Not so long ago, to visit the Erez checkpoint on Gaza’s “border” crossing with Israel was to witness a modem slave market. Tens of thousands of Palestinian workers would wake up at 3 am and gather at Erez for the privilege of working in their occupier’s economy, predominantly in construction and agriculture, undertaking the “dirty work” that Jewish workers would not do, for a wage on average a third less than their Jewish peers. At least 30 percent of Gaza’s GNP derived from wages earned in Israel.
Today, the industrial order that gave rise to Israel’s dependence on the labor of Palestinians is withering. Prior to the uprising, as many as 180,000 Palestinians from the Occupied Territories worked in Israel, with 80,000 from Gaza. After the 1991 Gulf war, the number decreased to around 100,000, with about 35,000 from Gaza. By the time of Rabin’s blanket closure of the territories in April 1993, this decreased further to 65,000, with about 25,000 from Gaza. Today those who cross the Green Line do not exceed 45,000, with a ceiling of 16,000 from Gaza. If the autonomy deal between Israel and the PLO sticks, this number may rise, though not by much. Labor will anyway be relocated. As Salah ‘Abd al-Shafi put it, “We will still be working for Israel, but in Gaza, not in Tel Aviv.” 
This is the result of what Rabin calls “separation,” a security-driven policy made viable by technological changes that have produced a less labor intensive Israeli economy and by the importation of 59,000 workers from Southeast Asia and Eastern Europe.  Palestinians who possess Israeli permits are now viewed by their compatriots as the “lucky ones.” Since the Oslo agreement was signed in September 1993, unemployment in Gaza has stuck stubbornly at 50 percent of the total work force. Since the Palestinian Authority (PA) was installed in July 1994, the cost of living has soared by about 25 percent. Work in Israel remains one of the last surviving lifelines.
Poverty levels of this magnitude are politically unsustainable, regardless of autonomy, the competence of the PA or the size of its police force.  On July 17, 1994, 17 days after Arafat returned to Palestine, major riots broke out in Erez between Palestinian workers and the Israeli army, leaving two Palestinians dead and 75 injured. It was, said PA Justice Minister Furayh Abu Middayn, “a battle for a loaf of bread.” Israeli commentators recalled that it was an “enraged proletariat” that had kicked off the intifada. 
Israel’s solution was to “enhance” the security apparatus surrounding Palestinian workers’ entry into Israel, and to change its direction. To work in Israel today, a worker must walk a 500-meter corridor lined with concrete slabs and barbed wire before entering what Palestinians call the “cage”: a grid-like complex in which permits are checked and double-checked while Israeli soldiers hover at every exit point. If a worker has a permit but no Israeli employer to transport him or her to a workplace, he does not get through. If he tries to evade the cage altogether, he is liable to get shot.
But many Palestinians no longer need transport: They simply walk to the myriad construction sites that now line Gaza’s northern border with Israel. These sites are for an industrial zone — the remedy, the Rabin government hopes, for Gaza’s excess and volatile labor. The zone will eventually house “industrial parks,” modeled on similar enterprises in countries like Mexico and Taiwan.  There are currently seven industrial parks proposed in Gaza and the West Bank. Because the cost of creating an industrial infrastructure for the territories as a whole would be prohibitive — and counter-productive, if the territories’ chronic dependency on Israel’s economy is to be sustained — Israel has been quietly building “pockets of infrastructure” adjacent to the territories. Capital will be invested by joint Israeli, Palestinian and foreign ventures, but tied to main contractors in Israel and directed to labor-intensive industries such as food processing, textiles and furniture making. The parks are adjacent to the territories but not in them, hence coming under Israeli jurisdiction and subject to Israeli tax rates and US tax breaks. 
The main draw for these investments is the mass reserve of cheap labor that lies at their edge. Palestinian workers in Gaza not only work for lower wages than Jewish workers in Israel; they work for lower wages than Palestinian workers in Israel. It is the US-Mexico model applied to the territories, where Israeli (and other) capital enjoys the profits derived from surplus Palestinian labor without the social costs or security hassles of surplus Palestinian laborers on its turf. The prime condition is the promise of a branch-plant economy based on super-exploitation.
Under “self-rule,” most Palestinian workers will be relocated in these peripheral adjuncts to the Israeli economy. The rest, whether in Israel or in the territories, will constitute a semi-employed informal labor force to be absorbed and shed as the Israeli market dictates. If the industrial parks take root, they will bite into the territories’ acute unemployment, enough perhaps for Israel and its backers to have bought peace. But the Israeli and PA assumption is that Palestinian labor will remain docile in the face of this restructuring. If autonomy is to work, Palestinian labor must stay the way it is: a low-wage and unorganized work force, an underclass.
