ECONOMIC POLICY PROGRAMME
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Transcript of ECONOMIC POLICY PROGRAMME
May 2005 Economic Policy Programme 1
ECONOMIC POLICY PROGRAMME
TOWARDS AN ECONOMICALLY-VIABLE PALESTINIAN STATE:
The Regulation of External Trade
Monday May 23, 2005Grand Park Hotel, Ramallah
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Introduction to the Day
Valerie Yorke
London School of Economics
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This document is an output from a project funded by the UK Department for
International Development (DFID) for the benefit of developing countries. The views
expressed are not necessarily those of DFID.
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Purpose of Presentation
• To provide overview of EPP work
• To present: – Main results
– Interconnectedness of parts
– Relevance and operational applicability
– Contribution to requirements for workable WTO-compatible sovereign trade framework for statehood and beyond
• To introduce EPP Overview “Planning for Statehood:– What has been achieved? What remains to be done?
– Matrices of trade-related activities - suggested priorities
– Work-plan with sequencing & timescales to statehood & beyond
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What is the EPP? Who are the stakeholders?
• Collaborative venture• Coordinated by MNE and LSE• Guided by MNE; Palestinian public and private
sectors• Supported by multi-disciplinary team of senior
international and regional lawyers, economists, technical experts
• Funded by DFID; formerly by EU
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Overall Purpose – 1To Support an Economically-Viable
Palestinian State
Programme of policy support :
• Providing PA with policy analysis and advice, policy options, proposals for legal texts and strategies
- across four interrelated tracks
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Overall Purpose -2 To Support an Economically-
Viable Palestinian State
EPP Mandate
• Economic permanent status negotiations and transition
• Development of trade and tariff options
• WTO-compatible sovereign frame for trade
• WTO accession
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How is EPP implemented ?
• PA horizontal guidelines and assumptions• Drawing up of detailed TORs• Co-ordinating and strategy sessions• Missions to Palestine (fieldwork and interviews)• Roundtables (Ramallah /London /Geneva)• E-mail communications• Studies, opinions, options, strategies• Palestinian and consultant feedback• Peer Review, Editing, Submission
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PA Political and Economic Assumptions - 1
• Foundation of an independent, sovereign, viable Palestinian state
• Separate customs territory• Political boundaries, territorial continuity,
contiguity, one geographical unit• East Jerusalem as capital of Palestinian state -
Jerusalem an Open City or Divided• No Israeli settlement on territory• Open economic relations with Israel based on
WTO rules
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PA Political and Economic Assumptions -2
• Application for WTO observership leading to membership as soon as possible
• Economic relations with Israel based either on NDTP or, as (as fall back), on FTA;
• No formation of a CU this stage• No continued reliance on Paris Protocol• Continuation of Free trade arrangements with
EU and US• Recognition of legitimate security interests only
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What has Been Achieved?
