Econostrum | Economic News in the Mediterranean

Algeria toughens sanctions against Spain with a boycott of Iberian products

Written by Frédéric Dubessy on Thursday, June 9th 2022 à 15:05 | Read 262 times

The gap is widening between Pedro Sanchez, president of the Spanish government, and Abdelmajid Tebboune, Algerian president (photo: Embassy of Spain in Algeria - October 2020)
The gap is widening between Pedro Sanchez, president of the Spanish government, and Abdelmajid Tebboune, Algerian president (photo: Embassy of Spain in Algeria - October 2020)
ALGERIA / SPAIN. After having unilaterally broken off all diplomatic relations with Spain, recalled in March 2022 its ambassador for consultations, Algeria decided on Wednesday 8 June 2022, the "immediate suspension" of a treaty of friendship, good neighbourliness and cooperation concluded on 8 October 2002 with Madrid. It also pronounced a ban on Spanish imports and a freeze on bank accounts for foreign trade operations of products from and to Spain.

Algeria is taking this new wave of sanctions a step further.

The treaty provides a framework for relations between the two countries. It covers the development of cooperation in the economic, financial, educational and defence fields and regulates cooperation in the control of migratory flows. The Spanish Ministry of Foreign Affairs states that "the Spanish Government reaffirms its full commitment to the content of the Treaty and the principles underlying it, as reflected in its preamble, and in particular the strict respect for the purposes and principles of the United Nations Charter and the principles of international law as fundamental elements for the maintenance of peace, security and justice in international society".

The statement underlined that the Spanish government still considers "Algeria as a neighbour and friend and reiterates its full readiness to continue to maintain and develop the special relations of cooperation between the two countries".

Spain is Algeria's fifth supplier

The boycott of Iberian products reinforces measures already taken in April 2022 with the export ban imposed on Spanish beef. However, this new sanction contradicts the Euro-Mediterranean Association Agreement signed in August 2016 between Algeria and the European Union. It prohibits all non-tariff restrictions and discrimination. Its Article 6 deals with the free movement of goods and provides for the gradual establishment during a transition period of up to twelve years of a free trade area. Its Article 8 clearly states, "Products originating in Algeria shall be admitted for import into the Community free of customs duties and charges having equivalent effect and of quantitative restrictions or measures having equivalent effect".

In 2020, according to figures from the Spanish Ministry of Foreign Affairs, Spain was Algeria's fifth largest supplier (behind China, France, Italy and Germany) with $2.1bn (€1.96bn) in exports, compared with $2.9bn (€2.71bn) in 2019. This drop is explained by the consequences of the Covid-19 pandemic. Spain contributes 6.22% of Algeria's total imports (16.81% for China and 10.60% for France). It exports mainly manufacturing and food products.

According to data from the same source, between these two years, Algeria's exports to Spain fell from $3.99 billion (€3.72 billion) to $2.34 billion (€2.18 billion), a drop of 41.40%. Spain remains Algeria's third largest customer behind Italy ($3.44 billion) and France ($3.25 billion), but ahead of Turkey ($2.12 billion). It represents 9.84% of total Algerian exports (14.47% for Italy and 13.69% for France).

Western Sahara at the heart of the dispute

Last decision taken against Spain, a note was also sent to banks, Wednesday 8 June 2022, by the Association of Banks and Financial Institutions (Abef). The Algerian professional body asks them to freeze the direct debit of foreign trade operations of products from and to Spain from Thursday 9 June 2022. The Abef specifies that this measure is taken in connection with the suspension of the friendship treaty.

To the tune of "the friends of my enemies are my enemies", the dislike is growing between Algeria and Spain. The Western Sahara is at the heart of the quarrel between the two countries. The Algerian authorities did not appreciate the reversal of Spanish diplomacy, which has been neutral for 46 years, on this conflict. On 18 March 2022, Pedro Sanchez, President of the Spanish government, sent a message to the King of Morocco to inform him that "Spain considers the Moroccan autonomy initiative, presented in 2007, as the most serious, realistic and credible basis for resolving the dispute".

The rapprochement between Spain and Morocco (after a one-year diplomatic crisis following the reception of Brahim Ghali, leader of the Polisario Front, by a Spanish hospital), with which Algeria also broke off all diplomatic relations in August 2021, has caused a ripple effect with Spain.
"The Spanish authorities have engaged in a campaign to justify the position they have adopted on Western Sahara in violation of their legal, moral and political obligations as the territory's administering power, which are incumbent on the Kingdom of Spain until the decolonisation of Western Sahara is declared accomplished by the United Nations", said a statement from the Algerian presidency. Morocco controls 80% of Western Sahara.

Algiers remains very much on the fence on this sensitive issue. It even led, in 1963, the War of the Sands against its neighbour after border incidents. Algeria supports the Saharawi people in their quest for self-determination in this former Spanish colony, which is classified as a "non-self-governing territory" by the UN. It is calling for a referendum to be organised under the auspices of the United Nations. A vote promised since 1991 by the United Nations when a ceasefire was signed.

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