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Agence Tunis Afrique Presse | 25 January 2022
OTE calls for revision of trade agreements disadvantageous to Tunisia
(TAP)-The worsening trade deficit with China and Turkey is contributing to the draining of foreign exchange reserves and seriously threatens local production, according to a review of the Tunisian Observatory of Economy (OTE) released Tuesday.
The observatory recalled that Tunisia’s trade deficit with China stood at 6,325.5 million dinars (MD) in 2021, against 5,740 MD in 2019. The trade deficit with Turkey reached 2,655.9 MD in 2021, against 2,412 MD in 2019.
The dominance of European Union countries on Tunisian imports is declining in favour of China which now ranks 3rd after Italy and France, and Turkey which comes 7th after Germany (5th) and Algeria (6th).
"The top rankings of China and Turkey in domestic imports are a threat to some sectors that are losing more and more ground in the domestic market. The textile and leather sectors have suffered huge losses since the signing of the free trade agreement with Turkey, which caused the shutdown of about 7,000 shoe factories."
Citing data from the Central Bank of Tunisia, the observatory also considered that the trade balance deficit driven largely by the abysmal deficit recorded with these two countries, is largely contributing to the worsening of foreign exchange reserves which currently cover 136 days of imports, down 6% compared to 2020 (162 days of imports at the end of December 2020).
The OTE considered that the intention to revise the free trade agreement with Turkey announced by the Trade Ministry, as well as Article 57 of the 2022 Finance Law, which provides for a revision of customs duties levied on about 3,000 imported industrial and agricultural products, is a first step towards the rationalisation of imports, the protection of the local product and the mitigation of the draining of foreign exchange reserves. Nonetheless, the OTE wondered about the degree of commitment of the ministry to revise trade agreements that are disadvantageous to Tunisia, which is a sine qua non condition for rationalising the use of foreign currency and protecting the national economic fabric.