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The Customs Union Between Israel
and the Palestinian Authority

Talia Einhorn
Policy Paper No. 12, From the book:
Israel at the Crossroads, Arieh Stav (ed.),
ACPR Publishers, 1997, 196 pages
(Presented to the J.E.C. on Capitol Hill,
October 21, 1997)



The Israel-PLO Protocol on Economic Relations reflects the schizophrenia that afflicts the Agreement as a whole. Is it an agreement to separate Israel from the Palestinians, politically and economically, or is it an agreement of cooperation that will bring about an integration of their economies? These questions can hardly be answered before the parties have reached a shared clear view of the final status. Whatever political options may be under consideration, the provisions of the Protocol have created a dangerous situation, more of an invitation to a trade war than economic cooperation. The Protocol should have been designed to provide the economic foundation for an improved standard of living and for social progress. Instead, it has contributed to the impoverishment of the Palestinian population.