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Fri Mar 14 09:08:13 PDT 2008

aim to crack the long-standing boycott of Israel maintained by the majority of 
countries in the Middle East. These bilateral trade accords include a condition 
for countries to recognize Israel.

Apartheid economics is critical to US and Israeli policy in the region, 
implemented through neo-liberal bilateral trade accords, or on the ground in 
Palestine where Israel is pushing a plan to build industrial processing zones. 
Proposed industrial zones will see Israeli corporations' factories operating 
with a Palestinian labor force, similar to maquiladoras, Mexican factories 
which became notorious for human and labor rights abuses in the 1990s.

At the recent US-sponsored summit in Annapolis, joint Israeli-Palestinian 
industrial zone projects were designated as an object of future collaboration 
and a peace-building initiative between Israel and the Palestinian Authority 
(PA). Major industrial zones backed by the World Bank and European Union are 
slated to be constructed in the occupied West Bank.

The proposed industrial projects will see thousands of Palestinians working at 
Israeli-operated factories in closed military zones where labor laws don't 
apply. A grassroots movement against these industrial zones is spreading 
throughout Palestinian society as part of the international boycott, divestment 
and sanctions campaign. Israel's occupation of Palestine and the construction 
of the apartheid wall is a huge burden on the Israeli economy; these industrial 
processing zones are being promoted as economic engines for Israel.

The Grassroots Palestinian Anti-Apartheid Wall Campaign is organizing against 
the establishment of these industrial processing zones. Campaigner Daoud 
Hamoudi spoke with The Electronic Intifada contributor Stefan Christoff on the 
issue of US-driven free trade agreements in the Middle East and the economics 
of apartheid in Palestine.

Stefan Christoff: Can you first speak about the impact on the Palestinian 
economy of the apartheid wall being constructed in the West Bank, and can you 
describe the current status of the wall's construction?

Daoud Hamoudi: In 2002 the Israeli government started building a wall in the 
occupied West Bank. It's a 700-kilometer-long wall that Israel claims is a 
security wall to separate the Palestinians from Israel. However, the path of 
the wall splits Palestinian lands, creating small ghettos, closed ghettos with 
a limited number of exit and entry points that are controlled by Israeli 
military checkpoints. Israel's wall has had many severe impacts on 
Palestinians, including major economic impacts.

Each kilometer of Israel's wall costs an estimated $2.5 million at minimum, 
while there is a great deal of infrastructure, high-tech military equipment 
that additionally lines the wall, costing an estimated $400 million. It has 
been very, very expensive for Israel to build this wall.

After completion, the wall will include an estimated 35 checkpoints that will 
cost additional millions. Given this economic reality, Israel launched a 
parallel economic plan to coincide with the wall's construction, a plan to 
control the Palestinian economy in order to fund the wall's construction. 
Israel's parallel economic plan started in 2005, approved by both the US 
government and the EU; now Israel is attempting to force this economic plan on 
Palestinian society.

Stefan Christoff: I understand you are documenting an economic plan put forward 
by Israel, to compensate for hundreds-of-millions of dollars through siphoning 
money from the Palestinian economy. Can you explain in specifics how this is 

Daoud Hamoudi: For example, there was a proposal from the World Bank in 2005, 
to build between nine and twelve industrial zones throughout the West Bank. 
Each Palestinian ghetto will have two or three industrial zones to which 
Israeli factories will be moved. Palestinians will become the cheap labor force 
for Israeli industry. Also, these industrial zones will be built along the 
border, so they will not be part of Israel or Palestine and the labor force 
will not be officially working in either Israel or Palestine.

Palestinians will be forced to work in areas where Palestinian [and] Israeli 
labor laws don't apply. In this context, if a Palestinian worker has a problem 
with an Israeli factory owner, the worker can't use the Israeli court system or 
Palestinian regulation to address the labor issue.

Also within this proposal, the announced salary for the Palestinian workers 
within the industrial zones will be $300 US a month, a fraction of the minimum 
allowed for Israeli workers inside Israel. For the first time, Israeli industry 
or factory owners are openly talking about competing with Asian productions 
within European and North American markets.

