The Paris Protocol, concluded in April 1994, and the Washington Agreement, signed between the Palestine Liberation Organization (PLO) and Israel in September 1995, set the procedures and regulations governing economic relations between Palestine and Israel for the interim period.
A result of applying the Israeli import policy is that bilateral trade agreements between Israel and other parties are considered valid in Palestine. Currently, Palestinian traders can benefit from free trade agreements with Canada, the Czech Republic, Hungary, Turkey and Slovakia.
The PLO has the freedom to negotiate and conclude trade agreements, for the benefit of the Palestinian Authority, as long as the same import policy is applied in Israel and Palestine.
The Paris Protocol - Economic Agreement between Palestine and Israel
Bilaterally, the economic agreement states the basic principle of free trade with Israel.
For third party trade, the Paris Protocol regulates the relations between Palestine and the rest of the world as follows:
• Palestinian products are not subject to any export restrictions.
• Trade to and from Palestine has full access to Israeli ports of entry and exit. Palestinian imports and exports are granted equal treatment at the Israeli ports of entry and exit.
• Israeli regulations on customs, purchase tax and standards apply to Palestinian imports with the exception of goods listed in list A1, A2 and B. The Palestinian Authority has the right to apply, within pre-defined quotas, its customs rates, purchase tax and other import charges on those imports. In addition, the Palestinian Authority has autonomy in importing goods listed in A1 and A2 regardless of Israeli standard requirements.
Lists A1, A2 and B are included in the Paris Protocol. Goods imported under List A1 must be locally produced in Jordan, Egypt or in other Arab countries. Goods imported under List A2 can be imported from Arab, Islamic or other countries. Goods imported under List B are not subject to quantitative restrictions but are subject to Israeli standards.
Israeli import policy prohibits trade with several countries, mainly those that do not have diplomatic relations with Israel, including a number of Arab states. The only exceptions are those imports in list A1, A2 and B.