Economic Policy. The Goals and Instruments of Economic Policy.
ECONOMIC POLICY PROGRAMME
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Transcript of ECONOMIC POLICY PROGRAMME
May 2005 Economic Policy Programme 1
ECONOMIC POLICY PROGRAMME
TOWARDS AN ECONOMICALLY-VIABLE PALESTINIAN STATE:
The Regulation of External Trade
Monday May 23, 2005Grand Park Hotel, Ramallah
May 2005 Economic Policy Programme 2
Towards a Sovereign Trade Framework: Border Regime
Tom Hughman
May 2005 Economic Policy Programme 3
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.
May 2005 Economic Policy Programme 4
Continuing Assumptions
• NDTP on statehood• Contiguous border• Sovereign corridors / `Safe Passage`• Early membership of WTO & WCO
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NDTP + SECTORAL
AGREEMENTSBlocks `A`
NDTP + SECTORAL
AGREEMENTS
FTABlocks `C`
NDTP ONLY
D
NDTP ONLY
NDTP + FTA MINUS
TRANSITION TO STATEHOOD
POST STATEHOODDAY ONE
= Path based on assumptions provided by PA for EPPIII = Decision Point
CRITICAL PATH
TRANSITION TO DECISION PHASE
TRANSITION TO WTO MEMBERSHIP AND BEYOND
MEMBERSHIP
PARIS PROTOCOL D
D
D
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Trade Policy Choice
• Irrespective of trade policy responsibilities of Customs greatly extended on Day 1 Statehood
• Develop from audit-based monitoring role to direct responsibility for financial and physical clearance at the customs frontier
• Greatest challenge is following a strategy to create and implement minimum standards of operation
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Continuing the Customs Union• PA / EPP assumptions focus on NDTP & FTA • Limited comment regarding the existing quasi
Customs Union (CU) or a full CU with Israel• Much of procedural change, institutional
development and reform strategy are similar• Key differences relate to levels of co-operation and
amount and location of resources• Considering both Customs and other border
related controls.
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Statistics and Trade Policy
• Increase in the number of formal Customs declarations from current levels:– Full import declarations = 35,000– Simplified VAT declarations = 110,000
• Under NDTP the number of full declarations will increase to 145,000 (400%)
• Even under an FTA same number of declarations – although format might be simpler
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Strategy and Planning
• Supporting legislation (Customs Act)• Institutional capacity building • Building border infrastructure• WCO membership• Transit & Safe Passage• Jerusalem• Agreements with Israel
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Legislation – Customs Act
• Provides legal basis for the administration and enforcement of customs operations
• Replaces the Paris Protocol• Ministry of Finance in 2002 requested GTZ,
to assist with drafting • Created in parallel to FTAP• Legislation to reflect international standards
and complement the FTAP• Draft reportedly submitted by GTZ in late
2003
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Customs Administration• Need to develop straightforward and efficient
customs operations• In 2002 / 3 EPP examined implications for
customs development under NDTP or FTA• Identified minimum customs institutional
requirements - `international best practice`• Suggested strategies how new roles and
responsibilities might be managed• Provided likely timescales and work plan for
the transitional period to statehood
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Development Strategy• Study submitted to MNE & MOF in April 2003• Subsequently used as a strategic planning tool by
Customs Department • Shared with the World Bank in Summer 2003• Period of 4 years to develop and implement required
procedures and infrastructure• Timescale conditional on:
– agreed programme of development– local commitment– government support– provision of major donor investment
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Border Regimes and Infrastructure
• Need to develop border clearance infrastructure as soon as practicable
• If no agreed border line – consider placing facilities near the perceived border line to allow immediate commencement of development
• Development stage of 4 years is likely to form the `critical path` in any strategic planning
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Agreement with Israel
• Agreements with Israel to facilitate trade through customs cooperation involving – exchanges of information– development programmes to fight cross
border crime– simplification of procedures– establishment of joint committees to
oversee /monitor the agreements
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Further Agreement with Israel
Under FTA better political and economic relations should allow– enhanced levels of cross-border
co-operation– Increased negotiated agreement – a greater sharing of operational intelligence– longer term possibilities for shared border
control facilities
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Transit - Priorities• Priority to be given to development of transit
agreements with neighbours (including Israel)• Required to secure access of goods to the
Palestinian territory • Need to be in accordance with pertinent
international standards and agreements• Consider becoming a contracting party to the
TIR Convention at the earliest opportunity• Liaise with the International Road Union (IRU)
regarding preparations for accession to TIR
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Safe Passage• West Bank and Gaza Strip to be considered
legally contiguous
• Principles of sovereignty to be agreed
• Movement of goods, people, and transport between the territories not “traffic in transit”
• Agree that routes will not:– Disrupt Israeli transportation and other
infrastructural networks– Endanger the environment, public safety or public
health
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Jerusalem - Principles
• PA / EPP work assumes mutually recognised sovereign capitals in East & West Jerusalem respectively
• Trade policy and associated border regime account for specific needs of Jerusalem
• Jerusalem assumed to be an Open City where goods and people circulate freely
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Jerusalem - Approach• Many functions need to be undertaken by a
joint municipal structure• Special control mechanisms need to be
employed– labeling of goods destined for consumption in the
city – statistical control of goods entering and leaving
Jerusalem– number plate readers to monitor the flow of traffic
and trade– audit-based customs controls to provide a ‘light
touch’
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WCO Principles• Principles contain international best practices
for Customs activities• Minimum operating standards within the
Kyoto Convention.• WCO would provide guidance, support and
an international forum• Currently criteria not met for WCO
observership and accession• WCO internal guidelines hinge on “the
absence of any obvious geopolitical sensitivities”
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WCO Membership• Once `sensitivities` subside Palestine to
request invitation to attend WCO meetings• Become an official `Observer`• Meanwhile consolidate position by;
– expressing an interest in the work of the WCO– aligning Customs development to WCO principles
and Kyoto standards.• Whilst negotiating full WCO Membership
status of `Observer` will continue• Transition to full membership on becoming
an independent customs territory
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ECONOMIC POLICY PROGRAMME
TOWARDS AN ECONOMICALLY-VIABLE PALESTINIAN STATE:
The Regulation of External Trade
Monday May 23, 2005Grand Park Hotel, Ramallah