1. 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

2. May 2005Economic Policy Programme2 Towards a Sovereign Trade Framework: Main Components Domestic Legislation, Reform and WTO Accession Professor Thomas Cottier

3. May 2005Economic Policy Programme3 This document is an output from a project funded by the UK Department for International Development (DFID) for the benefit of developing countries. The views expressed are not necessarily those of DFID.

4. May 2005Economic Policy Programme4 Essential Elements Membership to WTO Need to establish essential legislation for the conduct of international trade relations: –Foreign Trade Act, Border regime and transit, TBT and SPS issues including a Food Safety Act and Technical Normative Infrastructure Law, Competition and Procurement Laws

5. May 2005Economic Policy Programme5 WTO Membership WTO Accession for Palestine provides a crucial framework for stable trade relations It opens avenues for dispute settlement, protecting Palestinian interests It opens avenues for technical co- operation and training of personnel It provides the basis and framework for domestic trade-related legislation

6. May 2005Economic Policy Programme6 The Foreign Trade Act of Palestine

7. May 2005Economic Policy Programme7 Why a Foreign Trade Act ? Defines jurisdictions in field of trade regulation (Who decides what?) Defines the complex relationship to other laws and agencies (tariffs, TBTs agriculture, SPS/GMOs, services, intellectual property, competition, finance, telecom, etc), all affecting foreign trade Explicit cross-referencing not necessary A single act on all trade is impossible and cannot be found in any country

8. May 2005Economic Policy Programme8 Why a Foreign Trade Act? Most of the substantive trade rules today are defined by multilateral (WTO) and bilateral agreements (e.g. PLO-EU) Domestic law remains important to establish the legal foundations for action in this field –for unilateral action –for action taken within the bounds of international agreements

9. May 2005Economic Policy Programme9 Political Context International –WTO as main institution for global trade –Other multilateral, plurilateral, bilateral agreements Regional –Main trading partners all Members of WTO: Egypt, EU, Israel, Jordan and Gulf countries –Many Arab states not WTO Members: Algeria, Iraq, Lebanon, Libya, Saudi Arabia, Syria, Yemen, Iran

10. May 2005Economic Policy Programme10 FTAP Main Legal Principles Non-discrimination: MFN and NT (WTO) Prohibition of QRs, subject to exceptions (WTO, FTAP) Proportionality (FTAP) Transparency (WTO, FTAP) Trade remedies, safeguards (WTO, FTAP) Legality and judicial review (WTO, FTAP) Consistent interpretation of national and international law

11. May 2005Economic Policy Programme11 Compatibility With International Agreements ‘Pacta sunt servanda’: existing Agreements prevail over the Act and other laws Consider compatibility with international agreements during law-making process Consistent interpretation by Administration and Courts ‘Self-executing’ treaties under domestic law

12. May 2005Economic Policy Programme12 Compatibility With WTO Before Formal Membership “Seek to comply” (Art. 50: 3) Important for structural adjustment and international investment and accession negotiations De jure or de facto application? Deviations from WTO rules are possible since Agreements are not binding prior to Membership (flexibility)

13. May 2005Economic Policy Programme13 Compatibility With WTO After Formal Membership Binding rules and decisions WTO rules provide for exceptions and safeguards Rules subject to international dispute settlement (DSU), including tariff compensation or withdrawal of trade concessions (sanctions, enforcement)

14. May 2005Economic Policy Programme14 Compatibility With National Laws ‘lex specialis’: specific laws prevail will over general rules of FTAP (Art. 20:2) FTAP is superior to regulations of Cabinet and to administrative actions Need to seek compatibility during law- making process Interpretation of other domestic laws in light of FTAP – ‘consistent interpretation’

15. May 2005Economic Policy Programme15 Compatibility With Constitution Constitution as main legal basis of the State supersedes all other national law FTAP has status of primary legislation FTAP must respect basic constitutional provisions (structures and principles) Special procedures possible Question of Influence of Shari’a on trade (economic freedom / contracts)

16. May 2005Economic Policy Programme16 Powers and Organisation Legislative Council: Long term policy and treaty approval President and Cabinet: Operational goals and coherence Cabinet: Enactment of regulations and administrative decisions, subject to delegations to Ministry and Agencies Possibility of provisional application of treaties

17. May 2005Economic Policy Programme17 Administrative and Judicial Review All decisions subject to administrative review by Minister of Trade Judicial review by new Trade Court / Commission: –Relation to other Courts (penal provisions) –Advisory opinions possible International arbitration Additional roles of Trade Court / Commission

18. May 2005Economic Policy Programme18 Conclusions FTAP as the legal umbrella in foreign trade matters brings: Coherence of laws: national & international Transparency Rule of Law: security, stability and confidence building Essential to optimal development of the Palestinian economy and State

19. May 2005Economic Policy Programme19 ECONOMIC POLICY PROGRAMME TOWARDS AN ECONOMICALLY-VIABLE PALESTINIAN STATE: The Regulation of External Trade Monday May 23, 2005 Grand Park Hotel, Ramallah