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Abstract
At present, the trade regime and trade patterns of West Bank and Gaza Strip are outgrowths of agreements with Israel and other trade partners, the Israeli control of borders, and autonomous actions taken by the Palestinian Authority. Indeed, officially, the current trade regime of West Bank and Gaza Strip is almost exactly the same as that of Israel. From 1967 until early 1994—a period essentially of military occupation—the West Bank and Gaza Strip was in a customs union with Israel, and the trade pattern of West Bank and Gaza Strip became highly oriented toward Israel. The April 1994 Protocol of Economic Relations between the PLO and Israel yielded a framework for the trade regime of West Bank and Gaza Strip, providing the Palestinian Authority with some options to modify the prevailing customs union. However, this envis-aged trade regime has not become reality; obstacles to trade have intensified, owing primarily to Israeli security procedures. These procedures have resulted in cumbersome administrative and logistical trade barriers, and in attempts by the Palestinian Authority to overcome some of these barriers through policies that may themselves have adverse resource allocation consequences to the Palestinian economy.
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