Palestine : a nation without a state

Abstract

The new economic relations between Palestine and Israel were defined in the Paris Protocol signed in April 1994. This agreement regulates economic relations between the state of Israel and the autonomous Palestinian areas for the duration of the interim period. Although this protocol is formally subordinate to the DOP and the Cairo security agreements, many Palestinians still consider it ultimately more significant since this is the framework in which the Palestinian economy is to be given its new structure and the institutions which will have to administer the economy in the future. Despite the fact that the Paris protocol preserves the unequal relationship between Israel and the territories, it does represent a new order. Whereas under occupation the Palestinian economy was strictly controlled by Israeli military stipulations, the Paris agreement lifts these conditions and pledges open economic borders between the two parties. In agriculture for instance Palestine will enjoy free movement of produce, free of customs and import taxes. In theory the agreement is constant with the PLO's own commitment to promote a free market economy under self-rule which guarantees the central role for the private sector. But these commitments are difficult to honour, as they exist in the context of political and security modalities laid down in the Oslo and Cairo agreements. The Palestinian debate hinges on the issue of whether the Paris protocol provides an opportunity to lay the basis of economic sovereignty, the right of Palestinians to control the economic affairs of their own nation, or augurs the final incorporation of the territories as adjuncts of the Israeli economy.