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The
Economic Agreement with Israel
Declaration
of Free Trade – WBGS and the United
States of America
Free
Trade Arrangement between the Palestine
Liberation Organization and Canada
Interim
Association Agreement on Trade & Cooperation between the European Union and
the Palestine Liberation Organization
Interim
Agreement between the EFTA States and the Palestine Liberation Organization
Agreement
on Commercial Cooperation between the Palestine Liberation Organization and
Russia
Preferential
Treatment: Trading with the Arab World
Economic
Agreement between the Palestine Liberation Organization and Jordan
Economic
Agreement between the Palestine Liberation Organization and Egypt
Trade
with Saudi Arabia
The
Economic Agreement with Israel
The Paris Protocol
(PP), 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 the WBGS and
Israel for the interim period.
Bilaterally, the
economic agreement states the basic principle of free trade with Israel.
As for third party
trade, the Paris Protocol regulates the relations between the WBGS and the rest
of the world as follows:
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As for the import policy, the
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 National Authority (PNA) has the right to apply, within
pre-defined quotas, its customs rates, purchase tax and other import charges
on those imports. In addition, the PNA has the autonomy in importing goods
listed in A1 and A2 regardless Israeli standard requirements.
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Lists
A1, A2 and B
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.
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A result of applying the
Israeli import policy is that bilateral trade agreements between Israel and
other parties are considered valid in the WBGS. Currently, Palestinian
traders can benefit from free trade agreements with the following countries:
Czech Republic, Hungary, Turkey and Slovakia.
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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 exception to the WBGS is represented by imports in list A1, A2 and B.
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The PLO has the freedom to
negotiate and conclude trade agreements, for the benefit of the PNA, as long
as the same import policy is applied in Israel and the WBGS.
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Rules of
Origin
Rules of
Origin are a set of rules intended to facilitate the determination of
the country of origin of a certain product. Identifying the country of
origin is needed to benefit from preferential tax and customs duty
exemptions. The rules of origin of a certain product are determined by
three main criteria:
1. Product
tariff shift. The processing undertaken in a particular country must
change the input materials into a product according to a pre-defined
conversion list.
2. Ad
valorem percentage. A certain minimum percentage of value addition
must be produced in a particular country, in order to be the country
of origin (minimum domestic content or maximum import content is
prescribed).
3.
Specific operation. Specific operations in the operational chain of
manufacturing must be undertaken in a country, in order to be the
country of origin. For example, netting could be a key operation in
determining the country of origin of the textile industry.
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Declaration
of Free Trade – WBGS and the United States of America
Under
the Palestinian – United States Free Trade
arrangement, duty free treatment is granted to all
Palestinian products entering the United States and
vice versa. In order to benefit from the duty free
treatment, a certificate of origin – called Form A
– must accompany the goods.
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The American Rule of
Origin
The American definition
for the rule of origin states that the product must be wholly obtained
(grown, produced or manufactured) in the WBGS.
If not wholly obtained
in the country of origin, the product should meet one of the following
rules:
- The direct cost of production in
the WBGS or in the WBGS and Israel, must not be less than 35% of
the value of the product.
- If products from the United States
are used in processing, the costs for these products can
contribute to calculate the 35% (in a portion not superior to
15%).
- For textiles, the country of
origin is determined based on the product tariff shift. Therefore,
the country of origin is considered where the product is wholly
assembled.
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Free
Trade Arrangement between the Palestine Liberation Organization and Canada
According to the arrangement
signed between the two parties, tariffs were eliminated on industrial products.
For agricultural products and processed food, tariffs were reduced or eliminated
in accordance with quotas. The Free Trade Arrangement between the PLO and Canada
is available at the Ministry of Economy and Trade – General Directorate of
International Relations.
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The Canadian Rule of
Origin
A product is originating
in the WBGS/Canada if it is wholly obtained or produced entirely in
the territory of one or both countries.
If not wholly obtained,
because of the use of non-originating materials, the qualification for
“Made in …” for a certain product or raw material is the
transformation level from one product to another according to one of
the following methods:
- The product would undergo a change
in the tariff classification, according to pre-defined conversion
lists.
- The product would undergo a
specific operation carried out in the WBGS/Canada.
The producer should
refer to the first four digits of the Harmonized System code for the
product in question when making inquiries about the specific rule to
apply.
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Interim
Association Agreement on Trade & Cooperation between the European Union and
the Palestine Liberation Organization
The Interim Association Agreement
on Trade & Cooperation grants reciprocal duty free treatment to industrial
products complying with the rule of origin. Concerning agricultural items, the
European Union (EU) grants duty free or reduced tariff treatment on the products
exported to the EU within quotas. The same applies to agricultural imports from
the EU to the WBGS. The certificate of origin, which grants duty free access, is
called EUR.1.
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The European Rule of
Origin
According to the
European rule of origin, the product must be wholly obtained
(extracted and harvested) in the WBGS.
If not wholly obtained
(coming from third parties), non originating materials must have
undergone sufficient working or processing which is defined according
to one of the following methods:
- The product would undergo a change
in the tariff classification according to pre-defined conversion
lists.