Another example is a project funded by the Japanese government, an 
agro-industrial zone, built on Palestinian land in the West Bank that today has 
become a closed Israeli military zone, in which the agro-industrial areas will 
be launched, based on the same conditions for Palestinian workers proposed in 
the industrial zones.

Stefan Christoff: Can you expand on the examples that you put forward, both the 
agro-industrial zone and the industrial zone project in the West Bank? Could 
you expand on the economic implications for the Palestinian people and 
Palestinian economy?

Daoud Hamoudi: To build any state you need to have an independent economy, 
which in turn fuels national development. Today, if the West Bank became free 
from the Israeli economy, this break would have a major negative impact on the 
Israeli economy, as the Palestinian territories are the second largest market 
for Israel after the US. For example, Israeli gas companies generate around 40 
percent of their income from the West Bank and Gaza markets alone.

Today, Israel is attempting to impose conditions on any future Palestinian 
state, [over] which Israel will continue to control economic trade, [the] 
national economy, the borders, all to secure economic benefits for Israel from 
any future Palestinian state.

A group of economic agreements ... under negotiation since 2005 include the 
establishment of the industrial zones. [The] issue behind this project is the 
fact that, internationally speaking, Israel's labor force maintains extremely 
high standards in relation to international wage standards.

Israel can't compete with industrial production costs in South Asia, Latin 
America or China, including clothing, food and other production. Israel is 
attempting to build the national economy through these industrial zones, 
through moving Israeli factories into these areas, then bringing in cheap 
Palestinian labor to work in slavery-like conditions at the lowest wages 
possible, in order to allow Israeli industry to compete in the world market.

Now these economic projects are promoted as "peace-building" projects 
internationally. These industrial zones will be placed along the border, so 
they will not be considered either Israeli or Palestinian. However, the 
companies operating within the zones will be Israeli companies or 
multi-national corporations, like Turkish or US-based companies.

Israelis will own the factories [and] also will supervise the Palestinian 
workers. Israel will additionally control the export of products created within 
the industrial zones. Estimates project that there will be 40,000 Palestinian 
workers within the industrial zones.

Already land has been confiscated in different Palestinian districts in the 
West Bank to build these industrial zones, which will be funded initially by 
different governments internationally. To explain, one in the north will be 
funded by the German government, one in the northwest of the West Bank will be 
funded by [the US development agency] USAID, one in the south will include 
infrastructure funded by the World Bank and Turkish government and finally one 
in the eastern West Bank will be funded by the Japanese and US governments.

Supporters of this industrial zone project hope that eventually half-a-million 
Palestinian workers will be working in these industrial areas. Again it's 
important to remember that the Palestinian workers will not be working in 
either Israel or a potential Palestinian state, so no labor laws can be 
implemented on these industrial or agro-industrial zones.

Israelis will maintain control [over] the exports over these industrial zones, 
as all the supervisors will be Israeli, so Israel will have total economic 
control over the zones.

Stefan Christoff: Based on your reading of the proposal to establish these 
industrial zones, can you describe the potential conditions for thousands of 
Palestinian workers who would fill this labor vacuum for the industrial zones 
that you have described?

Daoud Hamoudi: First, it's important to recognize that to enter these 
industrial zones you will need a permit from Israeli authorities; if at any 
point in your history you were considered an activist against the Israeli 
occupation of the West Bank and Gaza, you will never receive the permit to 
enter and work at the factories in the industrial zones. So these industrial 
areas will remain under strict Israeli control.

Now looking at Gaza, the area has been a ghetto since 1994, as a wall has been 
surrounding Gaza since that time. Already two industrial zones have been built 
where thousands of Palestinians worked. As the intifada started in 2000, Israel 
simply started closing the entrance to the factories, collectively punishing 
Palestinian workers. Finally in 2004 Israel closed the industrial zones in 

Also it's important to note that the Israeli permits to enter the zones are 
considered tourist visas, not working visas. Now if a Palestinian worker wanted 
to travel to work in Canada, for example, I would need a work visa not a 
tourist visa. In Canada, if I worked while on a tourist visa I would be 
considered an illegal worker -- in the legal sense, a worker without any 

Now within these industrial zones, they are on the border areas, so under 
Israeli law a Palestinian working on a tourist visa within the zones would be 
considered an illegal worker. So in these conditions, the Palestinian workers 
are unable to create a union. If a conflict or dispute happens ... between the 
Palestinian workers and the Israeli factory owners, the Palestinian workers 
would have no recourse within either the Palestinian or Israeli legal system.

