Directorate-General for Trade

Algeria

The European Union is Algeria's largest trading partner, absorbing just under two-thirds of Algerian exports.

Following the conclusion of negotiations in December 2001, Algeria and the EU signed an Association Agreement in the framework of the Euromed partnership in April 2002. This agreement which sets out a framework for the relationship in all areas including trade, entered into force in September 2005. Bilateral trade volumes increased by some 9.3% between 2003 and 2007, principally driven by rising oil exports. With 70% of EU imports from Algeria in 2007 being energy, Algeria ranked as the EU's fifth largest energy provider.

Algeria is among the biggest EU trading partners in the Mediterranean region and an important member of the Euromed partnership

Trade in goods

• EU good exports to Algeria 2008: €15.3 billion
• EU goods imports from Algeria 2008: €28.6 billion

EU imports from Algeria consist notably of energy (71%). In 2008, main EU exports to Algeria were machinery (26%) and transport equipment (13%), agricultural products (17%), iron and steel (14%) and chemical products (12%).

Trade in services

EU-Algeria trade in services is still relatively small, with services accounting for barely 30% of Algeria's GDP in 2005. Algeria exports to the EU primarily transport and travel services.

Foreign direct investment

EU FDI to Algeria is mainly focused on the hydrocarbon sector. Despite notable security concerns, the outflow in hydrocarbons is likely to be steady. The new hydrocarbon law of 2005 has the potential to multiply opportunities for foreign oil investments in Algeria, including in excavation, pipelines and transport as well as in downstream operations such as petrochemical processing. France is the third investor in the country, following the U.S. and Egypt.

More statistics on Algeria

South-South integration in the Southern Mediterranean

As part of the Euromed process, Algeria and the EU have as a joint goal the creation of new trade between the countries of the Southern Mediterranean rim. This region has the lowest level of regional trade of any region globally. Algeria endorsed the EU's new Pan-Euro-Mediterranean system of 'cumulation of origin' in September 2007. When applied, this system will allow producers to manufacture a product for export to the EU in more than one Euromed country without losing preferential tariff rates on the EU market.

WTO

Algeria is in the process of accession to the WTO, with strong support from the European Union. Negotiations started in 1998.

The new ENP framework and Financial Assistance

The EU and Algeria also work together in the context of the new European Neighbourhood Policy. The European Neighbourhood Policy Instrument has been endowed with €12 billion for the period for the period 2007-2013.For the period 2007-2010 the funds allocated by the National Indicative Programme (NIP) to the Algerian government amounted to €220million. The Algerian NIP for the period 2007-2010 includes support for small businesses, economic diversification, strengthening government and legal institutions and improving education and water treatment.