Legal / economic analysis and advice, options papers, proposals for draft legislation, strategies
• Complementing each other• Within an overall coherent approach• Providing building blocks for
– negotiations– development of trade policy options– WTO – compatible domestic legislation and
development of institutions to implement laws
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Diagram
• Capturing / bringing together – PA assumptions– EPP mandate– Choice of options
• Demonstrating flexibility of work in planning alternative outcomes
• Sequencing the above for WTO accession
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NDTP + SECTORAL
AGREEMENTSBlocks `A`
NDTP + SECTORAL
AGREEMENTS
FTABlocks `C`
NDTP ONLY
D
NDTP ONLY
NDTP + FTA MINUS
TRANSITION TO STATEHOOD
POST STATEHOODDAY ONE
= Path based on assumptions provided by PA for EPPIII = Decision Point
CRITICAL PATH
TRANSITION TO DECISION PHASE
TRANSITION TO WTO MEMBERSHIP AND BEYOND
MEMBERSHIP
PARIS PROTOCOL D
D
D
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Session One -1
Preparations for Negotiations on Economic Permanent Status and Transitional
Arrangements on the Way
Presentation of alternative forms of agreement with Israel (building blocks)• To meet economic / trade requirements of transition (including through a planned withdrawal from Gaza)• Which may accompany NDTP (MFN) and also constitute steps toward an eventual FTA with Israel later on
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• Twenty Points Framework (2000)
- reflecting Palestinian interests & principles• Legal studies (2000)• Transitional Arrangements (2000)• Options (legal texts) for trade arrangements
with Israel (2003)
Session One - 2
Preparations for Negotiations on Economic Permanent Status and Transitional
Arrangements on the Way
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Session Two -1
Future Trade Policy Options: NDTP and keeping options open for an FTA with
Israel
Irrespective of shape of Palestine-Israel trade relations at statehood, Palestine will
need a trade policy and tariff structure of its own, if it is to break out of the Paris Protocol
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Session Two -2
Future Trade Policy Options: NDTP and keeping options open for an FTA with
Israel
• Options for Tariff Policy for Palestine- 4 scenarios – low and uniform- maintain FTAs with EU and US
• NDTP: Risks and Challenges
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Session Three -1
Towards a sovereign trade framework: main components, domestic legislation, reform and
WTO accession
To conduct international trade relations and taking into account aspiration to accede to WTO Palestine will require:
• Indispensable WTO-compatible domestic legislation
• Institutions to implement that legislation.
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Session Three - 2Towards a sovereign trade framework
Presentation of key features for Day One of Statehood, how they interrelate :
• Foreign Trade Act • Border Control and transit• TBT and SPS issues including Food Safety Act and Technical Normative Infrastructure Law • Competition and Procurement Laws• [Tariff Act]Other areas to be addressed later on : foreign direct investment, IP
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Session Three - 3
Towards a Sovereign Trade Framework
Progress in developing WTO-compatible legislation in line with best practice
But challenge remains: To create infrastructure for Palestine to benefit from WTO agreements
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Session Four
Planning for Statehood: Next Steps for Palestine
• How can EPP results be used in short, medium & long term? • What has been achieved? What remains to be done?
Open discussion
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Chart:
Timescales, Sequencing and Countdown to Statehood
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PLANNING FOR STATEHOOD
I TRADE POLICY OPTIONS DAY 1 STATEHOOD NDTP PLUS (A)
WTO ACCESSION (B)
DAY 1 FTA (C)
TIMESCALE TASK
COMPLETED
PHASE 1 30 MONTHS
A PHASE 2 24 MONTHS
B PHASE 3 18 MONTHS
C PHASE 4 FUTURE
1 1 UNILATERALLY ADOPTED NDTP
1.1 to 1.2 2 1 TRADE POLICY
TOWARDS ISRAEL
2.1 to 2.2 3 1 TRANSITIONAL
ARRANGEMENTS
3.1 to 3.2 4 1 WORK PLAN
SEQUENCING
4.1
II SOVEREIGN TRADE REGIME: KEY DOMESTIC POLICY
- FIRST PRIORITY ISSUES DAY 1 STATEHOOD
NDTP PLUS (A) WTO ACCESSION
(B) DAY 1
FTA (C)
TIMESCALE TASK
COMPLETED
PHASE 1 30 MONTHS
A PHASE 2 24 MONTHS
B PHASE 3 18 MONTHS
C PHASE 4 FUTURE
5 1 FRAMEWORK FOR TRADE POLICY
5.1 6 1 FOREIGN TRADE
ACT
6.1 to 6.4 6.5 6
6.6to 6.7 6 6 A 6.8 to 6.9 9
6.10 to 6.15 9 6.16 to 6.17 9 6.18 to 6.20 3 A 3
6.21 6 6.22 9
Timescales, sequencing and countdown to statehood
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ECONOMIC POLICY PROGRAMME
TOWARDS AN ECONOMICALLY-VIABLE PALESTINIAN STATE:
The Regulation of External Trade
Monday May 23, 2005Grand Park Hotel, Ramallah