BY/ Hana Saada
ALGIERS- The diplomatic crisis that erupted between Spain and Algeria in June of last year has had far-reaching consequences beyond the energy sector. The conflict, which has been ongoing for a year, was sparked by the Spanish government’s unexpected reversal of its position on the Western Sahara issue in support of Morocco’s plan for the occupied territory.
In response, Algeria took several measures against Spain, including recalling its ambassador in Madrid and suspending the Treaty of Friendship, Cooperation, and Good Neighbor signed between the two countries in 2002. Additionally, Algeria froze bank domiciliations for foreign trade operations of products and services to and from Spain.
This last measure has had a significant impact on Spanish companies that rely on the Algerian market. As a result of the crisis, Spanish companies trading with Algeria have suffered losses amounting to millions of euros.
Prior to the crisis, Algerian-Spanish relations had experienced a “golden age” since 2013, according to Spanish media outlet ABC. The restrictions on banking operations for foreign trade between Algeria and Spain, imposed by the Algerian government last June, have had a direct impact on exports.
According to the Spanish Ministry of Industry, Trade, and Tourism, Spanish exports to Algeria have plummeted this year, with gas supplies being the only exception. During the first quarter of 2023, Spanish exports to Algeria fell by 93.6%, amounting to only 30.2 million euros, compared to 472.9 million in the same period of 2022. Last year, Spanish exports to Algeria fell by 45.9%.
This decline has affected all sectors, from food to energy products, including raw materials and chemicals. Durable goods, such as cars or household appliances, have fallen by 59.4%, while consumer goods in general have fallen by 68.4%.
The impact of this crisis on Spanish exports to Algeria has been severe, with many companies struggling to recover from the losses incurred. It remains to be seen how long this dispute will continue and what further consequences it will have for both nations.
During his visit to Algeria in March of this year, Josep Borrell, the High Representative of the European Union for Foreign Affairs and Security Policy and Vice-President of the European Commission, addressed the challenges that have arisen since June 2022 in regards to commercial exchanges between Algeria and Spain. It is imperative that a solution be found to overcome these obstacles.
Recent data from the Spanish public body ICEX Spain, as reported by the reputable Spanish media outlet ABC in April, reveals that a staggering 129,475 Spanish companies have terminated their commercial relationships with Algeria. This is a concerning trend that must be addressed promptly to ensure the continued growth and prosperity of both nations.
