Globalisation

By Jamil Salman – Amman

Despite the recent surge in studies criticising the effects of globalisation and, by extension, the World Trade Organisation, Palestinian officials have remained steadfast in their desire to expose the economy to the effects of globalisation. To some, membership at the WTO has become the next integral step in not only ending economic depression, but achieving Palestinian statehood. This is in part due to the major deficiencies regarding the shared Customs Union with Israel.

As has been proven, a Customs Union will always remain economically infeasible despite the many proposed changes to the Paris Protocol. The political instability, security measures and the porous border control – which leads to much more smuggling than anyone would care to admit (it has been estimated that the Israeli-Palestinian Customs Union has created total sum losses that range from anywhere between 4.5-5.2 Million Dollars. Smuggling meanwhile, has amounted to leakages of up to 40% of potential trade revenues) – all weigh heavily on the success of this trading option. Hence the WTO is increasingly becoming the popular choice as it encourages liberal solutions that are both economically and politically advantageous. Most of these benefits would arise directly as a result of the removal of anti-trade biases (most of which have been a direct result of Israeli interference in Palestinian affairs) and the allocation of resources to industries with the greatest potential. As such, Palestine would have to be prepared to reshape its entire commercial structure based on the expectation of global exposure and unrestricted access across economic borders.

This much was confirmed by Palestine’s most recent interaction with the WTO at the Hong Kong Ministerial Conference. Not much has been made of this event, yet it could well mark the watershed development of their modern economic recovery. In this instance, the Palestinian Liberation Organisation (PLO) submitted a request for observer status on behalf of the Palestinian Authority at the 2005 Hong Kong Conference. The PLO claimed that this exposure was necessary for Palestinian officials who would learn first-hand about the intricacies of the operation of a multilateral trading system. This experience would be used to "significantly contribute to, (our) on-going efforts in formulating a comprehensive trade policy for Palestine." The PLO thus made their position clear; they expected observer status to expedite their transition towards a WTO-based autonomous commercial agenda, with a view to permanent membership in the near future.

At Hong Kong, Palestine’s observer status entitled them to very little in terms of authority and influence over the scope of issues discussed. Nevertheless, by accepting that Palestine was entitled to some form of involvement at the Hong Kong proceedings, the WTO essentially acknowledged that the Occupied Palestinian Territories (OPT) had the right to partake in "matters of direct interest to them." One could interpret this acceptance as a symbolic recognition of the major role that International Trade, and more specifically, the WTO, has to play in restoring a defunct Palestinian economy. The PLO, for their part, took advantage of what limited authority they did have by addressing the WTO members with a statement aimed at advocating free trade and multilateralism in a Palestinian context. Saeb Bamya, representing the PA, was adamant that “The Palestinian Authority is committed to the idea of an open economy and to the rule of law in foreign trade relations, as well as…integration into the rules-based multilateral trading system.” Palestine’s public commitment to the principles of the WTO was more than a publicity stunt aimed at garnering support for their embattled political status. There is genuine belief amongst officials that a globalised Palestine is a “normal” Palestine, as was echoed numerous times by Bamya himself throughout his address. This process of “normalisation” through globalisation assumes an expansive role regarding Palestinian stability. David Fidler, an expert on International Law and the economics of the Occupied Territories, supports this view with his formulation of “no peace – no trade, no trade – no peace;” and it very much encompasses the dilemma Palestinian officials find themselves in at this crucial economic junction of Palestine’s future. Saeb Bamya recognises as much when he emphatically declares that the WTO is an “opportunity, an inspiration,” a fundamental building block towards establishing peace. Meanwhile, on a more regional level, Palestine’s intentions have been affirmed by the PA’s former Economics Minister, Bassem Khoury, who days before his resignation, spoke at length about the role of global trade as a key instrument for Palestinian recovery and growth. 

It appears then, that the Territories have fully identified with Fidler’s formulation; and though it may appear to be over-simplifying an increasingly complicated problem, it has nonetheless emerged as a very possible concept to strive for. One of the appealing advantages of reaching for economic independence is that it submerges the political overtones that are fraught over every aspect of Israeli-Palestinian relations. People are well aware of the political animosity within the region, yet with the backing of the WTO, a 150 plus strong body, economic integrity trumps political will, or so the Palestinians would hope.

– Jamil Salman is an Advocate in training (Corporate/Commercial) in Amman, Jordan and has obtained his L.L.B and L.L.M from the United Kingdom. He contributed this article to PalestineChronicle.com.

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