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European Union opens market to Palestinian exports

BRUSSELS—Catherine Ashton, the European Union’s High Representative for Foreign Affairs and Security Policy, and Vice President of the European Commission, has signed an agreement with Prime Minister Salam Fayyad of the Palestine Territories. It gives agricultural products, processed foods, and fish and fishery products originating in the West Bank and Gaza Strip immediate duty-free access to the EU market.

“The only exception from full liberalization is the specific duty for imports of fruit and vegetables under the entry price system. Duty will remain applicable if these entry prices are not respected” the European Union said in a communiqué.

“Facilitating Palestinian trade is a crucial element of the state building process which the EU is supporting both politically and financially. This agreement is the tangible expression of our support,” Ms. Ashton said on the occasion of the signing of the agreement.

The agreement was signed Wednesday at the annual spring meeting of the donor coordination group for the Palestine Territories, the Ad-Hoc Liaison Committee (AHLC). The meeting was hosted by Ms. Ashton, and presided over by Foreign Minister Jonas Gahr Støre of Norway in his capacity as chair of the AHLC.

Prime Minister Salam Fayyad and the Quartet’s Representative Tony Blair attended the meeting. This Brussels meeting is the first in a series of donor meetings planned for 2011.

“This agreement is good news for Palestinian farmers and the wider economy as it provides free access for their agricultural exports to tap into our market of 500 million consumers,” said Dacian Cioloş Commissioner for Agriculture.

“It [the agreement] came about thanks to a genuine and collective commitment from the EU to improve its trade offer in support of the Palestinian economy. More can still be done, on a bilateral, regional and even multilateral level. I would expect to see further trade expansion firmly rooted in a conducive political environment and in visible social and economic gains for the Palestinian people,” said Karel De Gucht, Commissioner for Trade.

The agreement will give immediate access and full liberalization to the EU market, for a transitional period of 10 years, with possible further extension in time, to all agricultural products, processed agricultural products, and fish and fishery products originating in the West Bank and Gaza Strip.

A review clause is envisaged after five years as of entry into force. The only exception is the specific duty for imports of fruit and vegetables under the entry price system that will remain applicable if these prices are not respected. The agreement also envisages new provisions on effective administrative cooperation and assistance, in order to ensure that only Palestinian products will benefit from this specific arrangement.

Under the framework of the Barcelona Process and in accordance with the Euro-Mediterranean Roadmap for Agriculture (Rabat roadmap) adopted on 28 November 2005, the European Commission entered into negotiations with the Palestinian Authority of the West Bank and Gaza Strip on further liberalization of trade in agricultural products, processed agricultural products and fish and fishery products.

The current Interim Association Agreement already provides for duty-free access to EU markets for Palestinian industrial goods and industrial products.

The Palestinian Authority is the smallest trading partner for the EU in the Euro-Mediterranean region and almost worldwide, with total trade amounting to € 56.6 million (the equivalent of $82 million) in 2009 where the vast majority of it is accounted for by EU exports (€ 50.5 million, or $73.1).

EU imports from the Palestinian Authority amount to just € 6.1 million ($8.8 million) in 2009 and consist mainly of agricultural products and processed agricultural products (approximately 70.1 percent of total EU imports). Further market opening on the EU side is expected to support the development of the economy of the West Bank and the Gaza Strip through increased export performance.

(Noureddine Fridhi of Al Arabiya can be reached at: Noureddine.fridhi@mbc.net, and Abeer Tayel, also of AL Arabiya, at: abeer.tayel@mbc.net)