Algeria to Revise EU Partnership Agreement: Aiming for Economic Balance and Mutual Benefit

Watan-Algeria intends to soon begin revising its partnership agreement with the European Union, which has been in effect for nearly 20 years. This decision is driven by the “significant harm caused to the country as a result of the agreement’s implementation, due to the inability of Algerian products to compete in European markets.” Consequently, Algeria has become “merely a market for dumping European goods,” a situation that contradicts the principle of partnership.

During the latest Council of Ministers meeting, President Abdelmadjid Tebboune emphasized that the revision of the partnership agreement between Algeria and the EU is aimed at strengthening the “good relations” between the two parties and is based on the principle of mutual benefit (“win-win”). He clarified that the revision “is not due to a dispute but rather to support the good relations between Algeria and the European Union as an economic partner, based on mutual benefit,” according to a statement from the Council of Ministers.

Regarding the motivations for this revision, Tebboune explained that the decision is driven by “realistic economic considerations.” Since the agreement’s implementation in 2005, Algeria’s exports primarily relied on hydrocarbons. However, today, the country’s exports have diversified and expanded beyond hydrocarbons, particularly in agricultural production, minerals, cement, food products, and others.

Addressing concerns about Algeria adopting protectionist measures, the president stressed that the country has not banned imports in any sector except those that are produced locally and meet national market demands. He issued strict instructions to the government to counter attempts to tarnish Algeria’s reputation among global brands.

Tebboune underscored, “Algeria has not banned imports in any sector except for products manufactured locally, where production volumes meet national market needs.” He added that the objective is to “rationalize and organize imports based on sectors and curb repeated speculation on imported goods, such as spare parts, for which no import ban has been issued and which remain open to this day.”

He also issued “strict instructions to the government to counter attempts to tarnish Algeria’s image among global brands, by facilitating and encouraging investment, particularly by youth, in marketing well-known global brands in major commercial spaces such as malls, which attract a significant portion of Algerian youth.”

The decision to revise the agreement is currently a priority for Algeria. Foreign Minister Ahmed Attaf previously stated that the goal is to rebalance the mutual interests of the two parties, particularly for Algeria, which seeks to protect its local production following the revival of several sectors, such as industry and agriculture.

Attaf highlighted in his remarks that Algeria had been the losing party in the partnership agreement, which was largely trade-oriented, with trade exchanges amounting to $1 trillion. Meanwhile, European investments in Algeria did not exceed $13 billion, of which $12 billion was repatriated as profits, leaving Algeria with only $1 billion in benefits, according to the foreign minister.

In recent years, the EU has expressed discontent with Algeria’s policies restricting exports from its member states, which Algeria justified as necessary to protect its economy and conserve foreign currency reserves after a significant decline in its exchange reserves. The recent Algeria-Spain crisis highlighted these trade tensions, as Algeria significantly restricted the entry of Spanish products starting in April 2022, a move that the European Commission considered a violation of the partnership agreement.

According to a statement from the European Commission several months ago, “the European Union has launched a dispute resolution procedure against Algeria” to initiate “constructive dialogue aimed at lifting restrictions in several sectors, including agricultural products and automobiles.” Brussels specifically criticized “an import licensing system whose results are equivalent to an import ban, the requirement to use locally manufactured components for European car manufacturers exporting to Algeria, and a ceiling on foreign ownership in companies importing products into Algeria.”

Despite the decrease in the EU’s total exports to Algeria from €22.3 billion in 2015 to €14.9 billion in 2023, the EU remains Algeria’s largest trade partner, currently accounting for approximately 50.6% of its international trade.

Within Algeria, there is broad consensus at the governmental and party levels on the necessity of revising the agreement. The Algerian authorities’ refusal to escalate tensions following the European Parliament’s recent resolution is seen as an attempt to initiate these negotiations in a positive atmosphere. Algeria believes that the far-right in France played a role in influencing the European Parliament’s stance, particularly concerning the case of Boualem Sansal. However, Algerian authorities consistently distinguish between the hostile positions of the far-right and the relations it maintains with European countries, including France.

The Movement of Society for Peace (MSP), the largest Islamist party in Algeria, has gone so far as to argue that “the European Parliament’s resolution appears to be politically motivated under the guise of human rights and adherence to international agreements, while concealing growing concerns over Algeria’s efforts to revise the partnership agreement with the EU.” The MSP noted that the agreement has been significantly imbalanced in favor of the EU, exploiting the lack of sound policies by previous Algerian governments, resulting in a clear trade imbalance between the two sides. The party called for accelerating the revision of the partnership agreement to safeguard Algeria’s interests and reinforce the principle of reciprocity based on the “win-win” approach.