On course for WTO membership
TRADE AND COMMERCE

Algeria enjoys a healthy trade surplus, entirely due to its exports of oil and gas. These accounted for about 97 percent of total exports last year. But like several other major energy producers, Algeria sees this as an unsustainable situation in the long term and is therefore keen to develop other activities that have a potential for overseas sales.

At the same time, the government recognizes the urgent need to integrate the country more into the world economy. At a time of increasing globalization, it is simply not practical to remain as isolated from mainstream world economic trends as Algeria was during its socialist era and the subsequent period of civil unrest. Now that the security situation has improved considerably, relations with major trading partners can be normalized, new ties can be made and Algeria can press ahead with its preparations for joining the World Trade Organization.
About 60 percent of Algeria’s trade is with the European Union (EU), notably with member states on the northern shores of the Mediterranean. This relationship is likely to remain the core partnership for Algeria for the foreseeable future, and the link has been reinforced by the signing of a formal agreement of association in April this year.

The agreement envisages the creation of a free-market area, following the phasing out of tariff barriers over a period of 12 years. From 2010, all monopolies will also be abolished. That will mean dramatic changes to Algeria’s domestic economy, but such restructuring is well under way. It is also part and parcel of the measures that need to be taken if Algeria is to be successful in its WTO candidacy.
A key player in this whole process is one of President Bouteflika’s closest political allies, Hamid Temmar. Prof. Temmar is Minister for Participation and Investment Promotion, overseeing key elements of the reform program, not the least of which is attracting foreign investment. But he also recently had an extended spell as Minister of Commerce. He sees the portfolios as two sides of the same coin, particularly in relation to the WTO.

“The challenge of our joining the WTO is not about our joining as such; it is rather a challenge to our economy, and the ability of our companies to live up to it,” he says. “Accordingly, we have carried out a complete review of our system of tariffs. We now have one of the most rational and liberal tariff systems possible.”
He adds: “Joining the WTO is only one element of a big process of restructuring, which means rewriting some of our laws. Moreover, we are reviewing all regulatory matters and installing a legislative framework to give us a wholly liberal economy.”

Major trading partners, including the United States, have been monitoring this process closely. Both the U.S. and the EU are keen to see Algeria succeed in its WTO bid, but there are outstanding issues that need to be resolved. “One question that is of enormous concern to Americans and U.S. companies is the protection of intellectual property,” says Prof. Temmar.
“There are rules covering trade-related intellectual property rights that one has to obey in order to get into the WTO,” he adds. “Obviously, some sectors of our parallel economy are going to suffer from that, such as the vast industry that has grown up involved in illegally copying CDs.”
Though there are likely to be transition pains, Prof. Temmar believes that WTO membership should enable Algeria to achieve the position in regional and world trade that it deserves. “This is a country that is sure of itself and knows what it wants,” he says. “In principle, we ought to be a great regional power.”