The European origins of the Israeli-Palestinian economic union: A genealogical approach

Abstract

The Oslo peace process established a modified economic union between Israel and the Palestinian Authority. Economic unions require extensive collaboration and are generally found between states that enjoy pacific relations and are looking to deepen integration and political ties. The choice of an economic union between these adversaries is puzzling given that the aim of the peace process was to disentangle Israelis and Palestinians by establishing two separate states. Today, after the optimism surrounding the process has faded, it is easy to see the arrangement as a perpetuation of Israeli control over Palestinian life. However, such assessments fail to consider, first, the depth of the negotiations; second, the significant differences between the outcome of the negotiations and what was previously imposed by Israel; and, third, the gap between what was negotiated and what was later implemented. This article traces the genealogy of the economic union by exploring all three factors. While the negotiators did not start with a tabula rasa, they attempted to alter the existing economic arrangement along the European neo-functionalist model of integration. This approach was later largely abandoned, and what followed bore little resemblance to the positive spillover effects in Europe.