L. Fituni, I. Abramova Resource Potential of Africa and Russia's ...

Exports of Russian raw materials to Algeria began to shrink after
the 2006 agreement of the Association of Algeria with EU had
come into effect. In accordance with the Agreement the parties assumed
the obligation of launching a Free Trade Zone by 2012. Due
to this obligation already in 2006 Algeria removed or reduced custom
duties for over 2,000 commodity items originating from the EU.
Many of these goods had been previously imported from Russia,
and formed about 50% of Russian exports to Algeria. In September
2007, in accordance with the relevant program of transition to the
Free Trade Zone the import duties for 1095 items were reduced by
20% and for 1858 by 5%. Such reductions will take place on the
regular basis till the complete abolition of the customs duties in
2012. 13
Though formally a measure to open markets, these reductions
negatively affect Russia’s trade with Algeria, making Russia’s
goods (even those of superior quality) less competitive than those
from the EU). This non-market price competition directly affects
economic security of the Russian Federation by not only undercutting
possibilities for Russian manufacturing industry to earn foreign
currency, but also potentially forcing Russian companies to restrain
production and dismiss redundant workforce. An obvious measure
would be to look for ways of counterbalancing the economic security
threats posed by Brussels’ expansionist maneuvering and to
work out a coherent road map in order to protect the renascent Russian
industries from non-market competition.
One has to acknowledge that on the whole the EU managed to
neutralize through various means Moscow’s attempts to translate
into life Algeria’s and Russia’s good-will and intention to develop
mutual economic relations. Intensive ‘personal work’ with a number
of representatives of the Algerian elite and business circles restrained
the efforts of the two countries to coordinate their energy
policies on the global arena. The results of cooperation in the oil and
gas sector proved to be more modest than practically with any other
energy exporter in Northern Africa. The EU in general and some EU
members in particular still regard Algeria and other Afro-
Mediterranean states if not as their backyard, then at least their zone
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