The Algerian government is preparing to raise the package of imported materials subject to the temporary additional fee from 998 to 2,600 products, after the revamping and study of it has been started in May 2019, and the new list will be revealed after the approval of the President of the Republic, Abdel Majid Tebboune soon, according to what It was announced recently by Minister of Trade, Kamal Raziq, before a parliamentary committee.

Raziq explained to public television last February that imposing an additional preventive fee comes to curb the "randomness" defined by the import activity, whether in terms of the type of products or the imported quantities, considering that as a "vehicle for smuggling currency through inflating bills."

At the time, the minister revealed that a customs duty of 100, 150 to 200% will be applied to all imported items that know the percentage of local production that guarantees coverage of the national market.

As for the lack of national production, the protective fee is in the range of 30 to 50%.

The Algerian authorities resorted to restrictions on foreign trade to reduce the import bill to its minimum levels, after the erosion of exchange reserves following the decline in oil prices since the end of 2014.

The new increase in the list of materials subject to additional tax, which practically means that they have become "prohibited" from importing according to the rules of the competitive market, comes within the repercussions of the Corona pandemic, which led to a further decrease in the price of a barrel of oil, as a main source in the state's general budget.

The Algerian balance of payments is suffering from a growing deficit, due to the decline in revenues from fuel exports, as the National Bureau of Statistics announced, at the beginning of this week, a trade deficit of 7.6 billion dollars during the first sixth of 2020.

Algeria tightens the screws on foreign trade to reduce the import bill and stop the smuggling of hard currency (Al-Jazeera)

What about Europe’s position?

Observers of the country's economic affairs assert that the decision of the Algerian government - which is already preparing to review its partnership agreement with the Europeans - will raise the objection of its partners in the international and regional spheres, led by the "European Union" as its first trading partner, especially in light of the economic downturn with the pandemic. For commodity markets.

Observers expect that the European Union will not remain silent about the emergency approach, and it may use many cards against Algeria, including playing the security card in the African coast.

Therefore, they advise them through diplomatic and negotiation channels to convince their partners of the privacy of their critical situation, instead of "unilateral arbitrary" options, as they put it.

It is noteworthy that Algeria has been linked to an association agreement with the European Union since 2005, one of the most prominent axes of which is the freedom of movement of goods. At the beginning of last September, the development of customs disassembly reached the establishment of a free trade zone.

The Algerian General Directorate of Customs also confirmed that Algeria's most important trade exchange took place with Europe during 2019, as it was estimated at 58% of the total volume of foreign trade, with a value of $ 45 billion.

International Arbitration

The economic expert, Abd al-Rahman Aya, affirmed that the content of the Algerian partnership agreement with the European Union is a gradual exemption of all customs tariffs imposed on all industrial goods, other industrial food products and agricultural materials of European origin upon their direct entry into Algeria, in return for benefiting from the same customs privileges for the goods themselves. When entering the European Union, with the addition of marine fishing products.

Abd al-Rahman Aya: The European Union will resort to international arbitration and use the oil and gas paper against Algeria (Al-Jazeera)

A group told Al-Jazeera Net that preparing a list of materials subject to the temporary additional fee if it includes products subject to the agreement is a breach of the terms of the partnership that actually and completely entered into force in September 2020.

He explained that the Algerian Ministry of Trade did not announce the extension of the total dismantling.

Unless there is a secret agreement, which may push the European Union to resort to international arbitration.

In return, the Algerian government can, according to the spokesman, resort to import licenses, as it is the only acceptable legal mechanism when a commercial party is affected within the framework of an international agreement.

oil and gas

However, this may be rejected by the European Union countries that may take countermeasures, the most important of which is reducing the supply of natural gas and petroleum from Algeria, which will lead to a decline in income in hard currency, which is necessary to finance more than 95% of imported products. Petroleum (tax) levies, which are essential revenues to finance domestic government spending, as he put it.

The import licenses also harm the national economy a lot - and what the expert says - given Algeria's link in terms of financing to foreign markets in light of the weak national production, which does not allow the substitution of imports of European products.

He added that the problem is not only the flow of European goods.

But the root of the problem is the loss of funds from customs duties and taxes, which are currently necessary to finance the state budget.

Bendada: The Algerian government must activate economic diplomacy to convince the Europeans of the sensitivity of its internal situation (Al-Jazeera)

Economic diplomacy

The former Minister of Trade, Mostafa Ben Badeh, considers that it is very natural for the European Union to try to pressure Algeria to discourage it from proceeding with its protectionist measures, because the Algerian market, with more than 40 million consumers, represents a great outlet for European institutions, especially in the period of great recession that the economy of the continent knows The old man now. "

But Algeria, which is also experiencing a severe economic crisis since 2014, complicated by the emerging Corona virus pandemic, does not have many options to preserve its weak economic fabric, Ben Bada confirms.

In a statement to Al-Jazeera Net, he justified Algeria's resort to preventive policies, to protect endangered job positions and some tax entries necessary to meet the urgent state's expenses.

He said that Algeria could brandish the threat of increasing illegal immigration to Europe if the country was exposed to more economic and social pressures leading to a deterioration in the standard of living of Algerians, especially the youth.

Bendada proposes that the Algerian government activate economic diplomacy and prepare for rounds of dialogue.

Rather, negotiations may be difficult and arduous, to convince its European partner of the feasibility of the measures to be taken, and that they are ultimately in the interest of both parties.