This may be a dangerous assumption, since by far the strongest potential sector of civil society in the Occupied Territories is the Palestinian working class. According to the Ramallah-based Democracy and Workers’ Rights Center, in April 1993 the Palestinian labor force comprised 339,000 workers — 90,000 working in the West Bank, 60,000 in Gaza and a colossal 189,000 in Israel.  Before Oslo, the political influence of this potentially crucial socioeconomic muscle was wholly debilitated. One reason was Israel’s policies of separation, closure and labor substitution. But there were others.
First, after the years of occupation and economic dependency, Palestinian workers comprised “a nascent migrant worker class of predominantly nationalist orientation.”  Their work in both Israel and the territories was casual, informal, unskilled and itinerant, with all the attendant problems this had for effective trade union organizing. By dint of this situation, Palestinian workers viewed their main adversary as less their own bourgeoisie than the military occupation. When they did take collective action, as during the intifada, class demands were subordinate to nationalist demands. Trade union consciousness was extremely low.
Second, Palestinian trade unions were divided along factional lines. Prior to Oslo, there were no fewer than three “general” trade union federations operating in the territories: a Fatah-controlled federation in Gaza and two federations in the West Bank, one aligned with the Democratic Front for the Liberation of Palestine (DFLP) and the other a bloc comprising unions affiliated with Fatah, the Palestine People’s (formerly Communist) Party (PPP) and the Popular Front for the Liberation of Palestine (PFLP). The federations competed with each other for members and turf. The result was a proliferation of factional unions in inverse ratio to their influence among Palestinian workers. By 1993, there were 161 “political” unions in the West Bank and Gaza, with a combined membership of not more than 6,000 workers, most of them politically affiliated. 
Trade Unions After Oslo
The Oslo agreement did instill an element of realism in Palestinian unions, though without challenging their factional bases. In October 1993, the three federations agreed to unify their ranks on the condition that general elections, based on proportional representation, would be held for a new executive by February 1995. In the meantime, the newly unified Palestinian General Trade Union Federation would be “internally reorganized” on a district rather than on a factional basis.
This has not happened. Neither the elections nor the reorganization, says one trade union activist, is “anywhere on the horizon.” “If anything,” says Moustafa Barghouthi, a Palestinian doctor and community activist, the artificial unity did not improve the unions’ work, nor did it reinforce its relations with workers. The union movement regressed because none of the leaders were even interested in their own union’s constituency.
The causes of this regression are many, including the political dissensions thrown up by Oslo among the different PLO factions. But there were also structural aspects. There was the problem of amalgamating the Federation with its counterpart in Tunis, the PLO’s General Union of Palestinian Workers (GUPW). For the GUPW’s General Secretary Haydar Ibrahim, Oslo necessitated the fusion of the two wings of Palestinian trade unionism. His notion of fusion, however, looks like a takeover. Of the GUPW’s 19-seat executive, he allocated two places for representatives from the Occupied Territories: one for Gaza’s Federation General Secretary Rasim Bayari and the other for West Bank General Secretary Shahir Sa‘id. Palestinian unions “inside” flatly refused the deal. The International Labor Organization insisted that it could only deal with “elected” representatives from the territories, not appointees from Tunis. The result is an ongoing turf war between the “outside” and the ”inside.”
In addition, Palestinian unions inside the territories are organized by faction or, more rarely, by district: They are not sector-based. Their claim to represent workers is thus made largely in a void. Take, for instance, the Gaza Federation. This is an executive made up of 12 members plus Bayari. They nominally represent six trade syndicates: sewing and weaving, agriculture, public services, transport, construction and metal workers. In fact, the executive members are appointed and paid by the Federation. Some of the executive members do not even work in the “trades” they represent. They are, no less than the Tunis GUPW, factional appointees.
The Federation’s “base” in the work force is likewise tenuous. In Gaza, with the exception of the taxi drivers’ transport union, where a driver has to be in the Federation to get a registration license from the PA, registered membership from the other five trades in the Federation is unknown. Gaza Federation claims a membership of 20,000, but a Gaza union activist involved in the federation thinks that its real membership is “several hundred at most.” “How can there be elections?” this activist asks. “The Federation has no definition of a member, no membership records, no occupational base.” It also means that the Federation has no collective bargaining weight vis-à-vis Palestinian employers.  This is not to say that the Federation has no power, simply that — as with taxi drivers — its power derives through the patronage it enjoys with the PA.
