An Entangled Economy: The Paris Protocol & The Case of the Palestinian Laborer

  • Middle East Policy

    Middle East Policy has been one of the world’s most cited publications on the region since its inception in 1982, and our Breaking Analysis series makes high-quality, diverse analysis available to a broader audience.

By Enshirah Barakat

Enshirah Barakat received her Bachelor of Arts in Political Science and International Studies with a focus on the Middle East from the University of Florida in December 2022. 

In September 1993, Yasser Arafat and Yitzhak Rabin clasped each other’s hands on the White House lawn, commencing what many hailed as the first steps toward peace in the Middle East. The Palestinian Liberation Organization (PLO) Chairman and the Israeli Prime Minister signed the Declaration of Principles, famously known as the Oslo Accords. As President Bill Clinton mediated this unprecedented alliance, the two representatives pledged to institute limited Palestinian self-governance throughout the Gaza Strip and West Bank. The Accords comprised initiatives to fulfill its objectives, including the Protocol on Economic Relations (PER). Also known as the Paris Protocol, this five-year timetable sought to formalize Israeli-Palestinian economic relations. However, three decades after its signage, the Oslo Accords have restrained Palestinian economic interests, arguably capitalizing on Palestinian labor in Israel’s agricultural and industrial sectors. 

The Paris Protocol’s preamble details its primary goals, recognizing the economic domain as the “cornerstone in [Palestine and Israel’s] mutual relations.” To enrich their interests in a “just, lasting, and comprehensive peace,” the protocol lays the foundations for fortifying Palestine’s economic base by enabling its right to decision-making according to its developmental plan and priorities. Its objectives addressed trade relations, taxation, and monetary matters. The two parties additionally tackled labor issues. They committed to the “normality of movement of labor,” preserving each side’s authority on the magnitude and conditions of such. The protocol mandated Israeli employers to supply Palestinian laborers with adequate health insurance and equitable wages. However, the Paris Protocol’s ambiguous rhetoric did not outline concrete implementation procedures or fully address Israel’s inherent authority over the Palestinian economy. 

Israel sought to tackle the Palestinian issue, the source of economic, political, and demographic threats, by incorporating the two states’ economies together. According to a United Nations Conference on Trade and Development report, Israeli employers preferred Palestinian workers’ skills. Incentivized by higher wages — almost double those earned in Palestinian markets — and an overflow of jobs, Palestinians pursued employment within Israel as a last resort. As Israel restricted the movement of Palestinian resources and citizens, Palestinians became dependent on Israeli demand for labor and regulation of markets. The two thus inadvertently sustained an interdependent yet disproportionate system between an economic powerhouse and second-class citizens.

Israeli businesses collectively employ approximately 130,000 Palestinian workers, not accounting for those without permits. However, Palestinians lack legal protection and support, falling victim to exploitative employers. While Israeli laborers enjoy reasonable pay wages, health insurance, and social benefits, Palestinian workers experience antiquated Jordanian labor laws of substandard pay with no employee benefits. That is not to mention the human rights abuses Palestinian laborers endure during business operations.

Many Middle Eastern nongovernmental organizations and platforms offer a glimpse of the hazards Palestinian workers confront. In a report by the Economy Ministry and the National Insurance Institute surveying the US and 20 EU countries, Israel ranked third to last place in the frequency of construction accidents. In 2019, the Israeli Minister of Labor reported 40 fatalities, 19 workers from the Occupied Palestinian Territories and 14 Palestinian citizens of Israel. Rarely are employees or impacted families offered healthcare assistance and compensation for work-related injuries. According to Israeli nonprofit organization Kav LaOved, Palestinians must personally finance medical and rehabilitation treatments, unlike other laborers in Israel. Injured Palestinian laborers additionally lose their social security, end-of-service pensions, and compensations. Further, Israeli law enforcement grants contractors impunity despite their lack of thorough investigation of workplace safety standards. In 2016, the Israeli State Attorney only investigated 39 of 277 on-site accidents. 

Outside of medical assistance, the State Comptroller observed discrepancies in Israeli employers’ provision of services like “holiday pay, a notice of seniority… reimbursement of travel expenses, convalescence pay, severance compensation, leave pay, and overtime pay.” In 2021, Kav LaOved surveyed 215 workers in the construction sector. 30.2% reported they did not receive a payslip. Among 211 respondents, only 15.6% understood its content, and 93% of all workers’ payslips did not reflect the pay they received. Rami Mahdawi, the director-general of employment at the Palestinian Ministry of Labor, revealed that Palestinian workers lose nearly half of their paychecks to brokers as they attempt to secure work permits. Although the Paris Protocol committed to fair wages and essential social services, numerous Palestinian workers confront wage discrimination and unfair working conditions.

The historic handshake between Arafat and Rabin in September 1993 kindled a flame of optimism that faded through time. A future beyond the protocol’s shortcomings would ensure wages for Palestinian laborers that mirror their Israeli counterparts in the same positions. Israeli employers would remain transparent, accessible, and consistent in payment procedures and healthcare benefits. Local and global communities must extend their tangible support to businesses in the West Bank and Gaza Strip, allowing for its future prosperity and potential job allocations to local citizens. Although the Paris Protocol was wishful in its objectives, a reevaluation of the protocol is necessary to create and implement the infrastructure for fair and safe economic cooperation.

  • Middle East Policy

    Middle East Policy has been one of the world’s most cited publications on the region since its inception in 1982, and our Breaking Analysis series makes high-quality, diverse analysis available to a broader audience.

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