The entry into force of the free trade area between Algeria and the European Union, scheduled for September 1 after 15 years of preparation, seems compromised. – GEOFFROY VAN DER HASSELT
The free trade area between Algeria and the European Union is supposed to come into force on September 1, but protests on the Algerian side could stand in the way.
The entry into force of the free trade area between Algeria and the European Union, scheduled for September 1 after 15 years of preparation, seems compromised as it is contested by political leaders, business leaders and Algerian economists. Especially since Algiers has asked many times over the years to renegotiate an agreement that is too unfavorable in its eyes. Without counting the decision of the Algerian president, Abdelmadjid Tebboune, to entrust in August to the Minister of Commerce Kamel Rezig the task of “carrying out an evaluation of the dossier on the association agreement with the EU”. According to him, this agreement “must be the subject of special attention, emphasizing our interests for balanced relations”.
Prime Minister Abdelaziz Djerad hammered home the point on Wednesday. If he did not quote the agreement signed between Algeria and the EU in April 2002, the allusion is transparent. He promised “a review of trade defense rules” through the “revision” of economic and trade agreements “harmful to the country”, and the reorientation of the diplomatic apparatus in the service of the economic interests of the country. The official establishment of the free trade zone (FTA) is the target of almost unanimous criticism from Algerian political leaders, bosses and economists who denounce a trade balance largely to the detriment of Africa’s fourth economy, it is true little competitive.
The EU is Algeria’s biggest trading partner. According to the president of the National Association of Algerian Exporters Ali Bey Nasri, Algeria imported 320 billion dollars (more than 270 billion euros) of goods between 2005 and 2019 while its exports to the EU did not reached just $ 15 billion, excluding oil and gas, during the same period.
An agreement “badly negotiated at the base”
The association agreement between Brussels and Algiers, which entered into force on September 1, 2005, planned to open their respective markets within an FTA. It provided for a transition period of twelve years, until 2017, so that Algeria gradually eliminates its customs duties on industrial products and applies selective liberalization of its agricultural products. This period was subsequently extended by three years, until September 1, 2020, for certain products such as steel, textiles, electronics and automobiles.
This agreement “was badly negotiated at the base. At the time, Algeria had ratified it with a Europe of fifteen members. Today, they are 27 and will be even more numerous in a few years”, explains Ali Bey. Nasri to AFP. “The Algeria-EU partnership has not kept its promises for Algeria”, abounds Nadji Khaoua, professor of economics at the University of Annaba (north-east). According to him, the mere opening of the Algerian market to foreign consumer products could not build an economy less rentier – like that of Algeria, dependent on oil – nor more productive, nor consequently generate growth.
It is about moving to a system “valuing by production the various resources neglected until now. This passage requires the promotion of the national interest not subjected to foreign pressures”, pleads the economist. The Ministry of Commerce remained evasive concerning the fate of the free trade area, telling AFP that an interministerial working group had been set up with the particular mandate of “evaluating the association agreement with the European Union “.
Rebalancing relations with Europe
Nadji Khaoua, pleading for a renegotiation of “relations with the EU on a state-to-state basis”, believes that “a pause would be the most appropriate to revisit substantive issues which prevent an equitable sharing of possible economic benefits” . Same position on the side of Ali Bey Nasri, who also wants a rebalancing of relations with Europeans. “They want to sell and we have to count our pennies.”
“I am one of those who say” basta “!”, He continues, stressing that in reality “99% of industrial products have been since 2018” in the conditions required for the FTA. “What the EU does not accept is that Algeria puts in place measures to protect our production tool which is already extremely weakened”, he notes.
