ECONOMIC POLICY PROGRAMME

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May 2005 Economic Policy Programme 1 ECONOMIC POLICY PROGRAMME TOWARDS AN ECONOMICALLY-VIABLE PALESTINIAN STATE: The Regulation of External Trade Monday May 23, 2005 Grand Park Hotel, Ramallah

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ECONOMIC POLICY PROGRAMME. TOWARDS AN ECONOMICALLY-VIABLE PALESTINIAN STATE: The Regulation of External Trade. Monday May 23, 2005 Grand Park Hotel, Ramallah. Introduction to the Day. Valerie Yorke London School of Economics. - PowerPoint PPT Presentation

Transcript of ECONOMIC POLICY PROGRAMME

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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