Israel to ‘reopen’ economic agreements with Palestinians, discuss changes

Israel has agreed to discuss amendments to economic agreements with the Palestinians, reported Globes, in the context of a compromise enabling a transfer of funds to the Palestinian Authority (PA).

As part of that recent move, which saw Israel transfer taxes to the PA collected on the latter’s behalf, “Israel agreed to reopen the Protocol on Economic Relations, also known as the Paris Agreements, with the [PA]”, reports Globes.

The PA has long insisted that the Paris Agreements – dating back to 1994 – should be renegotiated. Among other issues, the PA is “demanding the removal of restrictions applying to Palestinian exports to Israel and other countries and to imports in the Palestinian Authority”.

Citing a “senior Palestinian source”, Globes reported “there is already agreement on a number of important changes that will enable the Palestinian Authority to make progress towards economic independence.”

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After years of refusing to reopen the agreement, the Israeli government “recently consented to a compromise initiated by Minister of Finance Moshe Kahlon, with the support of the defence establishment,” Globes explained.

Kahlon’s approach, backed by the Israeli military and occupation authorities, is that the “quiet” in the West Bank “is the outcome of a reasonable economic situation, and that a stable Palestinian economy is in Israel’s interests”.

The new compromise also ended a stand off that began in February, when Israel implemented a law passed in July 2018, which stipulates that sums paid by the PA to prisoners and their families must be unilaterally deducted from the taxes collected on the Palestinians’ behalf.

In response, President Mahmoud Abbas announced that the PA would refuse to receive any of the tax revenues, which constitute around 40 per cent of the PA’s entire budget.

Israeli officials – concerned “that the funding cut would harm security cooperation between Israel and the Palestinian Authority” – thus formulated a “compromise”. This included “an exemption on fuel excise was granted to the Authority, restoring some NIS 1.5 billion [$0.4 billion] to it.”

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