The Histadrut Negotiations
These defects proved baneful in what has been the most important challenge to Palestinian trade unions since Oslo: negotiations with the Israeli trade union federation, the Histadrut.
Under the PLO-Israeli economic protocol signed in Paris in April 1994, 75 percent of all Palestinian workers’ tax and welfare deductions paid in Israel are to be disbursed to the PA. Of these, 1 percent is for union dues. The Federation said that payment should be retroactive to October 1970, the date when Israeli labor exchanges started to register and tax Palestinians from the territories who worked in Israel, given that around 700,000 Palestinians have legally worked in Israel in the 24 years since, paying taxes but receiving scant services. By this estimate the amount owed by Israel to the PA is between $1.5 billion and $3 billion. Of this, the Federation calculates that $400 million is union dues. The Federation also wanted “secure work procedures” for Palestinians working in Israel.
The Histadrut argued that the “backdate” should be the Oslo signing, September 1993, since before that Israel was the de facto government in the territories and workers’ deductions helped to pay for “services” it provided there. As for union dues, the Histadrut said that it would disburse between $1 million and $1.7 million annually to the Federation from Palestinian deductions, on conditions that the Federation enter a “framework of cooperation.” This would oblige the Federation to work with the Histadrut on an array of workers’ issues from rights, training and social problems to women’s issues, sports and study facilities. In the opinion of one Israeli journalist, such “cooperation” would effectively transform the Federation “into a department of the Histadrut.” 
Both the West Bank and Gaza executives rejected the deal — or at least they thought they did. In August 1994, Yasser Arafat met with Amir Peretz of the Histadrut’s trade union section and suggested a compromise: Palestinian trade unions would receive the $1.7 million annually from the Histadrut and enter its “framework of cooperation,” with the proviso that the backdate dispute would be “subject to future negotiations.” Peretz agreed, as did Bayari and Sa‘id on behalf of the Federation, without consulting their executives.
When Federation executives got wind of the deal, they quickly moved to scuttle it. They added in a sub-clause that before any normalization with the Histadrut can occur, Israel must “recognize that Jerusalem is the capital of the future Palestinian state.” This, not surprisingly, the Histadrut refused to do. The upshot was a December 1994 “signing ceremony” in Brussels where no agreement was signed; the Federation representatives did not show up and the Histadrut walked out.
The Authority and the Unions
These maneuvers suggest a future for the Palestinian trade unions no less plagued by factionalism than its past, only now with the Federation assuming the augmented role of “state” union for the PNA. According to Hasan Barghouthi, director of the Democratic Workers’ Center:
Our fundamental role is to democratize the unions to put them on an independent footing. The current factional leadership will then face a choice: Either resign or be held accountable to their membership by fighting on labor issues rather than narrowly factional issues. I’m not just talking about Fatah here. All of the PLO factions have had the same abusive attitude to trade unions, using them as mere fronts for their political line.
Barghouthi cites labor struggles in Ramallah and Gaza where, since Oslo, workers have formed their own workplace committees. “These are the embryonic bases of a new union movement,” he says. “The committees deal directly with employers, decide actions, without the intervention of the factions.” If the trend can be sustained, Barghouthi believes, there are opportunities for a workers movement in the limited “new space” afforded by the autonomy, even in the difficult and unequal relationship with the Histadrut. “One of the good things about the relationship with the Histadrut is that it will force Palestinian trade unions to organize around trade union issues,” he says. “Whatever the limitations of the Paris Protocol, it permits recruitment. And if Palestinian trade unions do not fight to recruit workers in Israel and in the territories, the Histadrut will.”
The immediate challenge facing any nascent union movement in the territories is to stake out an independent position vis-à-vis the PA. The crucial issue here will be labor law. “We must fight for the implementation of laws consonant with all the international ILO agreements,” says Barghouthi. “At the very least, we must aim to harmonize our laws with those that obtain in Israel.”
The labor laws that currently exist in the territories are a mix of Egyptian (in Gaza) and Jordanian (in the West Bank) codes, some of them almost feudal in character. In the West Bank it is still legal for minors to work full shifts for six months without pay if their parents or guardians so agree.  It is unclear where the PA stands on such matters, but the signs so far, says Barghouthi, are not encouraging.
The PA’s draft Basic Law states that workers can be paid in wages or in goods. This contravenes every intemational labor law. So in whose interest this clause? Clearly, the old Palestinian landowners who still use payment in kind for their employees.
