The Clinton administration plans to extend duty-free treatment to all imports
from the Palestinian-controlled West Bank and Gaza, and would receive the same treatment for U.S. exports to those newly independent areas.
A story on Page 5A of the Oct. 13 Journal of Commerce incorrectly reported that the United States had failed to reach a reciprocal agreement with West Bank and Gaza that would guarantee free access for U.S. exports. The administration had never sought a formal free-trade pact with the West Bank and Gaza, which have not been recognized by the United States as independent states.Instead, the two governments are expected to agree to make free-trade commitments to each other during a visit to the Middle East next week by U.S. Trade Representative Mickey Kantor.
Mr. Kantor has been the driving force behind the expansion of free trade in the region, building on the 1985 U.S.-Israel Free Trade Agreement. The idea behind this push is that the promise of preferred access for exports to the United States will provide an incentive for Arab states to sign comprehensive peace agreements with Israel.
Along with the promise of credit from U.S.-affiliated banks, Mr. Kantor has said that he hopes free trade will help be the "glue" that holds together the peace process.
This strategic goal is a departure from the argument that Mr. Kantor has used to push for free-trade agreements with Mexico and other countries. In those cases, Mr. Kantor asserts that free trade will be of direct benefit to the U.S. economy by generating export jobs.
Few predict that the desperately poor West Bank and Gaza will be much of a market for U.S. goods any time soon. On the other hand, preferred access to the U.S. market could spur industrial investment there, especially from Israeli manufacturers that now bring in low-wage Palestinian day laborers, a concern for Israelis worried about terrorist attacks from Muslim fundamentalists.