Countries and regions
An Interim Association Agreement on Trade and Cooperation was concluded between the EU and the Palestine Liberation Organisation (PLO) on behalf of the Palestinian Authority in 1997. The agreement provides for duty-free access to EU markets for Palestinian industrial goods, and a phase-out of tariffs on EU exports to Palestine over five years. An Agreement for further liberalisation of agricultural products, processed agricultural products and fish and fishery products entered into force on 1 January 2012.
- Due to difficult economic situation and restrictions on movement and access, trade with the EU is very limited (210 million euros in 2015).
- Imports from Palestine to the EU are very low, only 14 million euros in 2015. They consist mainly of agricultural products and raw materials, and also articles of stone, plaster and cement. About 80% of EU imports of Palestinian goods consist of agricultural products, 15% of chemicals, mainly pharmaceuticals.
- EU exports to Palestine are composed mainly of machinery and transport equipment as well as chemicals.
EU-Occupied Palestinian Territory: Trade in goods
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EU-Occupied Palestinian Territory: Trade in services
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EU-Occupied Palestinian Territory: Foreign direct investment
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EU and Palestine
Trading with the EU
- The EU believes that greater trade with Europe can offer a potential source of economic growth and stability for Palestine. The EU works closely with Israel and other Southern Mediterranean partners in an effort to improve Palestinian access to international markets.
The European Neighbourhood Policy is part of the European Union’s response to the Palestinian Authority’s political and economic reform agenda.
Palestinian participation in the European Neighbourhood Policy takes place in the context of the overall political situation in the region which affects the scope of actions that can be feasibly undertaken. There are a number of constraints and limitations resulting from the
on-going Israeli-Palestinian conflict and the continuing occupation, including settlement activity, restrictions to movement as a result of the closure policy and the separation barrier.
The European Union is the biggest donor of financial assistance to Palestine.
Palestine in Euromed
Palestine is one of the partners in the Euro-Mediterranean Partnership that promotes economic integration and democratic reform across 16 neighbours to the EU's south in North Africa and the Middle East. One important part of this work is to achieve mutually satisfactory trading terms for the Euromed region's partners.
The difficult nature of relations between Israel and the Palestinian Authority makes it hard for Palestine to achieve greater economic integration with their neighbors or the EU.
Economic relations between the Palestinian Authority and Israel are formally managed according to the Paris Protocol (1994), which allows the Palestinian Authority to establish trade relations with third countries, provided that such agreements do not deviate from Israel's import policy.
The Palestinian Authority has signaled their intention to implement the Pan-Euro-Mediterranean system of cumulation of origin which will allow them to re-export processed goods from other countries while maintaining preferential access to the EU market. To this end, the Palestinian Authority is participating in the negotiations on a single regional convention on preferential rules of origin for the Pan-Euro-Mediterranean area.
Products originating in the Israeli settlements in Palestine (the West-Bank, Gaza Strip, East Jerusalem and the Golan Heights) are not entitled to benefit from preferential tariff treatment under the EU-Israel Association Agreement.
Trading with Palestine
- Rules and requirements for trading with Palestine
- Importing into the EU from Palestine
- EU trade defence measures on imports from Palestine
- Exporting from the EU to Palestine
- Trade relations are part of the EU's overall political and economic relations with Palestine.
- The Palestinian Authority has applied to be an observer at the World Trade Organisation.
For more information on the EU's technical assistance programmes to Palestine and European Neighbourhood Policy Instrument projects visit the website of the EU Technical Assistance Office in Jerusalem.
- This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual positions of EU Member States on this issue