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Trade Options for the Palestinian Economy: Some Orders of Magnitude

World Bank Mid-East & N. Africa Working Paper No. 21

41 Pages Posted: 15 May 2001  

Claus Astrup

World Bank - West Bank and Gaza Resident Mission

Sebastien Dessus

World Bank - West Bank and Gaza Resident Mission

Date Written: February 2001

Abstract

The paper quantitatively assess different options for the future Palestinian trade regime. While acknowledging that restrictions on movements of goods and people have had a negative impact on Palestinian trade performance, the analysis suggests that the current Customs Union has been costly as well. Moving toward a more autonomous trade regime may present advantages if used to reduce import taxes thereby lowering the domestic price of imports. Creating a Free Trade Area with Israel, necessitating a potentially costly implementation of rules of origin, is weighted against implementing a non-discriminatory regime in which West Bank and Gaza renounce to its preferential access to the Israeli market. The analysis is based on simulations of a Computable General Equilibrium model of the Palestinian economy using the Social Accounting Matrix for 1998 as base.

Keywords: West Bank and Gaza, Trade policy, General Equilibrium Models

JEL Classification: D58, F13

Suggested Citation

Astrup, Claus and Dessus, Sebastien, Trade Options for the Palestinian Economy: Some Orders of Magnitude (February 2001). World Bank Mid-East & N. Africa Working Paper No. 21. Available at SSRN: https://ssrn.com/abstract=267832 or http://dx.doi.org/10.2139/ssrn.267832

Claus Astrup

World Bank - West Bank and Gaza Resident Mission ( email )

P.O. BOX 54842
Jerusalem
Israel

Sebastien Dessus (Contact Author)

World Bank - West Bank and Gaza Resident Mission ( email )

P.O. BOX 54842
Jerusalem
Israel
+972 2 236 65 49 (Phone)
+972 2 236 65 43 (Fax)

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