flag Palestine Palestine: Trade Profile

Foreign Trade in Figures

Palestine is open to foreign trade, but its relative share in the economy has declined since the early 2000s as the country gradually lost access to international markets. Trade represented 69% of GDP in 2019 (World Bank). Palestine mainly exports limestone, marble, scrap iron and olive oil; whereas energy and petroleum oils are by far the largest item of imports (Coface). In fact, the country imports nearly all of its electricity from Israel along with gas and oil, which also go through Israeli customs.

Israel is by the far the largest trading partner of Palestine, both for imports (more than 50%) and exports (more than 80%). However, Palestine has a structural trade deficit with Israel as its exports are mainly of low value. Arab countries, namely Jordan, Turkey, and the United Arab Emirates are among other top destinations for Palestinian exports. Turkey is the second supplier of goods, followed by China, Jordan and Egypt (data OEC). The government's economic and trade policies focus on exports, which are restrained by Israeli blockades, particularly for those from Gaza. Customs tariffs are comparatively low. A licence is required in order to import goods into the West Bank and Gaza. However, no licence is required for export companies, with the exception of foodstuffs, chemicals, and agricultural products. The Palestinian economy is engaged in a regional and international integration process. Palestine has signed free trade agreements and business association agreements with the European Union, the United States, Egypt, Russia, Saudi Arabia, Turkey, and GAFTA, among other countries. The Palestinian Investment Promotion Agency (PIPA) included several sectors in its National Export Strategy: Stone and marble; tourism; agriculture, including olive oil, fresh fruits, vegetables, and herbs; food and beverage, including agro-processed meat; textiles and garments; manufacturing, including furniture and pharmaceuticals; information and communication technology (ICT); and renewable energy.
 
The tense political situation, the restrictions on the movement of goods and the blockade imposed on Gaza are among the key barriers to trade. Palestine has a structural trade deficit: according to figures from the Palestinian Central Bureau of Statistics, in 2020 the country exported USD 1.05 billion worth of goods, while imports totalled USD 6.06 billion; thus resulting in a trade deficit of USD 5 billion. Export of services with Israel stood at USD 205 million, against USD 180 million of imports.

 

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Commercial Policy

International Economic Cooperation
Palestine has signed Free-Trade Agreements with the USA, Canada, and enjoys a Preferential Trading Treatment with the Arab World. Palestine is also part of the Greater Arab Free Trade Area(GAFTA), a pact of the Arab League entered into force in January 2005 which aims to form an Arabic free trade area.
Assessment of Commercial Policy
Palestine and the WTO
Average Customs Duty (Excluding Agricultural Products)
 
 
 
 

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Latest Update: May 2022