By Khaled Guedeche and Madjid Hadjem, professor-researchers at the University of Tizi Ouzou, Algeria
The Algeria-European Union (EU) association agreement constitutes a new attack on our socio-economic achievements. It will bring a greater attack on the rights of workers, social rights and even food and environmental security.
To this end, a whole arsenal of laws and directives relating to all aspects of the productive, agricultural and industrial sectors, is ready or in the process of becoming so (total privatization of companies, customs code, decree relating to the conditions of division of land, law for the codification of the sale and location of agricultural land, etc.).
Supposedly based on “giver-giver”, the agreement is actually going to transform Algeria into a vulgar colonial agency. What exactly happens fifteen years after the agreement enters into force?
The observation of the evolution of Algeria’s foreign trade, from the signing of the agreement to the first quarter of 2020, shows that its commercial exchanges are mostly developed (50 to 65%) with Europe, that is, with the EU.
The agreement with the EU remains the main free trade agreement that Algeria has signed with foreign partners. In 2019, it represented, according to data from the General Customs Directorate, 84.34% of the value of exchanges in the framework of agreements (France, Italy and Spain are the main partners in this agreement and contribute more than 60%).
In fact, the association agreement does nothing more than endorse an already established fact, namely that each of the two parties represents a privileged partner for the other. While Algeria remains one of the main suppliers of raw materials and hydrocarbons, the EU continues to be Algeria’s main supplier of food and manufactured products. The evolution of Algeria’s trade balance with the EU is almost the same as with its foreign partners as a whole.
To illustrate, it had a surplus since 2002, and began to have a deficit since 2015, both with all foreign partners and those of the EU taken separately. In particular, we find a negative peak in both cases in 2016. This is due to the rigidity of Algeria’s import and export structure and its heavy dependence on oil prices.
In fact, since 2013, when oil prices began to decline after the spectacular and historical rise of the previous years, the balance has only receded. Observing the structure of Algeria’s foreign trade, after twenty years, it is easily perceived that it is unchanged, dominated almost exclusively by hydrocarbon products and their derivatives.
This dependence on hydrocarbons is also reflected in the indicators of how open the Algerian economy is. In fact, in the last fifteen years, we can observe that the internationalization rates and the export support rate are strongly linked, while the penetration rate remains constant between 10 and 15%.
During the long 2001-2019 period, the evolution curve of the trade balance is strongly linked to that of hydrocarbon exports, while that of other exports presents the appearance of an almost constant line, close to merging with the horizontal axis.
While Algerian exports to the EU represented 25.1% of GDP prior to the applicaion of the agreement, they represented no more than 11.9% in 2017. These figures illustrate the strong correlation of export values with oil prices. In other words, the heavy dependence on Algerian exports of hydrocarbons. This also means that one of the objectives of the agreement, the diversification of Algerian exports, was not reached.
In June 2015, at the Algeria-EU association council meeting, the Minister of State, on the ten year anniversary of the implementation of the agreement initiated on September 1, 2005, clearly stated that “in this association, Algeria has given more than he has received… It has been ten years since we finished the agreement and an evaluation is required.”
The official figures published by the National Agency for the Promotion of Foreign Trade illustrate the reality of this agreement that ruins the country. According to this body, in ten years Algeria has exported to EU countries, apart from hydrocarbons, 12,500 million dollars and has imported the equivalent of 192,000 million dollars. The EU is against any industrialization in the country; it just wants to make money with Algeria. For the EU, it’s 40 million consumers, period.
On the one hand, it demands the opening of the Algerian market to European investors and, on the other hand, it prevents Sonatrach  from investing in gas distribution in Europe and the development of petrochemicals in the country. Worse still, it recommends that the Algerian authorities sell electricity and gas in the national market at international prices.
Article 46 encourages “preparing energy companies and mines for the demands of the market economy and to face competition.” How to understand the fact that those same sectors are targeted by privatization?
The objective of the EU is therefore to remove the regulatory barriers that limit the potential profits of large capitalist groups, leaving the sectors still relatively protected from the free market, but also to authorize multinationals to question the social and environmental norms that hinder their expansion.
This association agreement has created the conditions for the destruction of public and private national production by prohibiting all forms of protection of the national productive apparatus. This agreement will then bring great difficulty to the rights of workers (the Labor Code), social rights (Social Security) or even food and environmental security.
Thanks to the agreement, multinational chemical companies such as Monsanto will be able to spread their GMOs more easily , to the detriment of public health. As for the political side of the agreement, an article explicitly prohibits Algerian authorities from taking any measure that questions it without first consulting the EU.
What the EU reproaches the Algerian government for is having introduced measures in its complementary finance laws to support national industries, the 51/49 rule,  in all associations and even the restrictions imposed on import operations.
To the detriment of all social and environmental concerns, this agreement has been shaped to respond to the needs of multinationals.
Its function is not only to constrain the opening of commercial borders; the abolition of customs fees, quotas and non-tariff barriers (quotas, regulatory norms), but also to organize the opening of sectors that are still protected to the voracity of multinationals and liquidate the public monopoly.
This liberalization and the imposed privatizations serve only large companies and financial investors. They serve to force public services to open up to international competition, subject them to the rules of the capitalist market and transform them into profit-generating privatized activities.
It is actually an attack whose objective is to reduce the historical advances that constitute social security, company nationalizations, the development of public services, the statutes that protect its personnel, and that were taken from a weakened and complicated bourgeoisie after the Second World War.
This agreement, concluded or under negotiation, thus constitutes the organizational framework for deregulation. It is oriented towards clearing the field for the multinationals and accelerating the ongoing process of decomposition. Contrary to what some claim, ending this agreement is possible. Article 107 of the agreement provides that “each of the two parties can denounce the association agreement… which ceases to be applicable six months after this notification.”
The consequences of the implementation will be dire in all vital sectors for the population. Unemployment, precariousness and poverty will spread throughout the country and the poor will become even poorer.
It is therefore urgent to see clearly how to avoid the drift caused by the appalling socioeconomic regression imposed by the IMF and the World Bank. Isn’t it time to take stock of previous reforms before continuing with this policy?
Common sense itself dictates this to us. Are we going to flee from the reality that shows every day the deterioration of the living conditions of Algerian women and men, and the attack on the rights to retirement and other guarantees and regulations?
It is clear that only political will can annul this agreement. In this difficult situation, political rescue measures can be taken to reboot the national economy and the development of national production.
The means exist and the Algerian people have the capacity to make the necessary efforts for the development of their country. It is about the future of the existence of the Algerian nation, the unity of our country and the integrity of the Algerian people.
 Algerian state oil company.
 Genetically modified organisms.
 National majority.