Brussels accuses Algeria of violating the association agreement with the EU

The European Commission has indicated this Friday that Algeria’s decision to freeze the friendship and cooperation agreement with Spain is a cause for “very much concern” and that the blocking of the commercial relationship most likely violates the association agreement between the EU and the Maghreb country, which could lead to commercial and economic retaliation by Europe. The commission’s announcement comes on the same day that the Foreign Minister, José Manuel Albares, has urgently traveled to Brussels to discuss with the community body the serious commercial and diplomatic crisis triggered by the unilateral decisions of Algiers. “What Spain and the EU propose is a quick return to dialogue and friendly relations,” Albares said early this afternoon.

“We are evaluating the implications of Algeria’s actions, including the instruction given to financial institutions to stop transactions between the two countries,” the EU’s High Representative for Foreign Policy, Josep Borrell, said in a statement. He adds that, “at first sight [esas medidas], appear to be a violation of the association agreement, particularly in the area of ​​trade and investment. This would lead to discriminatory treatment of an EU Member State and negatively affects the exercise of union rights based on the agreement.”

In case of non-compliance with the agreement, the EU can take retaliatory measures, which could hit Algeria. Or, it could even end up denouncing the agreement, in which case it would cease to have effect within six months, a perspective that Brussels does not want, but which, if necessary, would have serious economic consequences for the North African country.

Community sources point out that Spain cannot resolve the dispute by itself, which must be addressed at a European level. The agreement provides that the conflict must be resolved in the Association Council between the EU and Algeria. And if that council does not succeed, an arbitration would be established with a panel made up of three arbitrators, one for each party plus a third party appointed by mutual agreement by the aforementioned arbitration body.

This agreement strengthened trade relations between both parties with a general dismantling of tariffs. Bilateral trade increased by 136% between 2002 and 2014, according to data from the European Commission. And the EU is today Algeria’s largest trading partner, which sends almost 47% of its exports to the EU market. Algeria, on the other hand, only represents 0.7% of European goods exports.

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93.5% of European imports from Algeria are hydrocarbons, worth 10.7 billion euros in 2020. European exports are concentrated in machinery, agricultural and chemical products, for a total of 13,500 million euros. In addition, European investment in Algeria amounted to 14.5 billion euros at the end of 2019, according to the Commission.

Borrell also wanted to make it clear that Algeria is an important trading partner in the Mediterranean and a key player in regional stability. The statement was released by Brussels at the end of a meeting between Valdis Dombrovskis and Foreign Minister José Manuel Albares, who traveled to the European capital this Friday to assess the situation.

Read Borrell and Dombrovskis statement on Algeria

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