Algerian Official Insistence On Reviewing Association Agreement With EU

The Presidency of the Republic Mr. Abdelmadjid Tebboune has instructed the Ministry of Trade to re-evaluate the file on the free trade zone agreement (FTA) with the European Union.

While the entry into force of the agreement under the project of free trade zone between Algeria and Europe is scheduled for 1 September, the President of the Republic, Abdelmadjid Tebboune has asked the Minister of Trade, Kamel Rezig, to proceed to “an evaluation of multilateral, regional and bilateral trade agreements, including the file on the association agreement with the European Union”.

A presidential press release on 9 August, specified that the Head of State insisted on the above-mentioned supervision; to pay particular attention to the examining of the project of the FTA between Algeria and the EU.

The latter “must be the subject of a particular attention, emphasizing our interests for balanced relations,” President Tebboune said during the regular meeting of the Council of Ministers held this Sunday by videoconference.

It should be recalled in this context that the creation of this draft FTA dates back to 1 September 2005, as stipulated in the Association Agreement between Algeria and the EU. Furthermore, the agreement provided for a 12-year transition period granted to Algeria in order to progressively eliminate its customs duties on industrial products and a possibility to apply selective liberalization on agricultural products. The transition period was extended in 2012 until 1 September 2020.

Several Algerian economists and business leaders believe that the FTA agreement with the EU is to Algeria’s disadvantage.

The above-mentioned instruction from the President of the Republic supports the appeal by Algerian political leaders, economists and business people, who claim that the country’s current economic situation does not allow for a fair trade balance between Algeria and the EU.

The latter is largely to the detriment of the national economy. That said, the economy is not very competitive and has not yet managed to export its non-hydrocarbon products.

Thus, according to several economic operators, the Algerian company is not adequately prepared for this new market situation. For his part, Abdelwahab Ziani, President of the Algerian Federation of Food Processing, said that the FTA agreement will confront “local production with unfair competition, particularly in the food processing, chemical and pharmaceutical sectors.

For him, Algeria should no longer import products already manufactured locally, with the exception of inputs used in the manufacture of local products. For his part, Naït Abdelaziz believes that a new economic model should be created first, and then such contracts should be negotiated.

Some experts, led by the economist Abdelmalek Serai, estimate the losses of the national economy since the beginning of the partnership agreement with the European Union at about 10 billion dollars, which is a sufficient justification for reviewing this agreement, which includes articles that allow the affected party to call for an overhaul of the agreement.

For these economic actors, it is imperative to revise the clauses of the agreement in order to protect local production and regain the national market, thus avoiding the bankruptcy of thousands of Algerian companies.

In his reaction, the ambassador of Algeria to Belgium and its representative to the European Union, Ammar Bellani, criticized the lack of balance in the partnership agreement with the European Union, and defended some of the measures that Algeria has taken to confront this imbalance.