The economy of Palestine is small and fragmented. Palestine has a very large trade deficit with an external trade concentrated with Israel (almost 90 %), placing an enormous strain on its overall economic and increasing its vulnerability to external shocks. Palestinian exports face important challenges. The limited supply capacity, the restrictions on people’s freedom of movement coupled with heavy border controls and administrative procedures represent major bottlenecks affecting both export logistics and the competitiveness of Palestinian exporters.
The State of Palestine has a number of bilateral trade agreements in place with the United States, Canada, the EU, the Arab States, Russia, Turkey, and Israel which offer good opportunities to increase and expand trade and benefit from diversification of its export markets. However, Palestinian SMEs cannot translate the opportunities offered by such trade agreements into business transactions.
In its drive to support the Palestinian people, the UN General Assembly voted in Nov. 2012 to upgrade the status of the Palestinian Authority to that of a “non-member observer state” and declared 2014, a year of solidarity with the people of Palestine. At the same time, Palestine is attempting to have an observer status in the WTO
ITC has been very active in Palestine in the recent years and has contributed, among other things, to strengthening the capacities of the Palestinian TPO, Palestine Trade Centre, to develop a survey on Non-Tariffs Barriers and assisted the government to prepare a National Export Strategy. ITC recently launched a joint project with UNDP to support Palestinian women businesses to reach the regional and international markets.