This class is disproportionately represented in the PA’s current ruling coalition. According to Hasan Barghouthi, “more than 50 percent of Arafat’s appointed ministers are either landowners or employers” from the territories.  The other ministers, such as Nabil Sha‘th and Ahmad Qurayyi‘, are Arafat loyalists whose economics are staunchly neoliberal and anti-labor.  There are no representatives of labor among the current 22 ministers. Nor, says Barghouthi, are there likely to be:
Arafat and the PA are banking on the support of Palestine’s middle bourgeoisie for both investments in the autonomy and donations to the authority. Recently, all the employees of the Cairo-Amman Bank in the West Bank went on strike. The employers called on Arafat to mediate, who did so via the good offices of Shahir Sa‘id and the Federation. He persuaded the workers to call off the strike, pending, of course, future negotiations.
An Independent Future?
Given the class composition of the PA, and the economic scenarios prepared by Israel and endorsed by the “free trade principles” of the Paris Protocol, Palestinian workers are likely to pay a very high price for the autonomy. By the same token, they have the greatest interest in resisting it. Yet, says Barghouthi, this resistance cannot be channeled along “classic class struggle forms.” Rather, Palestinian workers must become the leading force in a broad democratic coalition made up of Palestinian NGOs, the women’s movement and Palestinian political factions. These together must struggle to chart an independent future for the autonomy, against both the economic imperatives of Israel and the PA’s probable complicity with them.
“Palestinian trade unions cannot be simply self-interested or oppositional in their attitude to the PA,” says Barghouthi. “In the interim period, our struggle is not going to be confined solely to economic issues; it will also include law, democracy, human rights, social provision and education. In short, development. The next stage requires a new kind of struggle in which workers should take a main responsibility for the welfare of the Palestinian nation.”
The precondition for this is a genuinely mass-based, democratic and independent trade union movement. The alternative is the short road to Erez Junction.
 Salah ‘Abd al-Shafi, “We Will Be Working for Israel in Gaza Rather Than in Tel Aviv,” Middle East Report 186 (January-February 1994).
 “Separation,” says the Israeli peace bloc, “is the exact Hebrew translation for the South African term apartheid.” See its statement in Ha’aretz, February 2, 1995.
 As of February 1995, there were 16,200 PA “security personnel” employed in Gaza.
 The phrase is the title of an early chapter of Ze’ev Schiff and Ehud Yaari’s Intifada: The Palestinian Uprising — Israel’s Third Front (New York: Simon and Schuster, 1990).
 Asher Davidi, “Israel’s Economic Strategy for Palestinian Independence,” Middle East Report 184 (September-October 1993).
 President Clinton announced in February 1995 that the “Palestinian [sic] industrial zones” would enjoy tax free exports to the US.
 These figures include registered and unregistered workers and, of course, employed and unemployed workers.
 Joost Hiltermann, “Work and Action: The Role of the Working Class in the Uprising,” in Jamal Nasser and Roger Heacock, eds., Intifada: Palestine at the Crossroads (New York: Birzeit University and Praeger Publishers, 1991).
 Information from the Democratic Workers’ Rights Center.
 Tackling the exploitation of Palestinian workers at the hands of Palestinian employers does not, in any case, appear to be very high on the Federation’s agenda. When asked about Palestinian women workers in Gaza who work ten-hour days for $50 a month, Bayari said: “It’s not the [Palestinian employer’s fault, but the fault of the [Israeli] authorities. It is not yet clear to us what will happen under autonomy, but we will not permit any exploitation of workers.” See Suha Aref, “Five Shekels a Day,” Ha’aretz, June 17, 1994.
 Assaf Adiv, “On the Road to Marrakesh, via Gaza,” Challenge (January-February 1995).
 See the account in Palestine Report, October 16, 1994: “The vegetable market in the West Bank city of Nablus employs hundreds of minors between the ages of 14 and 18 to work in emptying crates of fruits and vegetables. The first shift starts at midnight after these trucks have been unloaded. The second shift starts at dawn and ends at the end of the working day. In between the shifts, the minors sleep in warehouses adjoining the market…. It is estimated that each child carries a monthly average of 200 crates, or 3,000 kg of produce. Wages fluctuate between $130-200 a month. The minors do not receive weekly vacations.”
 Mohammed Zuhdi Nashashibi, Zakariyya al-Agha, Furayh Abu Middayn, Munib Masri, Elias Furayj and Faysal al-Husayni, all ministers in the PA, belong to traditional landowning families.
Qurayyi‘, the main PLO negotiator for the Paris Protocol, is an advocate of the industrial parks plan. See Jerusalem Times, February 24, 1995.