In 2002, Algeria signed an Association Agreement with the European Union in Valencia, Spain. It came into force on 1 September 2005. This trade agreement forms part of the EU-driven "Barcelona process", which aims to convert the Mediterranean basin in a giant free trade zone, under the EU’s dominant sphere of influence, by 2017. (The European Free Trade Association — Iceland, Lichtenstein, Norway and Switzerland — also wants an FTA with Algeria.)
In parallel, Algeria is being primed by Washington for a US FTA. This is part of the US’ own plan to create a US-Middle East free trade area, which would extend into the Maghreb, by 2013. Algeria already signed a Trade and Investment Framework Agreement with Washington, a preliminary step towards a US FTA, in 2001.
For its part, the Algerian government has signed a free trade agreement with neighbouring Tunisia, has been a candidate member of the Greater Arab Free Trade Area and would like to secure FTAs with the West African Monetary Union and Iran. In December 2008, the government announced its decision to fully enter GAFTA on 2 January 2009, raising the ire of the business sector. The corporate chiefs felt unconsulted and bound to lose to the influx of cheaper goods from other Arab countries. Some even threatened to outsource production to other GAFTA states and export to Algeria instead of producing in Algeria. Algeria is currently in the process of joining the World Trade Organization.
last update: May 2012
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