Abbas calls for economic agreement with Israel to be amended

The PA is ‘on the verge of collapse,’ says Palestinian president, declaring the need for a constitution

Elhanan Miller is the former Arab affairs reporter for The Times of Israel

Palestinian President Mahmoud Abbas speaks with members of the media in the West Bank city of Ramallah on December 5, 2012. (photo credit: Issam Rimawi/Flash90)
Palestinian President Mahmoud Abbas speaks with members of the media in the West Bank city of Ramallah on December 5, 2012. (photo credit: Issam Rimawi/Flash90)

Citing the sorry financial state of the Palestinian Authority, President Mahmoud Abbas called over the weekend for financial ties between Ramallah and Jerusalem to be amended to be more fair toward Palestinians.

The Paris Protocol, the financial agreement governing economic ties between Israel and the PA signed as an appendix to the Oslo Peace Accords, has come under criticism on the Palestinian street in past months for stymieing the local economy and binding it too tightly to Israel’s.

Abbas’s statement came days after Israel said it would withhold tax revenues to the PA as punishment for the UN vote last month that upgraded the Palestinians’ status to nonmember observer state.

“We will be more determined to modify this protocol, which will give us back our stolen rights,” Abbas told Palestinian TV on Saturday, calling a number of clauses in the agreement unfair to the Palestinian side.

Speaking at a meeting on the Arab peace initiative in the Qatari capital Doha on Sunday, Abbas hinted that the Palestinian Authority may change its policy of nonviolent opposition to Israel if building began in the E1 area east of Jerusalem and if Israel continued to withhold Palestinian tax money collected for the PA.

Signed in April 1994, the protocol specifies the products authorized for import by the Palestinian Authority and ties the Palestinian value added tax rate to that of Israel, currently at 17%. The protocol also sets a customs union between Israel and the PA.

Ephraim Lavie, director of the Tami Steinmetz Center for Peace Research at Tel Aviv University, said that by threatening to amend the Paris Protocol Abbas was likely trying to signal to his own public that the Palestinian standing has changed following its acceptance by the UN as a non-member state.

“This is not a real threat to take unilateral acts that will ‘break the rules’ with Israel,” Lavie told The Times of Israel. “Both sides, and especially the Palestinians, are well aware that their interests demand coordination on economic issues, just like security issues. They cannot take unilateral steps that may undermine current stability.”

Abbas told the Doha conference the PA was “on the verge of collapse” due to the protocol’s financial pitfalls, and asked for financial backing.

“We are in a collapsing state now. We can’t pay our salaries. So you have to offer this safety net. Do you agree, are you committed and how much will you pledge?” he told Arab League delegates. “We have to know your position soon.”

He added that the Palestinians might take action against Israel or the US for withholding the funds of settlement construction.

“If Israel and America continue to withhold the funds and if the building plan in E1 is ratified, we will have a different position, because that could destroy the Palestinian project,” Abbas told the audience, the Palestinian Ma’an news agency reported.

Abbas also stressed the need for a Palestinian constitution, saying that a draft was already being prepared. He said that once the drafting process is finished, the constitution will be declared publicly.

The speech coincided with the 25-year anniversary celebration of rival movement Hamas in the Gaza Strip on Saturday. Though the groups have been making overtures toward unity, both sides have tried to maneuver for greater power lately, the PA with a statehood bid and Hamas via Gaza’s eight-day mini-war with Israel last month.

The Associated Press contributed to this report.

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