Lapid reopens Israeli-Palestinian economic committee

Exclusive i24 report notes that the Joint Economic Committee hasn’t met since 2009.

By Batya Jerenberg, World Israel News

Interim Prime Minister Yair Lapid is reopening a committee that regulates economic relations with the Palestinian Authority (PA), i24 News reported Monday. The committee has remained dormant since 2009

Regional Cooperation Minister Esawi Frej confirmed to the media outlet that he would be meeting with the PA’s economy minister to schedule the resumption of the committee’s work for some time in the next two months.

While some of its aspects still remain under the responsibility of the Ministry of Finance, the Regional Cooperation Ministry is the main address for this department. Frej declared upon entering office last year that the committee would resume operations in order to help the Palestinian economy.

This included, among other things, plans to add some 17,000 permits for workers in the construction and manufacturing field and regulating the Palestinian Fuel Authority in order to reduce the price of the vital commodity in the PA.

In addition, the ministry wanted to develop ties and cooperation in civilian areas such as health, environmental protection, and trade. Although some joint meetings were held on these civilian issues during former prime minister Naftali Bennett’s tenure, they were not heavily promoted.

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Now that Lapid is holding the reins of government at least for the next several months, he is seemingly interested in making progress in relations with the PA, as a matter of his  political (left of center) beliefs and possibly as another gesture to the Biden administration.

Under his leadership, Israel announced several concessions to the Palestinians within the framework of the U.S. president’s visit to Israel last week.

The Joint Economic Committee (JEC) was established within the framework of the 1995 Oslo II Accords’ Appendix 5, called the “Paris Protocol.” This agreement regulates the interaction between Israel and the PA in six major areas: customs, taxes, labor, agriculture, industry and tourism.

The most important part is the tax issue. Israel collects and transfers to the PA both the import taxes on goods and services brought into the Authority and the income tax from Palestinians employed in Israel. Tax clearance accounts for a majority of the PA’s income.

To try and discourage PA financial support of jailed terrorists and the families of those killed when attacking Israelis, the Knesset passed the so-called “Pay for Slay” law in July 2018 to deduct that amount from the taxes and tariffs Israel collects for the PA.

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Last July, Israel withheld NIS597 million, although the government then “loaned” most of the amount back to help avert what the PA claimed would be its economic collapse.