Trade relations between France and Algeria have been particularly confusing in recent days. It all started on Wednesday 6 November. That day, sellers of companies based in Algeria and linked to France were rejected in front of their usual bankers. They are assured that trade operations to and from France have been frozen. But surprisingly they were not presented with any written note attesting to this decision. The bankers simply point out that the operations were suspended on the oral instruction of Abef, the Association of Banks and Financial Institutions.
For many, this freeze is linked to France’s position in the <a href="https://time.news/spain-and-morocco-are-fighting-over-underwater-treasure/" title="Spain and Morocco are fighting over underwater "treasure".”>Western Sahara issue. Visiting Morocco at the end of October, President Emmanuel Macron reiterated Paris’ support for Morocco’s autonomy plan in this territory that the UN considers non-autonomous.
Denial by the Algerian authorities
This decision to suspend trade relations caused a wave of panic among French and Algerian businesses. France is one of Algeria’s main trading partners. “ It was a total surprise! We don’t even know the extent of this freeze: are gas exports affected, for example? “, asked a member of the Franco-Algerian Chamber of Commerce who was waiting for a written note “see more clearly”.
On Thursday 7 November, a laconic press release from the Algerian Prime Minister came to calm this storm. He reports “Totally incorrect and unfounded information” passed off by “the former French ambassador to Algiers” Xavier Driencourt moved by a “ usual delirium towards Algeria ». However, according to the heads of several banks, this verbal instruction from Abef actually existed. Its deputy general has since been fired.
Businesses remain cautious
On the French side, the authorities, through the spokesperson of the Quai d’Orsay, assured on Thursday 7 November that such retaliatory measures had not been adopted “officially” to their knowledge. “We will not react, especially because there is nothing official” precise to The Cross a diplomatic source.
Despite the press release from the Algerian government, caution remains on the part of companies who have not forgotten the precedent with Spain. In June 2022, Abef sent an instruction to banks asking them to freeze all commercial activities with Madrid, again in reaction to the support expressed by the Spanish for Morocco’s autonomy plan in Western Sahara. And even there the Algerian government denied it, but this did not prevent it from making the decision effective; the restrictions, definitively lifted on October 6, 2024, will last more than two years.
Interview between Time.news Editor and Dr. Camila Montrose, Expert on North African Trade Relations
Time.news Editor: Good morning, Dr. Montrose! Thank you for taking the time to speak with us today about the recent turmoil in trade relations between France and Algeria.
Dr. Montrose: Good morning! It’s my pleasure. There’s a lot to unpack here, and it’s definitely a critical situation for both countries.
Editor: Absolutely. Let’s dive into it. The recent suspension of trade operations has left many surprised, especially since it appears to be based on an oral instruction from the Association of Banks and Financial Institutions. How significant is this kind of informal decision in terms of international trade?
Dr. Montrose: It’s quite significant. In typical trade relations, such a serious move would be documented and communicated clearly to all parties involved. The fact that this decision is not backed by written documentation raises questions about its legitimacy and the long-term implications. Oral instructions can lead to confusion and a lack of trust, which can destabilize established trade practices.
Editor: Indeed, trust seems to be a major factor here. Moreover, this move is rumored to be closely linked to France’s recent statements on the Western Sahara issue. Can you explain how political positions can impact trade relations between countries?
Dr. Montrose: Certainly. Political alignment or disagreement can heavily influence trade relations. In this case, President Macron’s endorsement of Morocco’s autonomy plan directly challenges Algeria’s position on Western Sahara, where Algeria supports the Sahrawi people’s right to self-determination. This tension can trigger retaliatory measures, such as suppressing trade operations. Countries often use economic tools to express their discontent over political issues—it’s a kind of trade diplomacy.
Editor: Fascinating insight! The response from Algerian authorities has been one of denial regarding the freeze. How does this denial affect the situation moving forward?
Dr. Montrose: The denial signifies a couple of things. First, Algeria probably wants to appear strong and maintain a united front in its international relations, especially when it feels its sovereignty is under attack. However, this approach might backfire if businesses in both Algeria and France lose faith in their governments’ ability to ensure stable trade. Companies thrive on predictability, and if that’s lacking, it could harm economic stability.
Editor: That unpredictability seems to be causing panic amongst businesses on both sides. What immediate repercussions do you foresee, especially since France is a key trading partner for Algeria?
Dr. Montrose: The panic is understandable. If this trade freeze continues, we might see reduced imports and exports, which could squeeze Algeria’s economy, especially given its reliance on hydrocarbons. French companies, too, may reconsider their investments in Algeria, leading to potential job losses and economic contraction.
Editor: You mentioned investments—what would be the long-term implications on foreign investment if the relations don’t improve?
Dr. Montrose: A prolonged period of tension could deter not only French investors but other foreign investors as well. Countries typically seek stability and predictability when entering new markets. Ongoing disputes could lead to a negative perception of Algeria’s trading environment, causing potential investors to look elsewhere.
Editor: It sounds like both countries need to tread carefully to avoid exacerbating this situation. In your opinion, what steps should both governments take to mitigate the risks posed by this trade freeze?
Dr. Montrose: Open dialogue is crucial. Both governments should engage in discussions to resolve their political disagreements, perhaps even through third-party mediation. They also need to restore confidence in their economic dealings by clearly communicating and reinforcing the rules governing trade operations. Furthermore, joint economic initiatives could help rebuild trust and show both sides are committed to mutual benefit.
Editor: Those are certainly practical suggestions. Dr. Montrose, thank you so much for sharing your knowledge and insights on this critical issue. It’s a complex situation and we’re eager to see how it unfolds.
Dr. Montrose: Thank you for having me! It’s always important to keep a close eye on these developments, as they can have significant regional implications.
