Spanish Companies Welcome the End of Trade Restrictions with Algeria with Relief and Caution

On Wednesday, November 6th, the Bank of Algeria issued a circular urging the general managers of the country’s banking institutions to proceed normally with transactions with Spain. “Authorised intermediary banks must take into account that direct debit operations for foreign trade with origin or destination in Spain must be processed in accordance with current regulations on foreign exchange,” the note states, lifting the trade restrictions that were still in force to and from Spain.

Concentrated in the Spanish Levant, the ceramics industry has so far been one of the main victims of the political crisis with Algeria. The ANFFECC, the business association that brings together 22 Spanish producers of frits, glazes and ceramic colours, acknowledges relief but some misgivings.

The trade restrictions affected Spanish companies

“Yesterday we received information regarding the possible lifting of the measures imposed by Algeria and it seems that we will be able to export to this country again, but we must be cautious and wait for official confirmation, because on other occasions there has been news that seemed hopeful,” Manuel Breva, secretary general of ANFFECC, said.

“In any case, we hope that this time it will be the definitive one, because we are coming from a long period with many difficulties derived from international conflicts such as the war in Ukraine, the Palestinian-Israeli conflict, so the opening of the Algerian market would give us some relief,” he added.

Until the total closure decreed in the summer of 2022 by the Algerian authorities, its market was the second destination country for the export of ceramic materials from the Levant. With its reactivation, the guild is now trying to regain lost ground. “At ANFFECC we have been very attentive to this issue since the blockage of Spanish exports to Algeria occurred in June 2022,” he added.

Algerian businessmen interviewed stress that the end of trade restrictions has been accompanied by a gradual and limited unblocking so far of products such as meat, chicken and cement. On January 14th, 2024, the suspension of imports of Spanish agricultural inputs was lifted. The approval for red meat from Spain was registered on February 24th.

In this period of more than 800 days, the losses in Spanish companies, mainly SMEs, have been in the millions. Spanish exports to Algeria have accumulated losses of 630 million euros since the June trade blockade until the end of 2022. According to data from the Institute of Foreign Trade (ICEX) cited by Efe, 8,934 Spanish exporters have permanently suspended their activities in Algeria in 2022.

Before the crisis, the two countries exchanged goods worth around $6 billion, divided almost equally between Algerian hydrocarbons and Spanish industrial and agricultural products and inputs. However, the supply of gas – Algeria is Spain’s main supplier – has remained unchanged during the crisis.

“We have been waiting for the news for more than two years and although it is a big step in the crisis we have been through, we cannot ignore that it is a return to the beginning and investing time and work to try to recover the market lost in these two and a half years. Our clients had to look for new suppliers when the market closed,” a Spanish businessman with business in Algeria told this newspaper.

New trade commissions are underway

On Wednesday, shortly after the circular from the Bank of Algeria was released, the Alicante Chamber of Commerce confirmed the resumption of trade missions to Algeria. Its president, Carlos Baño, described the opening as “very good news for the traffic of goods in the Port of Alicante and for companies in the province of Alicante.”

During this period of closure, Spanish companies established alternative trade routes or employed companies from other European countries such as Italy, France or Portugal to try to maintain business. Emmanuel Macron’s decision to recognise Moroccan sovereignty over Western Sahara and his recent visit to Rabat have caused Algeria, a supporter of the Polisario Front, to now transfer the blockade to trade to and from France.

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(Featured image by Kristijan Arsov via Unsplash)

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First published in EL INDEPENDIENTE. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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