The activation of a long-planned Algeria-European Union free trade zone agreement on Sep. 1 seems uncertain, in light of widespread objections in the North African country.
In early August, President Abdelmadjid Tebboune called on Commerce Minister Kamel Rezig to reassess the European Union deal.
He insisted that the deal “must be the subject of special attention, asserting our interests for balanced relations,” an official statement read.
On Wednesday, Prime Minister Abdelaziz Djerad pledged a thorough review of the country’s trade terms and promised to revise all economic and commercial agreements “harmful to the country.”
He did not mention the EU free trade deal explicitly, but the premier was clearly alluding to it.
The EU-Algeria Association Agreement was signed in April 2002 and entered into force in September 2005. It sets out a framework for the EU-Algeria relationship in all fields, including trade.
The majority in Algeria opposes the agreement’s entry into force.
These include politicians, economic experts, and businessmen who denounce the apparent deficit in the trade balance in favor of the European Union, which is Algeria’s largest trading partner.
Ali Bey Nasri, chairman of Algeria’s exporters’ association, “the agreement was badly negotiated from the start.”
“When the deal was ratified in 2005, the EU had only 15 members, while now it is 27 strong and in a few years the membership will grow,” Nasri added.
A free trade zone would be a “disaster for the national economy,” he stressed.
According to Nasr, Algeria imported $320 billion in goods from the EU between 2005 and 2019, mainly in the form of machinery, transport equipment, and agricultural products.
“This figure is more than 20 times the $15 billion in non-oil and gas exports Algeria sent to the EU over the same period.”
The agreement between Brussels and Algeria came into effect in early September 2005, provided that both markets of open in preparation for the establishment of the free trade zone.
It stipulated granting Algeria a 12-year transitional period, until 2017, to gradually eliminate tariffs on industrial products, such as steel, textiles, electronics, and vehicles, and implement selective agricultural product liberalization.
The period was extended extra three years, until Sep.1, 2020.
Algiers has repeatedly asked to renegotiate the terms of the agreement.
“The Algerian-EU partnership did not fulfill its promises for Algeria,” said economics professor Nadji Khaoua.
The deal is not a fair one for the country, the economist noted, adding that opening up its markets to foreign consumer goods will neither create an economy less dependent on oil revenues nor will it make it more productive.
“A pause is needed to discuss new fundamental issues that are hindering a fair distribution of economic benefits,” Khaoua said, stressing that Algeria should renegotiate the deal with the EU.
