The entry into force of the free trade area between Algeria and the European Union, scheduled for 1 September after fifteen years of preparations, seems to be jeopardized as it is being questioned by political leaders, business leaders and Algerian economists.
More than a decade of preparation in vain? The Free Trade Area (FTA) between Algeria and the European Union, which will enter into force on 1your September seems compromised, especially since Algiers has many times over the years requested to negotiate an agreement that is too unfavorable in its eyes.
To this is added the decision of the Algerian President, Abdelmadjid Tebboune, to entrust to the Minister of Trade Kamel Rezig in early August to “carry out an evaluation of the documentation on the Association Agreement with the European Union”. According to him, this agreement must “be the subject of special attention and emphasize our interests in balanced relationships”.
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 a “review” of economic and trade agreements “detrimental to the country” and the reorientation of the diplomatic apparatus in the service of Algeria’s economic interests.
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The official establishment of the Free Trade Agreement is the target of almost unanimous criticism from Algerian political leaders, employers and economists who condemn a trade balance largely to the detriment of Africa’s fourth economy, it is true not very competitive.
According to the president of the National Association of Algerian Exporters, Ali Bey Nasri, Algeria imported $ 320 billion (more than € 270 billion) of goods between 2005 and 2019, while its exports to the EU, its largest trading partner, reached only $ 15 billion excluding oil and gas under the same period.
An agreement reached when the EU had fifteen members
The Association Agreement between Brussels and Algiers, which entered into force on 1your September 2005, planned to open their respective markets within a free trade agreement. It provided for a transitional period of twelve years, until 2017, so that Algeria will gradually abolish its tariffs on industrial products and apply selective liberalization of its agricultural products.
This period was then extended by three years, to 1your September 2020 for certain products such as steel, textiles, electronics and cars.
This agreement “was poorly negotiated at the base. At that time, Algeria had ratified it with a Europe of fifteen members. Today they are 27 and will be even more in a few years”, explains Ali Bey. Nasri.
“The Algeria-EU partnership has not kept its promises to Algeria,” said Nadji Khaoua, a professor of economics at the University of Annaba (Northeast). According to him, only the opening of the Algerian market for foreign consumer products could not build a less rentable economy – like Algeria, depending on oil – nor more productive, and therefore not create growth.
It is about moving to a system “that values the production of various resources that have been neglected until now. This passage requires the promotion of the national interest that is not exposed to foreign pressure”, the economist asks.
A working group set up
The Ministry of Trade remained evasive over the fate of the free trade area and told AFP that an inter-ministerial working group had been set up with the special mandate to “evaluate the association agreement” with the European Union “.
Nadji Khaoua, who is calling for a renegotiation of “relations with the EU on a state-to-state basis”, believes that “a break would be the most appropriate to discuss material issues that prevent a fair sharing of possible economic benefits”.
The same position on 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 and emphasizes that in reality “99% of industrial products have been since 2018” under the conditions required for the free trade agreement.
“What the EU does not accept is that Algeria took steps to protect our production tool, which is already extremely weak,” he said.