Algeria relaxes the trade blockade against Spain after a breach of 2.3 billion

Spain and Algeria move towards the normalization of their diplomatic relations after the shock caused by the change in the historical position of the Spanish Government on Western Sahara and its support for the autonomist positions defended by Morocco. After the crisis, the thaw has begun. Last December, Algiers sent a new ambassador to Madrid after more than a year and a half without representation and the Spanish Foreign Minister, José Manuel Albares, will make an official visit to Algeria next week confirming the new tone of relations.

The diplomatic crisis between Algiers and Madrid has had a direct impact on commercial relations between both countries and in this area the situation has also begun to turn around, timidly for now. Algeria has begun the partial lifting of the import ban on Spanish productswhich has sunk trade towards the Maghreb country to historic lows and has caused a billion-dollar loss in the Spanish trade balance.

The Government of Algeria ordered on June 9, 2022 to freeze direct debits for payments of products imported from Spain. The blockade since then has been almost total. Until now. Last January, the Algerian Banking Association authorized payments for imports of poultry products from Spain (particularly chickens for fattening and eggs for incubation) and this week the purchase of fresh red meatas confirmed by government sources to El Periódico de España, from the Prensa Ibérica group.

“Our Economic and Commercial Office in Algiers confirms slight advances and a gradual progressive restoration of commercial relations”, indicate from the Ministry of Economic Affairs, Commerce and Business. “This is a specific measure that affects a very specific sector, which is one of the priorities for Algeria based on the needs of its population. “The Commercial Office follows all these developments in detail, as well as the complaints and queries of all the companies affected by this situation.”

The trade boycott decreed by Algeria has resulted in a collapse of Spanish exports. Between June 2022 and November 2023 (latest data available), Spain exported only 387 million euros, compared to more than 2.7 billion euros in the previous eighteen months, according to the records of the Secretary of State. of Spanish Commerce. The diplomatic clash has caused a loss of more than 2.3 billion in the sales volume of Spanish companies to the Maghreb country in just a year and a half. A hole that has occurred in a context in which all Spanish exports have been setting historical highs and have become one of the engines of the reactivation of the national economy.

Just a first step

Algeria begins the lifting of the trade blockade, but there are Spanish export sectors that have not yet benefited from any change for the better at the moment. The paper products and its derivatives, for example, used to be the third largest item of Spanish exports to Algeria, with a total of 128 million euros in 2020 and 6.7% of the total exported.

Saica, the largest Spanish paper company, used to sell 110 million euros to Algeria, but after the outbreak of the crisis, they stopped exporting directly to the country. “The day we are allowed to ship our products from here to Algeria I will value it, but at the moment I still cannot sell paper from Spain, I have to do it from other factories,” said president of the Saica Group, Ramón Alejandro, in November. after being asked about the impact of Algiers’ decision to send a new ambassador. And today There is still no news about the blockade, as confirmed this Thursday by the company to this newspaper.

The Algerian blow has also been felt especially in the ports that had the Maghreb country as the destination of a large part of their connections, as is the case with Castellón. It used to be a place of intense merchandise traffic towards Algeria, thanks to its proximity. They especially sent products related to ceramics, such as enamels or capital goods and machinery for their manufacture. But the blockade has caused a 97% loss of sales: from 186.8 million euros in merchandise shipments to Algeria in 2021 to 6.06 million in 2023 (until November).

In general, the situation for the ceramic and tile sector does not seem to improve. On January 24, Algeria banned the import of finished ceramic and marble products. A protectionist measure, applicable to the entire world but with a special impact in Spain, with which the Government of Abdelmayid Tebboune wants to reinforce the incipient national production, reports from El Periódico del Mediterráneo, from the Ibérica Prensa Group. The boycott has been carried out in the same way in which the Algerian retaliation of 2022 began: an order from the Algerian Association of Banks and Financial Institutions (ABEF) that prohibits the domicile of operations for the import of those ceramic and marble products that are already are finished.

Diplomatic thaw

The visit on Monday of the Minister of Foreign Affairs, José Manuel Albares, points to the end of the hard phase of the bilateral crisis and strengthening diplomatic rapprochement. He has been invited by his Algerian counterpart, Ahmed Attaf, according to the Ministry in a press release.

After the electoral victory and formation of the Government by Pedro Sánchez, Algeria took a first step towards the normalization of diplomatic relations. He asked Spain for plácet (diplomatic permission) to send a new ambassador to Madrid, Abdelfetah Daghmoum. Spain has already granted it. The new ambassador thus occupies the vacant position of Said Moussi, who was called to Algiers for consultations indefinitely; retired, for all purposes. Since then, the Algerian delegation in Spain has been led by the chargé d’affaires.

The Government of Abdelmadjid Tebboune He has not given any explanation for the change of mind.. When he withdrew his ambassador and ordered the blockade, in June 2022, he made it clear that it was a retaliation against Pedro Sánchez’s support for Morocco in its plan to incorporate Western Sahara into the Kingdom “de jure” in exchange for giving autonomy. to disputed territory. Algeria is a rival of Morocco and supports and harbors the Polisario Front, an enemy of Rabat.

The analysts consulted by this newspaper point to two possible reasons to explain this thaw. The first is the fait accompli that Pedro Sánchez has a four-year term ahead of him, eventually, and a blockade that is too long also damages the Algerian economy. The second is the position of the socialist president on the conflict in Gazapublicly defending the lives of Palestinian civilians in the face of Israeli bombings, even at the cost of opening another diplomatic crisis with Israel. The Government of Algeria is one of the most pro-Palestinian. In fact, it is an active party in the lawsuit filed by hundreds of international lawyers for the International Criminal Court investigates Israel for alleged war crimes in Gaza; and, in January, he brought to the United Nations Security Council the ruling of the International Court of Justice for Israel to avoid genocide in the Palestinian Strip.

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