Efforts to diversify the Palestinian economy and develop the trade sector are undermined by prohibitive transaction costs, which erode the competitive edge of Palestinian exports and therefore pose trade barriers of greater significance than import tariffs.
This is particularly the case in view of the occupied Palestinian territory´s landlocked status, which restricts the enterprises´ participation in international trade to their ability to use neighbouring overland and maritime transport facilities in Israel, Jordan and Egypt.
Notwithstanding the lack of adequate physical infrastructures, Palestinian merchandise trade is obstructed by the absence of coordination mechanisms in the subregion with regard to transport and customs clearance. Active coordination mechanisms between the Palestinian Authority and its immediate neighbours are either nonexistent or translate into complex procedures entailing several institutions and exhaustive documentation requirements.
This not only undermines the possibility of exploiting existing and future trade agreements, but also discourages investment in productive sectors. Indeed, Palestinian preferential and free trade agreements with regional and international partners remain largely unexploited due to prohibitive maritime and overland transport costs.
Technical assistance projects under this programme cluster seek to support Palestinian trade facilitation efforts, with strategic frameworks, automated systems and streamlined procedures that incorporate internationally recognized standards and best practices.