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Sunday, 9 September 2012 - Palestinians seek to amend economic accord with Israel |
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Simpson attorney tampered with glove | 08 Sep 2012 France's richest man applies to be Belgian, says not a tax move 08 Sep 2012 Jihadists join Aleppo fight, eye Islamic state, surgeon says 08 Sep 2012 Obama widens lead over Romney despite jobs data: Reuters/Ipsos poll 6:37am EDT Discussed 175 Obama widens lead over Romney despite jobs data: Reuters/Ipsos poll 103 Chicago braces for first teacher strike in a generation 85 Democrats attack Romney, defend Obama at convention Sponsored Links Palestinians seek to amend economic accord with Israel Tweet Share this Email Print Related News Policy paralysis scuppers Palestinian economic dream Wed, Sep 5 2012 Security chief slain in restive Palestinian city Wed, Sep 5 2012 Iran's policies attacked by U.N. head, Egyptian leader Thu, Aug 30 2012 Israel court tells settlers to evacuate outpost by Tuesday Wed, Aug 29 2012 Court clears Israeli army over death of U.S. activist Tue, Aug 28 2012 Related Topics World » Israel » By Ali Sawafta RAMALLAH, West Bank | Sun Sep 9, 2012 12:03pm EDT RAMALLAH, West Bank (Reuters) - The cash-strapped Palestinian Authority said on Sunday it has asked Israel to consider overhauling a key economic agreement that has determined its customs and tax rates for the past 18 years, in the wake of street protests against high prices. U.N. agencies and Palestinian economists say the economic sections of the Oslo interim peace deals, outlined in the Paris Protocol of 1994, have been implemented by Israel selectively and mostly to its benefit. "Eighteen years of the Paris economic agreement have become a heavy burden on the Palestinian people and led to very difficult financial and economic conditions," Palestinian Civil Affairs Minister Hussein al-Sheikh told Reuters. The aid-dependent Palestinian Authority (PA), which exercises limited self-rule in the occupied West Bank, has also been plunged into its deepening financial crisis by a drop in assistance from Western and wealthy Gulf backers. The Paris Protocol maps out an economic blueprint for a customs union between Israel and the Palestinian territories and pegs value added tax to Israeli rates, now at 17 percent, effectively blocking any steep price cuts in the West Bank. In another blow to the Palestinian economy, provisions allowing the Palestinians to make free trade agreements with other states and mandating access to Israeli markets have not transpired. Last week, days of street protests in the occupied West Bank against high living costs led Palestinian Prime Minister Salam Fayyad to say on Thursday he would be willing to resign if there was "a real public demand" that he step down. Sheikh said he had sent a letter, at President Mahmoud Abbas's request, to Israel's Defence Ministry "demanding they open" the Paris accord and offering to form joint technical committees to negotiate its amendment. Asked about the Palestinian move, Amos Gilboa, a senior Israeli Defence Ministry official, told Israel Radio: "We have to examine exactly what they are proposing and to see if it's practical." The Palestinian government is grappling with a recurring budget deficit and external debt, both hovering above a billion dollars or nearly a fifth of gross domestic product. Foreign aid is now lagging, as a hoped-for $1.1 billion in 2011 reached only $750 million, as pledges from Gulf states in particular fell short. Some economists say economic growth could be as low as 3-4 percent this year, and with a fifth of the population unemployed, prospects for many of the West Bank's 2.5 million Palestinians are declining. SALARY CRUNCH The Palestinian Authority's cash crisis has delayed salary payments for some 153,000 civil servants several times this year. Perhaps worried the stalling economy will unleash unrest in the territories, Israel is showing flexibility. After a year of negotiation, Israel agreed this summer to streamline the handling of import duties it collects on goods bound for the Palestinian market - duties worth some $100 million a month, around two-thirds of PA income. But Samir Abdullah, director general of the Palestine Economic Policy Research Institute, said the Paris accord need to be renegotiated to free Palestinians from their dependence on Israeli oversight and allow them more leeway to trade abroad. "Israel has not committed to open its market to the Palestinians while the Palestinian market has remained open to it," he told Reuters. Mechanisms for economic dialogue between Israel and the Palestinians were mandated by the interim Paris deal, which like the Oslo accords, was meant to last for only five years pending a final peace agreement between Israel and the Palestinians. A 2000 to 2005 Palestinian uprising led Israel to tighten restrictions on the movement of Palestinian goods and statehood negotiations have been frozen since 2010 in a dispute over Jewish settlement construction. (Writing by Jeffrey Heller in Jerusalem, Additional reporting by Noah Browning in Ramallah; Editing by Sophie Hares) World Israel Tweet this Link this Share this Digg this Email Reprints   We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.   Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter   Facebook   LinkedIn   RSS   Podcast   Newsletters   Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us   Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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