No labor rights would exist, no health insurance for workers. If a Palestinian 
worker becomes sick, or is injured within one of these factories, the 
Palestinian would simply be thrown out of the industrial zone without 
compensation or anything.

At this time, these industrial zones are being promoted as peace-building 
projects, which Israel argues the international community should support. Each 
industrial or agro-industrial zone will be funded by international governments 
or international funding agencies, such as USAID.

In promoting these industrial zones as peace-building projects, Israel is 
attempting to ensure support from the European Union and other states around 
the world. Through the free-trade agreements that Israeli maintains 
internationally with different countries in Europe [and] Canada, a market 
exists for the goods that would be produced within these industrial zones by 
Palestinian workers.

Stefan Christoff: Can you talk about the role of the Palestinian Authority in 
the creation of these industrial zones? What has been the position of the PA?

Daoud Hamoudi: [When] the Oslo Agreement was signed and the Paris Protocol, an 
economic agreement that was signed between the Israelis and the PA, Palestinian 
politicians thought that they could really benefit from these projects. So 
throughout the early 1990s the PA promoted such projects internationally, 
including the two industrial zones that were built around Gaza. In the West 
Bank, no industrial projects were built during the Oslo period in the end.

Once the intifada started and the PA was persuaded [by] the grassroots 
[organizations] ... that Israel was offering the Palestinians nothing, most of 
these industrial projects were stopped, while a movement against economic 
cooperation with Israeli spread throughout the Palestinian territories, even up 
to the highest levels of the PA. This movement against economic cooperation 
with Israel also promoted the idea of developing economic alternatives to 
cooperation with Israel for the Palestinians.

This movement continues. In 2004 Israelis began seeking independent economic 
partners within Palestinian society, attempting to negotiate direct agreements 
with different Palestinian businesspeople. Israel targeted the most important 
50 Palestinian businesspeople, attempting to persuade these Palestinians to 
co-launch these industrial zones directly with Israel and without the approval 
of the Palestinian Authority. [The] first step was an Israeli military order to 
confiscate the land from Palestine for the industrial zones, then Israel 
surrounded this territory by the wall and also by checkpoints, then they 
pressured Palestinians to buy these confiscated lands.

The Palestinian Authority managed to block this project in cooperation with 
grassroots organizations and civil society organizations, including ours, which 
was active in this effort. Palestinians managed to block the project [for 
Israelis] to sign direct deals with Palestinian businesspeople.

In 2005 the World Bank managed to re-open debate on the industrial project, 
presenting through research the zones as the only solution for the Palestinian 
economy. Since this time Israel and the World Bank managed to collect funding 
for these projects, mainly from the IMF [International Monetary Fund], USAID, 
the US government, the Japan International Cooperation Agency, the Turkish 
government and the German government.

At the recent summit in Annapolis in the US, these industrial zone projects 
were jointly approved by the PA and Israeli officials, at which time they 
announced that they will attempt to finalize these projects by the end of 2008. 
Now in Palestine, through civil society networks, we are trying to raise the 
level of pressure on the PA to stop all Palestinian cooperation in these 
industrial zone projects, for the PA to cancel the approval they made at 

Stefan Christoff: Can you speak about the grassroots reaction to the PA 
agreement to participate in the establishment of industrial zones in 
collaboration with Israel? On a grassroots level, what are people in Palestine 
saying about these projects?

Daoud Hamoudi: [The] launching of a grassroots campaign took different 
dimensions; a key dimension is rooted in our appeal for boycott, divestment and 
sanctions against Israel, which is led by different organizations world-wide. 
Also, there have been many meetings between activists in Palestine and 
different officials within the PA. Also, we are pushing to include an 
anti-Israel-cooperation position within the mandate for Palestinian trade 
unions for the upcoming five years.

At this point many politicians in Palestine have been persuaded to work against 
the creation of these industrial zones within the framework of the PA. Also at 
[the] grassroots level, we have been organizing demonstrations and events next 
to the locations for the industrial zones and outside of PA buildings in the 
West Bank, led by the people with land confiscated by Israel in order to begin 
establishing these industrial zones. Many efforts are taking place to stop 
these industrial zone projects.

