Wednesday, September 9, 2009

Business Seeks Ways Past Political Impasse

By Mel Frykberg

"RAMALLAH, Sep 8 (IPS) - Business between the Palestinian Authority and Israel is growing despite the political impasse over Israel's refusal to cease illegal settlement building in East Jerusalem and the Palestinian West Bank.

Trade between Israel and the Palestinian Authority (PA) rose 17 percent to 3.9 billion dollars in 2008, according to the Israeli Tax Authority (ITA). In 2007 it was 3.3 billion dollars, and in 2006, 3 billion.

Palestinian imports and exports through Israeli ports rose by 5 percent to 1.2 billion dollars last year, up marginally from earlier years.......

Under the Paris Protocol of 1994, a part of the Oslo agreement, Israel controls a customs union comprising Gaza and the West Bank. It collects a duty on imports into the West Bank and Gaza, and additionally collects a value added tax (VAT) on goods and services from Israel destined for the Palestinian territories.

The Israelis have often withheld these taxes as a political tool, as when Hamas won the 2006 legislative elections.

"The Protocol perpetuates Palestinian economic dependence on the Israeli economy, and preserves Israeli control over the Palestinian economy," says Israeli rights group B'tselem.

Israel has sole control over the occupied territories, and this enables it to unilaterally stop movement of Palestinian imports and exports. The Protocol gives Israel sole control over collecting taxes for the Palestinian Authority for imported goods, which enables it to stop or suspend transfer of payments as a means of pressure or punishment.

The Protocol also enables Israel to unilaterally establish taxes on imported goods, giving preference to its own economic interests........"

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