Liberalisation of trade in services and investment, including the right of establishment, is also part of the agreement, but will largely be dependent on Algeria’s entry into the World Trade Organisation (WTO), expected in 2006. Under the Association Agreement, WTO members reaffirm their obligations under the General Agreement on Tariffs & Trade (GATT), with non-members agreeing to the establishment of a trading system based on most-favoured nation status.

‘In the long term, Algeria will benefit from the influx of foreign investors that will result from the agreement, and from access to good quality products,’ says Axelle Nicaise, Algeria officer at the European Commission’s Directorate-General for External Relations.

The agreement also covers:

Commitment to a political dialogue involving support for democracy and the promotion of human rights;

Co-operation in investment, trade facilitation and the approximation of legislation, and in the fields of social affairs, migration and culture; and

Vertical liberalisation of trade between Algeria and the EU, and the liberalisation of exchanges between Algeria, Morocco and Tunisia.

The EU is the country’s largest trading partner, accounting for just under two-thirds of its trade, and Algeria in 2004 accounted for 71.8 per cent of the EU’s imports in the energy sector.

Association Agreements have now been signed with eight of the 10 Mediterranean rim countries. They are intended to pave the way for the creation by 2010 of a Euro-Mediterranean free trade area comprising the 10 countries and the EU, as envisaged by the 1995 Barcelona Declaration. Lebanon has signed but not yet ratified the agreement, and Syria is expected to sign soon following the recent conclusion of negotiations (MEED 18:3:05, Briefing).