EU launches arbitration proceedings against Algeria’s trade and investment restrictions

By requesting arbitration, the EU is working to restore the rights of EU exporters and EU companies operating in Algeria who are adversely affected by the restrictions. 

Trading with and investing in Algeria have become increasingly difficult for EU economic operators due to a series of barriers erected by the Algerian authorities since 2021. These barriers include an import licensing system virtually equivalent to an import ban on some products, a total ban on the import of marble and ceramic products, a cap on foreign ownership of and onerous re-registration requirements for companies importing goods into Algeria, and an overarching import substitution policy. 

The EU has attempted to remedy these barriers and requested consultations with Algeria June 2024 to try to find a mutually agreeable solution. The establishment of an arbitration panel constitutes the next step of the dispute settlement procedure, with consultations not having delivered a solution. The EU remains open to finding a negotiated solution at any time. 

Next steps

The EU has today appointed its arbitrator and Algeria should appoint a second arbitrator within two months. The third arbitrator would have to be appointed by the Association Council under the Association Agreement. The three arbitrators would then rule on the matter and the decision would be binding on the Parties.

Moreover, the EU is concerned by additional hurdles that Algeria has put in place targeting French exporters and businesses specifically. These are being closely monitored and will continue to be raised with Algeria.

Background

The EU is Algeria's biggest trade partner and accounts for the majority of Algeria’s international trade. However, the total value of EU exports to Algeria has been decreasing steadily, dropping by 31% from 2014 to 2024.

The EU and Algeria signed an Association Agreement in 2002 which entered into force in 2005. The Agreement sets out a framework for EU-Algeria cooperation in all areas, including trade. It liberalises trade in goods on both sides. The EU is Algeria's biggest trade partner and accounts for the majority of Algeria’s international trade.

The EU has repeatedly raised its concerns over trade restrictions on several market sectors with the Algerian authorities, but to no avail. The EU initiated the dispute against Algeria in June 2024 by requesting consultations, but these did not resolve the issues raised by the EU.

For more information

Note Verbale requesting arbitration

EU trade relations with Algeria

Dispute settlement