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ECONOMIC POLICY PROGRAMME

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.

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ECONOMIC POLICY PROGRAMME

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

  2. Introduction to the Day Valerie Yorke London School of Economics Economic Policy Programme

  3. 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. Economic Policy Programme

  4. 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 Economic Policy Programme

  5. 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 Economic Policy Programme

  6. 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 Economic Policy Programme

  7. 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 Economic Policy Programme

  8. 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 Economic Policy Programme

  9. 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 Economic Policy Programme

  10. 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 Economic Policy Programme

  11. 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 Economic Policy Programme

  12. 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 Economic Policy Programme

  13. TRANSITION TO STATEHOOD DAY ONE POST STATEHOOD = Path based on assumptions provided by PA for EPPIII = Decision Point NDTP + FTA MINUS FTA Blocks `C` D NDTP + SECTORAL AGREEMENTS Blocks `A` PARIS PROTOCOL D NDTP + SECTORAL AGREEMENTS D NDTP ONLY D NDTP ONLY TRANSITION TO DECISION PHASE CRITICAL PATH TRANSITION TO WTO MEMBERSHIP AND BEYOND MEMBERSHIP Economic Policy Programme

  14. Session One -1Preparations 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 Economic Policy Programme

  15. Session One - 2Preparations for Negotiations on Economic Permanent Status and Transitional Arrangements on the Way • Twenty Points Framework (2000) • - reflecting Palestinian interests & principles • Legal studies (2000) • Transitional Arrangements (2000) • Options (legal texts) for trade arrangements with Israel (2003) Economic Policy Programme

  16. Session Two -1Future 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 Economic Policy Programme

  17. Session Two -2Future 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 Economic Policy Programme

  18. Session Three -1Towards 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. Economic Policy Programme

  19. 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 Economic Policy Programme

  20. Session Three - 3Towards 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 Economic Policy Programme

  21. 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 Economic Policy Programme

  22. Chart:Timescales, Sequencing and Countdown to Statehood Economic Policy Programme

  23. Timescales, sequencing and countdown to statehood Economic Policy Programme

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

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