03 October 2011
The Palestinians’ first step after submitting a historic demand for an independent state to the United Nations was a call to amend the Paris Protocols. The Protocols constitute the economic agreements embedded in the Oslo Accords which govern the financial relations and mutual obligations outlined in the 1995 Interim Agreement between Israel and the Palestinian Authority. The Protocols boil down to the simple fact that Israel and the Palestinian Authority are to share a customs framework, to have no economic boundaries, and for Israel to control and police all border crossings. Any change to the Protocols would undermine the very fabric of the Oslo Accords.

The Palestinians have never been happy with the Protocols. They have consistently claimed that they reinforced Israeli economic hegemony over the Palestinian economy and have worked tirelessly to amend the agreement so as to wrestle control over the border crossings from the Israelis. Israel has always rejected these demands, arguing that a breach of the customs border would expose Israel to the dangers of dumping.

However, in addition to economic repercussions, the PLO’s current demand to alter the Protocols also has a political and, – as far as Israel is concerned – a security aspect. Aside from the protection of its economy, Israel is worried it will not be able secure its borders, which is the main reason it has been demanding to keep security forces present along the Jordan River as part of any future peace agreement with the Palestinians. The adverse developments along the Philadelphi route between Gaza and Egypt have so far provided Israel with strong argumentation to explain why it cannot permit the same scenario to develop along the Jordanian border.

Palestinian control over the economic questions and the border crossings would challenge another key Israeli point of contention with the Palestinians. Should the Palestinians erect customs stations on the border with Israel, they will de facto create a border of their choosing and impose the indefensible 1967 lines on Israel.

At the same time, the Palestinians may use the Protocols to wreak havoc on Israel’s economy and advance their campaign of de-legitimization against Israel. In an interview with the Maan News agency last week, Dr. Sabri Saidam, an advisor to Mahmoud Abbas, exposed a far-reaching scheme to exploit the issue of Israeli control over the Palestinian economy in order to organize a world-wide boycott on Israeli products using Facebook. Until now, the Palestinian boycott has been restricted to products made in the settlements only. It was argued that the settlements were "illegal" and even "criminal" and competed unfairly with Palestinian products. The new argument maintains that Israel as state is blocking the development of an independent Palestinian economy and should be punished accordingly.

Still, the Palestinians are talking in terms of "changes" and not the "abrogation" of the Protocols. Actual "abrogation" may have international political repercussions on the Palestinians’ statehood bid as it will present the nascent state as a country that do not respect its international obligations, as specified in Mahmoud Abbas’ application letter to UN Secretary General Ban Ki-moon. In addition, the Palestinians cannot afford to abrogate the Protocols because they do not enjoy a sustainable economy that is separate from the State of Israel. In fact, the Palestinians rely heavily on the Protocols for their revenues. Palestinian websites reported last week that Nabil Sha'at, another close advisor to Mahmoud Abbas, demanded that 150,000 Palestinians resume work in Israel proper as provided in the Protocols. Politically, the establishment of customs points along the 1967 would spell internal disaster for the Palestinians. Hamas’ government in Gaza would not accept a big financial change imposed by Ramallah, despite the recent reconciliation between Fatah and Hamas, as it has not even managed to compromise on the seemingly unimportant issue of daylight savings time, which has left the two sides in different time zones.

It is in Israel’s interest that the Palestinians enjoy a thriving economy, whether or not it is tightly connected to its own. It is another issue altogether if the Palestinians care more about waging lawfare and boycotts against it, cynically using the economy and international agreements to attain their goals.