APA News, 17 July 2025

EU initiates arbitration against Algeria over trade restrictions

The European Commission has officially launched a dispute settlement procedure against Algeria, citing Algiers’ failure to uphold its commitments under the Association Agreement signed in 2002 and in force since 2005.

This action comes in response to escalating restrictions imposed by Algeria since 2021, which have significantly hindered European exports and investments in the North African nation. The contested measures include an import licensing system that effectively acts as a ban, outright prohibitions on specific products such as marble and ceramics, stringent limits on foreign ownership, and burdensome administrative requirements.

The European Commission has formally requested the establishment of an arbitration panel to restore the rights of affected European exporters and companies. Since the agreement’s inception, Algerian imports from the EU have decreased by over 33 percent between 2015 and 2023, while Algerian exports to Europe have risen, resulting in a substantial trade surplus for Algiers.

Algeria defends these measures by emphasizing the need to safeguard its local production and foreign exchange reserves. However, several European analyses point out that some of the blocked products, particularly in the automotive sector, are not produced locally in sufficient quantities to meet demand.

Moreover, some observers suggest a potential political motive behind the restrictions, especially those targeting Spanish and French companies, possibly linked to their respective governments’ stances on the Sahara issue.

The dispute resolution procedure mandates a phase of diplomatic consultations before arbitration can proceed. This marks the first activation of this mechanism since the Association Agreement was signed.