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 April 2010, has been received from the Permanent Observer Mission of Palestine to the United Nations and other International Organizations.
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APPLICATION FOR OBSERVERSHIP IN THE GENERAL COUNCIL
AND ITS SUBSIDIARY BODIES

The Permanent Mission of Palestine to the 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 Organization (WTO) and its subsidiary bodies.
This observer status within the WTO,  will enable Palestine to better acquaint 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.
Observership in the WTO is an important requisite to help build the necessary infrastructure of state institutions,  provide the premise to review and establish a new comprehensive trade regime in line with rules governing multilateral trade as prescribed  by the WTO Agreement, with the aim of encouraging sustainable development throughout Palestine, all of which are key objectives in creating an independent viable state.
a landlocked area bordered by Israel and Jordan, and the Gaza Strip, bordered by Israel, Egypt and the Mediterranean Sea.
The Economy
Although it has undergone a significant process of modernization over the past decade,
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.
One sector which has not yet realized its very significant growth potential, given the wealth of religious and archaeological sites, is tourism, despite significant investments in recent years in the hotel, travel agency, tourism-related transport and restaurant sectors.
Software development services are traded with Arab countries, European countries and Canada, while consulting services are provided in particular to clients in Arab countries and Israel, as well as to International Development Organizations operating in Palestine.
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International Aid

Economic growth since 1993 has been underpinned by substantial inflows of foreign aid, designed to meet immediate challenges and requirements and to lay the foundation for longer-term economic growth.
The PDP was first introduced in 1997, 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 technical assistance needs for physical infrastructure, housing and the social sector, private sector support and institutional development; and the Public Investment Programme for 1997.
The Government will develop national infrastructure, including industrial zones, electricity networks, 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.
Progress on this path has been slow, however, and with USD 623 per head (June 2008) the Palestinian population remains among the recipients of the highest amounts of overseas development assistance worldwide.
Palestine Monetary Authority

The Palestine Monetary Authority supervises the banking sector, holds the Palestinian Authority’s foreign currency reserves and regulates foreign-exchange dealers.
The Gaza Industrial Estate was the first to open in 1999; the latest is currently being established in Bethlehem where it is planned to cover over 50 hectares, employ around 500 people directly and generate another 1000 indirect jobs.
Investment Guarantees

At the request of the Palestinian Authority the Multilateral Investment Guarantee Agency (MIGA) has set up the West Bank and Gaza Investment Guarantee Fund that provides both foreign and local eligible private investors with investment guarantees against political risks including expropriation, war and civil disturbance for up to USD 5 million per project.
These policies centre on the preservation and growth of the agricultural sector and are designed with the primary aims of providing 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 safety net of supplemental family income.
Policy responses aim at diversifying production by focusing on traditional agricultural products such as olives and olive oil while at the same time also encouraging the development of higher value-added cash crops which can be exported.
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

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 Palestinian market.
Customs

As agreed in the Paris Protocol, most Palestinian 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 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.
Technical Regulations, Standards and Sanitary and Phytosanitary Measures

The entry of some goods into the Palestinian market is subject to requirements relating to technical regulations, sanitary or phytosanitary measures.
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 structure, and ensuring efficiency within the process.
Intellectual Property

As part of the 1995 Interim Agreement 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 (TRIPS).
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

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 cooperation between Israel and the Palestinian Authority with respect to aspects of the regulation of trade with third parties.
The Euro-Mediterranean Interim Association 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 Palestinians since 1986 (duty-free access to the EU for Palestinian products subject to some agricultural quotas) and provides for financial and economic co-operation.
In addition, the untapped potential 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 for exports to the Pan-Euro Mediterranean area.