Control over foreign trade

With the implementation of the Disengagement Plan in September 2005, Israeli military forces withdrew from the Gaza Strip. However, Israel still controls central areas of life for the residents of Gaza . In those areas that remain under Israeli control, Israel bears legal obligations for the welfare of the Gaza residents. These obligations stem both from International Humanitarian Law and from international human rights law.

Among other things, Israel controls all movement in and out of Gaza , including movement of all goods imported to Gaza and exported from Gaza . This control has far reaching implications, given that foreign trade, and particularly trade with Israel has decisive importance for the Gaza economy. Since the beginning of the second intifada in September 2000, aside from some rare exceptions, Israel has only allowed imports and exports through the Karni crossing. Movement of goods through this central artery takes place much more slowly than necessary to develop the struggling Gaza economy.

Due to the inefficient operation of the Karni crossing, Gaza exporters and merchants are prevented from competing fairly in foreign markets. The delays and frequent disruptions in the passage of goods make it hard for them to plan a production and marketing schedule for their goods, and do not allow them to commit to supply dates. This causes them to lose existing and potential customers. In addition, the delays lead to a great increase in shipping and storage costs of goods, and in some cases goods rot or are damaged before they reach their destination. As a result, import and export industries have been paralyzed, businesses have collapsed and many residents of Gaza have lost their source of employment.

The bottleneck at the Karni crossing stems from the illegitimate and faulty conduct of both Israeli and Palestinian actors. In order to completely release this bottleneck and to enable optimal movement of goods, therefore, conduct on both sides of the crossing must be improved. However, the State of Israel, which as stated above holds effective control of the crossing, has to do everything in its power in order to improve the movement of goods into and out of Gaza , thereby reducing the economic distress of Gaza residents. This is the case even if the faulty operations on the Palestinian side of the crossing are not rectified.

A substantial step in this direction could be made if Israeli authorities would enable operation of an airport or sea port from Gaza , or if they would operate additional land crossings for goods. A significant improvement would also result if the authorities would improve a few grave failures in the way they operate Karni:

• Repeated and unnecessary closing of the crossing – the proper balance between Israel's security needs and the needs of Gaza residents requires abstaining from closing the goods crossing between Gaza and Israel except at those times and places where it is essential to neutralize a security threat.
  
  
• Convoluted and unnecessary checks carried out at the crossing - Investment in appropriate technologies and adopting more efficient checking procedures would enable much more rapid movement of goods without harming Israeli security interests in any way.
  
  
• Limited operation of the crossing - Israeli authorities must invest the necessary funds in order to expand the hours of operation of the crossing and the number of personnel employed there.
  
  
• Corruption and exploitation of the crossing's faulty operation - the authorities responsible for the operation of the crossing must supervise their employees and sub-contractors in a more efficient way in order to reduce the phenomenon of corruption.