures to locally produced goods as we ll as all imports, including those from Israel. For 
third country imports Israeli requirements are usually  enforced in addition at the time of entry, as 
agreed under the Paris Protocol, to avoid the indir ect importation of sub-standard goods. Palestinian 
TBT and SPS measures are applied post-audit. 
 
43. The Palestine Standards Institute, which was established in 1996 with a mandate to develop 
Palestinian standards, has already adopted 630 nationa l standards.  The Institute is in the process of 
developing a set of further standards in accordance with European directives . A process of 
consolidation of all governmental laboratories is  under way, with the aim of converting the public 
health lab of the Ministry of Health into the Palestinian Food and Drug Administration, thereby 
unifying the address for SPS under one institutional stru cture, and ensuring efficiency within the 
process.  
Trade in Services 
 
44. The Palestinian Authority further maintains a re latively free trade regime for trade in services 
into and out of Palestine. The banking, insuran ce and other financial services sectors are regulated 
according to international standards and practices  and in a non-discriminatory manner. In the 
telecommunications sector, a competitive market fo r mobile services is emerging. An independent 
telecommunications regulator is in the process of  being established, which would include both the 
public and private sectors, and which would work  on the regulation of the sector according to 
international standards and best practices. 
 45. Tourism, being one of the most important services sectors, is regulated by the Ministry of 
Tourism and Antiquities.  A Public – Private Partnership has just been formed under the title of the “Palestinian Tourism Board” which will be hande d over the power of regulating and recommending 
policies to the Government relevant to tourism.  Th e tourism sector is currently loosely regulated and 
issues such as entry of foreign tourist guides in permitted with minimal requirements.  The same is 
applicable for tourism transport services and tour operators.  
Intellectual Property 
 46. As part of the 1995 Interim Agreem ent with Israel it was agreed that the Palestinian Authority 
would ensure that legislation and enforcement will be consistent with the WTO Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRI PS). The prevailing laws in Palestine, however, 
predate 1954 and need to be updated. The PA is in the process of drawing up legislation to conform to 
international standards with technical assistan ce from the World Intellectual Property Rights 
Organization (WIPO). WT/L/792 
Page 10  
 
  Legal Framework 
 
47. The Palestinian legal framework is a combina tion of several layers of laws ranging from 
British Mandate laws, Ottoman laws , Israeli military orders still in  effect, Jordanian pre-1967 laws 
and Palestinian laws issued after 1995.  A legal re form process is on the way, with new laws which 
have been adopted to replace old laws and drafts  of new laws which are pending approval by the 
Legislative Council.  Some of the new laws include the following: 
• Investment Promotion Law 
• Corporate Registration Law 
• Income Tax Law 
• Quality Infrastructure Law 
• Corporate Income Tax Law 
• Capital Markets Authority Law 
• Palestinian Monetary Authority Law 
• Commercial Agencies Law 
 
Draft laws pending approval include the following: 
 
• Movable Assets Registry Law 
• Secured Lending and Leasing 
• Commercial Leasing Law 
• Commerce Law 
• Foreign Trade Act 
• Food Safety Law 
• Plant Protection Law 
• Veterinary Services Law 
• Competition Law 
 
Trade Agreements  
48. A key trade agreement is the 1994 Paris Protocol , which provides for free trade in originating 
products between the Israeli and Palestinian markets and for coope ration between Israel and the 
Palestinian Authority with respect to aspects of the regulation of trade with third parties. Cooperation 
and harmonization measures aim to reduce risk of  trade deflection and circumvention of trade 
measures.  49. The Palestinian Authority has concluded the follo wing trade-related agreements in addition to 
the Paris Protocol: 
 
• The Technical and Economic Cooperation Acco rd between the Arab Republic of Egypt 
and the Palestine Liberation Organization  of January 25, 1994, eases border restrictions 
and provides for the creation of free-transit areas and the use of Egyptian ports, airports and land borders. 
 
• The Trade Agreement between the Governme nt of the Hashemite Kingdom of Jordan 
and the Palestinian National Authority of January 26, 1995, provides for the duty-free 
import by the other party of 77 products originating in Jordan and 60 products 
originating in the West Bank and Gaza. 
  WT/L/792 
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  • The Euro-Mediterranean Interim Associa tion Agreement on Trade and Co-operation  
between the European Communities and the Palestine Liberation Organization for the 
Benefit of the Palestinian Authority of the West Bank and Gaza Strip  of February 24, 
1997, formally brings Palestine into the emerging Euro-Med area and endorses the Palestinian Authority’s status as a full partner in the Barcelona process. It confirms 
concessions granted by the EU to the Pales tinians since 1986 (duty-free access to the EU 
for Palestinian products subject to some ag ricultural quotas) and provides for financial 
and economic co-operation.  
• The Interim Agreement between the European  Free Trade Area states and the Palestine 
Liberation Organization for the Bene fit of the Palestinian Authority  of November 30, 
1997, grants duty-free access to the EFTA markets for products from the West Bank and 
the Gaza Strip.  
 
• The Joint Canadian Palestinian Framew ork for Economic Co-operation and Trade   o f  
February 27, 1999, provides for duty-free access for a  number of Palestinian goods and services to the Canadian market. 
 
• The Arab Free Trade Area (AFTA), which was in itiated in 1997 and to  which the PLO is 
an original signatory, opens the door for Pal estinian exports to a large number of regional 
markets. In addition, the untapped potentia l through diagonal cumulation, provided by 
the Palermo Protocol, with countries in the AFTA who are also members in the Pan-Euro 
Mediterranean area, opens many prospects fo r exports to the Pan-Euro Mediterranean 
area. 
 
50. Reciprocal preferences have been further estab lished with the United States on the basis of 
unilateral action. The US Presidential Proclamation
 of November 13, 1996, grants duty-free treatment 
to products of the West Bank and Gaza enteri ng the US market. The Palestinian Authority 
reciprocated unilaterally and granted US products  duty-free treatment upon entering the West Bank 
and Gaza. 
 
__________