EU Commissioner to Visit Algeria to Amend Two-Decade-Old Partnership Agreement
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Takeaway
The upcoming visit by the EU Commissioner signals a critical juncture for the EU-Algeria partnership. International investors and energy executives should closely monitor the renegotiation terms, particularly regarding trade liberalization, investment protection, and dispute resolution mechanisms. Any shifts in these areas could significantly impact the risk-reward profile for businesses operating in Algeria, especially those in the energy and manufacturing sectors.
The European Union's Commissioner for Mediterranean Affairs is scheduled to visit Algeria in the coming weeks to advance the re-evaluation and modernization of the partnership agreement between Algeria and the EU. The agreement, which is over 20 years old, will be updated within the framework of the new “Mediterranean Compact” approach. The visit aims to restructure relations between Algeria and the EU.
The Association Agreement between Algeria and the European Union was initially signed in April 2002 and went into effect on September 1, 2005. In 2015, Algeria expressed its desire to reassess the agreement. The EU remains Algeria's largest trading partner, accounting for approximately 48% of Algeria's international trade in 2024. In 2021, trade exchanges between Algeria and the EU amounted to $37.3 billion (~DZD 5.04 trillion), a significant increase from $28.2 billion (~DZD 3.81 trillion) in 2020.
The EU-Algeria Free Trade Agreement aims to eliminate tariffs and trade barriers to foster economic and trade relations. The agreement covers various goods, including electric generation equipment, mechanical equipment, motor vehicles, and mineral products. Since 2017, 95% of Algerian imports of European industrial products have been duty-free. Fuel and mining products constituted 95.7% of EU imports from Algeria in 2017, while chemicals represented 2.9% of Algeria's exports to the EU. The EU's main exports to Algeria include machinery (22.2%), transport equipment (13.4%), agricultural products (12.8%), chemicals (12.8%), and iron and steel (10.2%).
While the EU remains Algeria's top trading partner, EU exports to Algeria have decreased from €22.3 billion in 2015 to €14.9 billion in 2023. In July 2025, the EU initiated a dispute settlement procedure against Algeria, citing trade and investment restrictions that violate the Association Agreement. The EU has raised concerns about Algeria's discriminatory import licensing system, localization requirements for foreign investors, and non-tariff barriers.
As Algeria reviews its Association Agreement with the EU, potential outcomes could significantly impact trade relations and investment flows. The discussions will likely address concerns related to trade imbalances, market access, and regulatory practices. Investors should monitor the progress of these negotiations and any resulting policy changes, as they could affect various sectors, including energy, manufacturing, and agriculture.