Brussels, 25/02/2016 (Agence Europe) - Although the Algerian media are making much of an internal Algerian customs note implying that a suspension of the association agreement is imminent, Algeria's ambassador in Brussels, Ammar Belani, denies this and says it is an error of interpretation. However, the context is not inconsistent with a rumour spread shortly before an EU-Algeria association committee meeting, which started in Brussels on Thursday 25 February and will probably last until the following day.
The agenda of the ordinary session of this joint EU-Algeria association committee, which was set up as part of the 2012 association agreement, covers the key and highly sensitive subject of the renewal of the agreement's trade section. This has been in operation since 2005. The commitment was to establish free trade at the end of a 12-year transitional period (until 2017) in line with the rules of the WTO. Algeria is having difficulty in implementing this and counts on European support. Meeting clauses were set, especially on agricultural trade.
Algeria nevertheless challenged the timetable agreed, and obtained from the EU at the end of August 2015 (see EUROPE 10685) the three-year postponement - from 2017 to 2020 - of the final deadline for the process of dismantling tariffs for European industrial and agricultural products. The Algerians state that “implementation of the association agreement has not had an impact on the level and diversification of (Algeria's) exports other than hydrocarbons”, and has proved to be imbalanced.
The reality is that Algeria's trade, despite the resolve of its government, continues to be dominated by hydrocarbons, the export of which, according to Algeria's own statistics, represents the main part of sales of all products abroad (94.92% of the total, or US$ 1.833 billion in January 2016 compared with $2.403 billion a year earlier - a fall in revenue of 23.72%) Algeria's top four customers were Italy with US$406 million (21.03% of global Algerian exports in January), France with $386 million (20%), Spain with $210 million (10.88%), and the Netherlands (9.27%). The persistent fall in oil prices (and those of gas, as they are indexed to the oil price) seems to be pushing the Algerian government to tighten its budget and to discourage costly imports in foreign currency, which would mainly affect Europeans who are, except for China (19.8%), Algeria's top suppliers. According to official statistics, Algerian imports come from France (12.3%), Italy (10.33%), Spain (6.94%) and Germany (5.62%).
It is against this backdrop that the risk of suspending the association agreement is spoken about. Officially, the resolve is to relativise. Algeria's ambassador in Brussels, Ammar Belani, has told EUROPE that the reading of the document from the Algerian customs is “totally wrong”. “They are old import certificates required for cement, reinforcing bars and automobiles which have become obsolete given the introduction of the new legal system relating to import licences”, he said. It was apparently, he said, “a simple correction to be in accordance with the new regulatory arrangement” and “is not at all a question of cancelling the association agreement or suspending the customs agreements” as has “unduly” been reported by the press.
Algeria is, on the other hand, reportedly quite engaged in the cooperation framework that the revised neighbourhood policy offers (see EUROPE 11443) as this no longer requires the establishment of an action plan, deemed restraining by Algiers, in addition to the lifting of political conditionality. The dialogue on energy, the main axis of this cooperation, is reportedly on the right track and a meeting on trade in gas has already been scheduled for March. (Original version in French by Fathi B'Chir)