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UNCLAS SECTION 01 OF 03 STATE 099831 
 
SENSITIVE BUT UNCLASSIFIED 
SIPDIS 
AMCONSUL JERUSALEM FOR CONGEN 
GENEVA FOR USTR/DSHARK 
 
E.O. 12958: N/A 
TAGS: ETRD USTR WTRO ECON PREL KWBG IS
SUBJECT: PA INTEREST IN WTO OBSERVER STATUS 
 
Reftel: Jerusalem 1607 
 
 
¶1.  (SBU) Summary and Action Requested, for Tel Aviv, 
Jerusalem, and USTR/Geneva:  Drawing on the points and 
background below, please respond to requests from host 
government and others for the U.S. position on efforts 
by the Palestinian Authority (PA) to secure full 
observer status in the General Council of the World 
Trade Organization (WTO) and subsidiary bodies.  The 
request for full observer status raises a number of 
complex political and legal issues, including questions 
about PA capacity and control over external commercial 
relations.  The USG is determined, however, to continue 
to seek ways to provide the PA with technical assistance 
and informal consultations to build the capacity and 
institutions necessary to support a future bid for 
accession.  In addition, the United States would support 
inviting the PA to attend the upcoming WTO Ministerial 
as an observer. 
 
¶2.  (SBU) For USTR/Geneva only:  Talking points below 
may be used in contacts with the PA/PLO and with other 
delegations when requesting their views and reporting 
back to Washington.   Please confirm our support for 
extension of an invitation to the PLO to observe the 
upcoming Ministerial Conference and for further informal 
consultations that will assist the PA in in its 
institution-building efforts.  End Summary and Action 
Requested. 
 
¶3.  (SBU) Background:  We understand that the 
Palestinian Authority (PA) intends to submit a request 
for full observer status in the WTO for consideration at 
the October 20-21 General Council meeting.  The PA 
announced its request formally before the diplomatic 
community on September 15 in Ramallah, and PA 
representatives are in Geneva the week of September 21 
to promote its proposal. (reftel) 
 
¶4.  (SBU) According to reftel, the PAs argument for 
full observer status is that (1) the Paris Protocol 
recognizes the PA as a separate customs territory and 
grants it broad autonomy to conduct trade policy, and 
(2) the PA is in the process of establishing the 
institutions of statehood and that the process of 
accession to the WTO as a separate customs territory 
will hasten, while not presuppose, its integration into 
the WTO rule-based system as a state. 
 
¶5.  (SBU) We appreciate the PA desire to seek closer 
association with the WTO, and we have supported the 
previous participation of representatives of the PA in 
WTO technical assistance projects to that end.  As 
possible, we have promoted technical assistance to the 
PA that prepares it for complying with WTO provisions 
and supports the best practices found in the global 
trading system.  We support inviting the PA to 
participate as an observer to the upcoming Seventh 
Ministerial Conference of the WTO to be held in Geneva 
in late November in the same status that it attended the 
previous Ministerial in 2005 in Hong Kong. 
 
¶6.  (SBU) Full observer status in the WTO, however, is 
intended to prepare states and separate customs 
territories to initiate negotiations for WTO membership 
within five years of requesting observership (see 
paragraphs 3-4 of Annex 2 to the Rules of Procedure for 
Sessions of the Ministerial Conference and Meetings of 
the General Council, WTO Document WT/L/161).  Under the 
Agreement Establishing the WTO, negotiations may be 
 
STATE 00099831  002 OF 003 
 
 
initiated only by States and separate customs 
territor[ies] possessing full autonomy in the conduct of 
its external commercial relations and other matters 
provided for in this Agreement and the Multilateral 
Trade Agreements. 
 
 
¶7. (SBU) There currently is no state of Palestine. 
Therefore, according to WTO rules, in order to be 
capable of initiating accession negotiations and thereby 
be eligible for observer status, the territory 
represented by the PA must be a "separate customs 
territory possessing full autonomy in the conduct of its 
external commercial relations and other matters provided 
for in this Agreement and the Multilateral Trade 
Agreements."  The basis for the PA trade regime, and the 
foundation upon which it currently operates, is Annex IV 
to the Gaza-Jericho Agreement (also known as the Paris 
Protocol).  Rather than evidencing the requisite 
autonomy, however, the Paris Protocol appears to confirm 
that the territory represented by the PA lacks such 
autonomy.  For example, full autonomy appears to be 
lacking in the following areas: customs tariffs and 
procedures for ALL goods; import licensing; standards 
and technical regulations; sanitary and phytosanitary 
measures (see Paris Protocol, paragraphs 10, 11, and 16 
of Article III; paragraph 6 of Article VIII).  Based on 
these issues it would be difficult to argue definitively 
that the PA is a separate customs territory.  A similar 
conclusion was reached when the PA sought observer 
status in the World Customs Organization in June 2009. 
In addition, it is unlikely that Israel would support 
WTO membership or observer status for the PA at this 
time.  We are encouraging the PA to engage in direct 
bilateral discussions with Israel about its accession 
efforts. 
 
¶8.  (SBU) Therefore, the PAs proposed request for full 
observer status appears premature on technical grounds. 
However, we still are developing a final policy position 
in response to the PAs application, which we will 
convey separately.   The USG wishes to promote necessary 
economic reforms and help lay the groundwork for longer- 
term policy objectives that will help the PA expand its 
trade.  In this regard, we look forward to working with 
the PA, the WTO Secretariat, and other WTO Members to 
prepare for a closer WTO association for the PA as it 
develops its trade regime. 
 
¶9.  (SBU) SUGGESTED TALKING POINTS: 
 
-We have had extensive interagency discussions in 
Washington over the past few days regarding your 
application for full observer status in the WTO. 
 
-Based on our understanding of the WTO rules 
governing membership, I am concerned that we will 
not be able to give your team the support that it 
is seeking at this time.  Further, I am not 
convinced that we will be ready by the General 
Council meeting in October. 
 
-However, we do not want to discourage your 
institution-building efforts. 
 
-We are committed to help you build your trade 
capacity.  Instead of pursuing observership in 
Geneva now, we recommend that your team work 
closely with USTR to develop a plan for technical 
assistance that supports your agenda, and chart a 
course for future observership and application for 
membership that we can get behind. 
 
-If you agree, we will help connect you with the 
appropriate experts at USTR.   We will also be able 
to support your request for observer status at the 
 
STATE 00099831  003 OF 003 
 
 
WTO Ministerial Conference November 30 -December 2. 
 
 
End Suggested Talking Points. 
CLINTON