Stefan Christoff: Let's talk about the way that economics is used throughout 
the Middle East to push normalization with Israel. Clearly, the issue of 
economic and political normalization with Israel is contested throughout the 
region. Currently a number of trade agreements are being negotiated between the 
US and different countries in the Middle East, agreements that include points 
of economic normalization with Israel, an issue that gained a great deal of 
attention from Jordan to Bahrain. Can you talk about the regional context?

Daoud Hamoudi: An important point concerning recent history on this issue was a 
presentation made by US President [George W.] Bush at a conference at Columbia 
University in which Bush stated that the US's goal was to have a free trade 
agreement between the Middle East and the US. Also within this address, Bush 
stated that the agreement would be about establishing US political control 
within the Middle East, linking the trade agreements to the US war on terror.

Also Bush stated clearly that this trade strategy involved bring[ing] Israel 
into the Middle East as a fully recognized country, as a Jewish country living 
next to its neighbors in peace. So trade agreements were presented as the path 
for the US push for normalization with Israel. In this same period, Robert 
Zoellick traveled to the Middle East in [his] capacity [as] US Trade 
Representative. In a talk, Zoellick stated clearly that the goal for this 
agreement was to have Israel recognized in the region, as part of the effort to 
combat the Arab boycott of Israel.

As the US started negotiating these agreements, the first countries that they 
targeted were the smallest or weakest countries in the Middle East. In an 
attempt to create an opening in the Arab boycott against Israel, the US 
targeted Jordan, Bahrain [and] Morocco.

At the same time, US Congress representatives announced that the US would 
peruse a free trade agreement with Saudi Arabia only if the monarchy officially 
recognized Israel. In signing these agreements, for example with Jordan, the US 
now allows exports in to the US without taxes if the product included a minimum 
of ten percent Israeli material.

Stefan Christoff: Can you discuss the current situation in Palestine in terms 
of the economic context of Israel's occupation?

Daoud Hamoudi: If you look back to history, it's clear that many colonial 
projects were started for economic reasons and came to an end when the price of 
occupation became higher than the profits gained from the occupation or 
colonization project. For example, in Algeria, the French greatly benefited 
from Algerian agricultural production, especially grapes which were used in the 
French wine production.

British colonization in India was greatly connected to the spice trade and to 
cotton production. Also, British colonization in Egypt was connected to cotton 
production. Each example of colonization in history was connected to economics, 
ending when the human and financial price became higher than the profit the 
colonizers could gain by continuing colonial policies.

Today, Israel's occupation controls all of Palestine's resources, [including] 
water resources [and] tourist resources, as Jerusalem and the West Bank are 
rich in Muslim, Jewish and Christian tourist sites. At the time that Israel's 
occupation began, a central goal was to control the economic resources of 
Palestine. However, today the price of this occupation is becoming higher and 

In examining the current economic situation facing Israel today it's clear that 
the occupation will collapse unless Israel creates new ways to benefit from the 
occupation. In the face of this crisis arrives the industrial zone projects or 
the free trade agreements as a solution.

Robert Zoellick, the US Trade Representative, explained it best at the Doha 
meetings of the World Trade Organization in 2001, [by] saying that the US is 
pushing free trade agreements throughout the global south in order to force the 
US political agenda, which translates in the Middle East to accepting Israel's 
occupation or accepting the US occupation of Iraq.

People throughout the Middle East are attempting to build a movement against 
the economic side of the war. However, unfortunately, the majority of the 
people in the region live under dictatorships, which makes it extremely 
difficult to create the space to build a movement against these economic 

Major demonstrations against these US-driven trade agreements have taken place. 
However, these demonstrations face serious repression. Many social activists 
who have been involved in fighting US trade policies have been arrested, 
detained or interrogated. Despite this, our movement continues: a movement 
against US trade policies throughout the Middle East.

* Stefan Christoff is a member of Tadamon! Montreal and frequent contributor to 
the Electronic Intifada. This interview was originally produced for the 
Fighting FTAs project, an international project that provides a global picture 
on free trade agreements (FTAs), and insight into struggles being waged by 
social movements fighting back.

Fighting FTAs:

Tadamon! Montreal:


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