Palestine: Trade Profile

Foreign Trade in Figures

Palestine is open to foreign trade, but its relative share in the economy has declined since the early 2000s as the country gradually lost access to international markets. Palestine mainly exports articles of stone (limestone, marble – 13.3%), furniture (11.7%), plastics (10.2%) and iron and steel (9.1%); whereas imports are led by mineral fuels and oils (16.3% - the country imports nearly all of its electricity from Israel along with gas and oil, which also go through Israeli customs), electrical machinery and equipment (6.2%), residues and waste from the food industries (5.8%), and vehicles (4.9% - data ITC, 2021).

Israel is by far the largest trading partner of Palestine, both for imports (53.1% of the total in 2021) and exports (86.1%). However, Palestine has a structural trade deficit with Israel as its exports are mainly of low value. In 2021, Jordan (5.1%), the UAE (1.5%), and the U.S. (1.1%) were the other main export destinations; whereas imports came chiefly from Turkey (10.3%), China (6.8%), and Jordan (3.3% - data Comtrade, 2021). The government's economic and trade policies focus on exports, which are restrained by Israeli blockades, particularly for those from Gaza. Customs tariffs are comparatively low. A licence is required in order to import goods into the West Bank and Gaza. However, no licence is required for export companies, with the exception of foodstuffs, chemicals, and agricultural products. The Palestinian economy is engaged in a regional and international integration process. Palestine has signed free trade agreements and business association agreements with the European Union, the United States, Egypt, Russia, Turkey, and GAFTA, among other countries. In recent years, Palestine has sought to diversify its trade relations and reduce its dependence on Israel. It has signed trade agreements with several countries in the region, including Saudi Arabia, Qatar, and the United Arab Emirates, and has sought to develop new trade routes through the Mediterranean Sea and through Jordan. The Palestinian Investment Promotion Agency (PIPA) included several sectors in its National Export Strategy: stone and marble; tourism; agriculture, including olive oil, fresh fruits, vegetables, and herbs; food and beverage, including agro-processed meat; textiles and garments; manufacturing, including furniture and pharmaceuticals; information and communication technology (ICT); and renewable energy.

The tense political situation, the restrictions on the movement of goods and the blockade imposed on Gaza are among the key barriers to trade. Palestine has a structural trade deficit: according to figures from the Palestinian Central Bureau of Statistics, in 2022 the country exported USD 1.58 billion worth of goods, while imports totalled USD 8.19 billion (+8.6% and +27.6% year-on-year, respectively) resulting in a trade deficit of USD 6.61 billion. Israel accounted for 88% of total exports and 56.5% of imports.

Main Partner Countries

Source: Comtrade, Latest Available Data

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Main Services

Source: United Nations Statistics Division, Latest Available Data

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Latest Update: September 2023