- The product would undergo a
specific operation carried out in the WBGS/EU. As a rule, it can
be said that washing, cutting up, packaging and simple assembly of
parts are considered to be insufficient working/processing
operations using non-originating materials or products.
- The use of non-originating
materials is limited to a specific percentage.
If used in the WBGS,
materials originating in the EU are considered as originating as input
materials to make a new product. The same applies to Palestinian
products used in the EU as input materials.
In order to find out the
rule applying to a specific product when using non-originating
materials, the producer should refer to the six-digit code of the
Harmonized System for the product in question when making inquiries.
The Interim Association Agreement is available at the Ministry of
Economy and Trade – General Directorate of International Relations.
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Interim
Agreement between the EFTA States and the Palestine Liberation Organization
The following European Free Trade
Association (EFTA) countries signed an interim agreement with the PLO: Iceland,
Liechtenstein, Norway and Switzerland. The Agreement provides duty free
treatment to most Palestinian and EFTA industrial products. Moreover, duty free
is granted to some Palestinian and EFTA processed agricultural products, while
the majority of processed agricultural products are granted a reduced tariff. A
duty free treatment is also granted to fish and other marine products.
The PLO has signed separate
protocols with the four EFTA countries to identify the agricultural duty free
products, as EFTA countries do not share a common agricultural policy.
The Interim Agreement between the
EFTA states and the PLO, as well as the four agricultural protocols, are
available at the Ministry of Economy and Trade – General Directorate of
International Relations.
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EFTA Rule of Origin
The EFTA rule of origin
is the same applied by the European Union.
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Agreement
on Commercial Cooperation between the Palestine Liberation Organization and
Russia
Both parties extend to one another
the status of the Most Favored Nation (MFN) in regard to trade.
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The WTO and the Most
Favored Nation Treatment
The World Trade
Organization deals with the rules of trade between nations through
agreements that oblige signatories to keep their trade policies within
the agreed upon rules and limitations. Under the WTO agreements,
members should not behave in a discriminatory way towards WTO trading
partners. Therefore, every lowering in trade barriers towards a
trading partner should apply to all trading partners, as all should be
treated as the “most favored nation”.
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Imports and exports between the two
parties are duty free for the following goods:
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Instruments and items specified for montage
and repair;
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Equipment and instruments specified for
undertaking experiments and scientific research;
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Articles for demonstration during fairs and
exhibitions;
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Containers and similar packages utilized in
international trade on a return basis.
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Preferential
Treatment: Trading with the Arab World
Palestinian importers can deal with
all Arab countries when importing goods listed in list A1 and A2, within
pre-defined quotas. Moreover, economic agreements and arrangements regulate
preferential trade relations between the WBGS and the Arab world (Jordan, Egypt
and Saudi Arabia).
Economic
Agreement between the Palestine Liberation Organization and Jordan
The Agreement provides preferential
tariffs for goods traded between the WBGS and Jordan. Goods in Lists A1, A2, and
B entering the WBGS and the agreed upon products entering Jordan are duty free,
provided that the import volume does not exceed the pre-determined quota.
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The Jordanian Rule of
Origin
The rule of origin states
that a product should be wholly obtained (grown, produced or
manufactured).
If not wholly obtained,
the product should at least have 35% of the value added produced
locally (either WBGS or Jordan).
A certificate of origin
is required for exemption.
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Economic
Agreement between the Palestine Liberation Organization and Egypt
The Palestinian-Egyptian Trade
Agreement states that Egyptian products of national origin are exempt from
customs and related duties if in Lists A1 A2 and B. Palestinian products are
granted duty free entrance to Egypt according to a defined list.
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The Egyptian Rule of
Origin
The Egyptian rule of
origin states that the production cost of industrial products of
national origin should consist of a minimum of 40% of local input.
A certificate of origin
is required for exemption.
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Trade
with Saudi Arabia
Palestinians can export all types
of products to Saudi Arabia, but in the mean time, the government of Saudi
Arabia grants duty free treatment to the following Palestinian products:
agricultural products, livestock, metallic and non-metallic raw materials.
In order to benefit from the
preferential arrangement, the rule of origin for Arab countries applies.
Moreover, an official certificate of origin is required, stamped accordingly by
the Saudi Embassy in Jordan or Egypt, together with the official invoice. The
name of the producer, country of citizenship and the rule of origin should be
clearly indicated on the product. At the same time import from Saudi Arabia is
limited to items listed in A1 and A2.
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The Rule of Origin for
Arab Countries
A certain product will be
considered as originating in a country if the following requirements
are fulfilled:
- The product is wholly grown,
produced, or manufactured and substantially transformed in that
country;
- The value of the raw materials
(produced in that country) and the direct costs of production is
at least 40% of the export value;
- The product has been imported
directly from that country.
If used in the WBGS,
materials originating in the Arab countries are considered as
originating as input materials to make a new product. The same applies
to Palestinian products used in the Arab countries as input materials.
An official certificate
of origin must accompany the product.
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