May 2005Economic Policy Programme1 ECONOMIC POLICY PROGRAMME TOWARDS AN ECONOMICALLY-VIABLE PALESTINIAN STATE: The Regulation of External Trade Monday May 23, 2005 Grand Park Hotel, Ramallah

May 2005Economic Policy Programme2 Towards a Sovereign Trade Framework: Transit Rights Daniel Crosby White & Case – Geneva

May 2005Economic Policy Programme3 Outline Assumptions WTO Transit Rules –Benefits and limitations Day One of Statehood –Need for “WTO Plus” rules Sectoral Transit Agreement Additional Disciplines Security Concerns Essential co-operation

May 2005Economic Policy Programme4 Political Assumptions Territorial contiguity between West Bank and Gaza “Sovereign link” between territories From Day One: independent, sovereign, viable Palestinian State Recognition of Israel’s legitimate security interests

May 2005Economic Policy Programme5 Legal / Economic Assumption Conduct of sovereign trade policy assumes right to import from and export to trading partners

May 2005Economic Policy Programme6 WTO Transit Rules Benefits of GATT Article V –Right to transit Of Palestine Of trading partners –Cost-based “reasonable” fees –MFN –National Treatment

May 2005Economic Policy Programme7 WTO Transit Rules GATT Article V Limitations –Not specific –No jurisprudence Overriding security concerns Insufficient legal and economic certainty

May 2005Economic Policy Programme8 Day One of Statehood Transit essential to conduct trade GATT transit disciplines insufficient Need to establish “WTO Plus” transit disciplines in sectoral agreement as building block towards FTA

May 2005Economic Policy Programme9 Sectoral Transit Agreement from Day One WTO Plus: –Provide specific definitions and procedures –Designate transit routes and facilitates –Apply TIR Convention to extent possible

May 2005Economic Policy Programme10 “Traffic in Transit” “The passage of people, goods, and means of transport, including unaccompanied baggage, across the territory of one Party by land, air, or sea transportation when such passage includes part of a complete journey beginning, continuing or terminating within the territory of the other Party.”

May 2005Economic Policy Programme11 Consultations and Dispute Settlement WTO rules –Security exceptions Joint Transit Committee Consultations Detailed dispute settlement panel procedures

May 2005Economic Policy Programme12 Additional Transit Disciplines Trade Agreement – Option B –Static transit rules –Limited cooperation

May 2005Economic Policy Programme13 Additional Transit Disciplines Free Trade Agreement – Option C –Specific transit rules Designation of transit facilities Transparency and operational rules –Flexible procedures –Increased cooperation under JTC –Dispute settlement provisions –Restrictions on security measures

May 2005Economic Policy Programme14 Security Concerns Agree on security exceptions Explicit agreement on security measures Reality check on contiguity assumption

May 2005Economic Policy Programme15 Transit Cooperation Efficient administration Assuage security concerns Joint Transit Committee Third party involvement

May 2005Economic Policy Programme16 ECONOMIC POLICY PROGRAMME TOWARDS AN ECONOMICALLY-VIABLE PALESTINIAN STATE: The Regulation of External Trade Monday May 23, 2005 Grand Park Hotel, Ramallah