EU-PLO agreement

Economic relations between the European Community and the Palestinian Territories were limited, up until recently, to the preferential regime granted unilaterally in 1986 by the Community to Palestinian exports. Since the Israeli-Palestinian peace agreements of September 1993 (see Oslo peace process) and the putting in place of Palestinian autonomy, the European Union had on several occasions reiterated its wish to contribute to the Middle East peace process. It was therefore logical for it to decide to include the Palestinian Territories in the objectives of the Euro-Mediterranean partnership launched in Barcelona in November 1995.

A five-year « Interim Euro-Mediterranean Association Agreement for Trade and Cooperation » was signed on 24 February 1997 by the PLO and the European Union. It was approved on 9 April 1997 by the European Parliament (372 in favour, 5 against, 4 abstentions). In terms of access to Community markets for Palestinian products, it reaffirms the preferential regime granted since 1986 (the quotas will be reviewed in two years time) and provides for a progressive dismantling of tariffs. As for Palestinian imports of Community products, they should not be prejudicial to the Palestinian economy. The agreement provides for the possibility for the Palestinians to impose certain tariff barriers for industrial products from the Community. Free trade should be unlimited within the next five years. In terms of financial support, the Palestinians will benefit from funding provided by the « Euro-Mediterranean Partnership » under the MEDA budget line. Furthermore, the agreement very much stresses the need for regular political dialogue between the European Union and its Palestinian partner.

Because the Oslo Agreements do not permit the Palestinian National Authority (PNA) to sign international agreements, the agreement was signed by the PLO on behalf of the PNA. In other respects, as long as the legal status of Palestinian Territories is not finalised within the framework of the Israeli-Palestinian negotiations, this is just an interim agreement signed by the Commission and ratified by the European Parliament, but not by the Member States. If the Palestinian Authority manages to obtain the necessary legal status – in the framework of an agreement between Israel and the PLO on the permanent status of the Palestinian Territories – the Commission could ask the Council of Ministers, after a period of five years, for a mandate to negotiate an Association Agreement identical to those concluded or under consideration between the Union and non-EU Mediterranean countries.

The correct application of this agreement depends largely on the development of the situation in the Palestinian Territories (the regular cordoning off of the Palestinian territories by the Israeli army) and – as nearly all the goods exchanged and the subsidies granted transit through Israel – of the Israel authorities’ good will (severe security controls and unjustified customs barriers).

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