The 27-0 vote by the European Parliament's international trade committee paves the way for full parliamentary approval for a deal later this year, signaling EU support for the Palestinian Authority as it prepares to bid next month for statehood recognition at the United Nations.
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While small – trade between the EU and the West Bank and Gaza was worth €60 million (about $85 million) in 2009, of which just 10% constituted Palestinian exports to the EU – the move nonetheless represents an opportunity for exports to boost an economy weakened by chronic conflict with Israel.
"This deal is enormously important. It gives more power to the Palestinians to trade directly with the EU. And it's a signal of good will from the international community that comes at an important time," said Maria Eleni Koppa, a Greek socialist lawmaker who led the committee's discussion on the issue.
The West Bank and Gaza mostly export vegetables, fruits and cut flowers to the European Union, while the territories import EU machinery, chemicals and transport equipment.
The new deal will give Palestinian exporters unlimited duty-free access to European markets for farm goods and products as well as fresh and processed fish.
"For us this is one of the agreements that will help us build the economy of an independent sovereign state," Majed Bamya, a Palestinian diplomat in Brussels, told Reuters.
The full European Parliament is due to vote on the trade agreement in late September.
Once approved, the deal needs final backing from EU member states and ratification by the Palestinian Authority. It is expected to enter into force before the end of 2011.
Greater opportunities for PA exporters
Europe imposed strict labeling laws on goods arriving from the occupied territories in 2005. But complex laws and the fact that trade is conducted largely through Israeli channels has created lingering concerns that Israeli farm operators may be benefiting from deals designed to aid Palestinians.
"We have been campaigning, especially in European countries, that they should not import from Israel products that are produced in (Jewish) settlements ... and if they want to import anything from settlements then it has to be labeled separately (as settlement produce)," Ghassan Khatib, spokesman for the Palestinian Authority in Ramallah, told Reuters.
Palestinians say that controls by Israel, which occupied the West Bank and Gaza Strip in 1967, restricts their access to export markets, denying them economic opportunity. Israel withdrew from Gaza in 2005 but still occupies the West Bank.
Palestinians have argued that better access to export markets is vital to allowing the Palestinian economy to grow, in turn allowing the Palestinian Authority to ease its dependence on aid from donors including the European Union.
Europe's deal with the Palestinian Authority also forms part of ongoing EU moves to open up trade and investment with the Mediterranean rim along North Africa and the Middle East.
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