Israeli-Palestinian Trade Relations before the Israeli Supreme Court: The Case for an FTAJ

תקציר

English Abstract:The Israeli Supreme Court recently delivered a judgment regarding a trade dispute between a Palestinian importer and Israeli trade authorities. The court relied on a trade agreement between the State of Israel and the PLO (the “Paris Protocol”) of 1994 and concluded in favour of the Israeli authorities, based on a formal reading of the agreement. After analyzing the judgment and concluding that its ruling is correct according to the prevailing law and trade agreement, this article suggests that the judgment underscores the fact that the Customs Union model used to regulate contemporary trade relations between the parties is inadequate. It further argues that a Free Trade Agreement would be a better model, which would allow the Palestinian Authority to take responsibility for its trade policies, design a trade policy that would fit its needs, and promote more equal, reciprocal relations between the parties. Along with a fight against widespread corruption and other democratic and governance reforms within the Palestinian Authority, such a model could reduce its economic dependence on Israel, improve diversification, support economic development, and reduce the concern for fiscal leakage connected to the current trade agreement. Overall, the article highlighted the need for a new trade agreement that promotes economic growth and development for both parties.