EU and Algeria Embroiled in Trade Tussle Over Spain's Policy Pivot

Tuesday 18 June 2024 - 14:50

The European Union has fired a salvo in an escalating trade dispute with Algeria, formally accusing the North African nation of violating a long-standing free trade agreement. This maneuver intensifies tensions between the two regions, sparked by Spain's recent policy realignment on the contested Moroccan Sahara territory.

At the crux of the conflict lie eight trade measures enacted by Algeria since 2021, including a ban on imports of marble and ceramic products – a key Spanish export to the Algerian market. The timing of these restrictions coincides with a diplomatic rift between Spain and Algeria, triggered by Spain's decision to align more closely with Morocco's stance on the Moroccan Sahara issue.

The European Commission alleges that these measures contravene the EU-Algeria Association Agreement, a 2002 pact designed to foster free trade between the two parties. Brussels points to a substantial decline in EU exports to Algeria since the restrictions were imposed, with Spain experiencing a particularly acute drop in trade volume.

Spanish officials have acknowledged the economic ramifications, with some voices within the government even voicing disapproval of the shift in policy towards Moroccan Sahara. Meanwhile, the EU seeks to engage with Algeria in constructive dialogue to dismantle the trade barriers across various sectors, including agriculture, manufactured goods, and even limitations on capital movement.

The EU's primary objective is to safeguard the rights of European exporters and companies operating in Algeria, who are bearing the brunt of the trade restrictions. Brussels further contends that Algerian consumers are negatively impacted by the limited product choices resulting from these measures.

This formal complaint by the EU signifies a significant escalation in the trade tensions with Algeria. While the dispute is rooted in recent Spanish foreign policy, it has now drawn the entire European Union into the fray. The success of the EU's approach hinges on its ability to convince Algeria to remove the restrictions through constructive dialogue, ensuring a level playing field for European businesses in the Algerian market.