PRESS RELEASE CONTACT: Hanan Taha Rayyan: htaha@paltrade.

org, +970-599-417919

PNA SHOULD RECONSIDER PARIS PROTOCOL, NEGOTIATE NEW AGREEMENT WITH ISRAEL

New PalTrade report finds asserts that current Israeli-Palestinian trade agreement is hindering
Palestinian private sector development: Israel refuses to recognize trade agreements signed with
third parties with the potential to offset some of the damage caused by the closure regime.

Ramallah, June 16 2010 -- A new report by PalTrade -- The Palestine Trade Center -- points to the none
implementation of Paris Protocol, the agreement negotiated with Israel in 1994 that still regulates Palestinian National
Authority (PNA) trade, as a central impediment to the development of the Palestinian private sector.

The report notes that in recent years the Palestinians have negotiated a number of highly favorable trade agreements
with third parties. These had the potential to offset some of the damage resulting from the economic restrictions
imposed by the Israeli closure regime. According to the Paris Protocol, however, implementation of these agreements
requires Israeli cooperation. In all cases, Israel has refused to provide it. A particularly problematic example is Israeli
non-recognition of the EU-PLO Interim Association Agreement.

The authors demonstrate the potential of trade to boost the Palestinian economy, unrealized in the current policy
environment, by comparing Palestinian and Jordanian exports to countries with which both have similar trade
agreements. Despite similar points of departure, Jordan now leads by a very wide margin.

Private sector growth is crucial if we hope to reduce our dependence on aid and establish a fiscally stable Palestinian
State, said Maher Hamdan, PalTrade CEO. Palestinian enterprise has yet to show signs of sustainable growth,
however. One of the primary reasons is continued Israeli restrictions on access to markets. As this report shows, the
restrictions are not only physical and administrative, but also the result of a consistent Israeli refusal to recognize
favorable Palestinian trade agreements with third parties. The Paris Protocol, envisioned as an interim agreement, is
no longer functioning as a mutually beneficial framework. Under these conditions, the PNA should reconsider it.

The PalTrade report was funded by the Government of Norway and supervised by the World Bank.

The full report can be downloaded here.

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