Algeria has developed a reputation as a regional leader in peace mediation

Algeria’s foreign policy has long been characterised by an independent streak, which has allowed the country to broaden its diplomatic ties in order to strengthen and deepen trade ties. The country has been particularly active in cultivating links with regional neighbours, and also benefits from close relations with major powers like the US and EU.

EU

Unsurprisingly, given the historical ties, Europe remains one of Algeria’s closest partners. In the last decade, Algeria has looked across the Mediterranean Sea for new markets and tighter economic cooperation. Algiers signed an Association Agreement with the EU in 2002 and expressed a willingness to begin talks for an Action Plan under the European Neighbourhood Partnership in 2011.

While the partners continue to work towards “a mutual commitment to common values”, as the European Commission puts it, trade between Algeria and the EU continues to flourish. The economic bloc is Algeria’s largest trading partner, accounting for over half of the country’s trade (54.1%), or €52.76bn in 2014. The vast majority of Algeria’s exports to the EU – 96.7% – come from the hydrocarbons and mining sector. In terms of imports, goods are concentrated in machinery and transport equipment (37.4%), the agricultural (15.42%), the chemicals (10.59%), as well as the iron and steel (9.9%) sectors.

France

Despite their painful break, Algeria and France remain deeply linked. Shared usage of the French language makes Algeria a natural destination for investment, business outsourcing and some tourism, not to mention the presence of large expatiate communities in both countries.

France is the second-largest supplier of imports to Algeria with 11.4% market share (€5.9bn), having ceded first place to China (12.4%) in 2013. Algeria is France’s 14th-largest export market, and the largest in the Arab world. French exports consist mainly of cereals (19% of total exports), automobiles (12.5%) and pharmaceuticals (12.4%). The state visit of French President François Hollande in 2012 led to the establishment of a joint economic commission that should help to strengthen overall relations.

US

The country also benefits from close ties with the US. In April 2015, Foreign Minister Ramtane Lamamra went to Washington for a strategic dialogue meeting with US Secretary of State John Kerry. This follows the latter’s trip to Algeria in 2014. While counter-terrorism and regional stability were on the agenda, the two parties also discussed progress in economic cooperation between the two countries. Lamamra stated that, “The Algerian government seeks to diversify its national economy and has taken significant steps to further improve the [investment] environment. We have already asked our international partners, including the US to support us.” US exports to Algeria grew by 41.6% to $2.6bn in 2014, although imports from the North African country fell by 4.2% to $4.6bn.

Regional Policeman

While the country’s extensive security apparatus has been largely successful in reducing domestic risk and countering threats at home, Algiers has opted for inclusive diplomacy, including a willingness to engage armed groups, when brokering peace abroad. The Algerian government has played an active role in diplomatic efforts to end the conflict affecting its southern neighbour, Mali. In January 2014, the government initiated talks between Tuareg separatist groups, the government and militias allied to the government.

The talks, which lasted for 18 months, included four governments and eight sub-state actors. Algeria’s persistence in the face of scepticism paid off in June 2015, when a peace deal was signed between the government and the Coordination of Movements of Azawad, an alliance of Tuareg-led rebels. Lamamra, the minister of foreign affair, attended the signing ceremony, which gave the northern region of the country greater autonomy in governing its affairs.

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The Report: Algeria 2015

The Report

This article is from the Country Profile chapter of The Report: Algeria 2015. Explore other chapters from this report.