Palestinians seek observer status at WTO

GENEVA | Still struggling to resume peace talks with Israel, the Palestinian Authority has launched a diplomatic blitz to win observer status at the World Trade Organization.

“We are seeking observer status at the WTO as a preparation for statehood,” Bassim Khoury, Palestinian economy minister, told reporters here ahead of a meeting with the organization’s director general, Pascal Lamy.

The move is part of a broad effort by the Palestinian government, in particular Prime Minister Salam Fayyad, an economist and former International Monetary Fund (IMF) official, to create the institutions of statehood to show the world - and especially Israel - that Palestinians will be ready for independence in the next few years.

The chances for resuming full-scale peace negotiations look bleak, despite a meeting among Israeli Prime Minister Benjamin Netanyahu, Palestinian Authority President Mahmoud Abbas and President Obama at the United Nations last week.

Mr. Netanyahu has refused to suspend construction of Jewish settlements in the West Bank and East Jerusalem, as demanded by Mr. Obama and the Palestinians.

But Israel has taken steps to ease movement for Palestinians within the West Bank and encouraged economic and security progress there. As a result, daily life has improved somewhat for local residents.

Mr. Khoury, a former chief executive of a pharmaceutical company, told a U.N. forum here, “We need to increase the Palestinian private sector’s access to the outside world for trade, access to technology and access to finance in accordance with international rules.

“This need is the foremost reason for the Palestinian bid to join the WTO,” he said.

“The economy is a major focus for the government,” said Mr. Khoury, noting that the WTO move is part of “our plan for statehood in two years.”

He said the Palestinian government would try to have WTO observer status for five years and then apply for full membership.

Membership talks are complex and demanding and can take many years to conclude.

A report on the Palestinian economy by the U.N. Conference on Trade and Development notes that the WTO principles of free trade could serve to guide the resolution of Israeli-Palestinian trade disputes.

Re-anchoring the Palestinian economy on global rules also could help enhance market liberalism, transparency and equity, the U.N. report adds.

Developing nations in Asia, Africa, the Middle East and South America, along with China and the European Union, have signaled that they would support a Palestinian request.

“I don’t think the WTO’s General Council (the agency’s ruling body) will say no to it,” said Debapriya Bhattacharya, until recently Bangladesh’s ambassador to the WTO.

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