Trade Policy

Algeria started 2008 having made progress in reforming its trade regime towards achieving WTO accession. Based on its 12.4 percent MFN Tariff Trade Restrictive Index (TTRI)1 for 2007 the openness of Algeria’s trade regime is similar to that of an average Middle East and North Africa (MNA) country (11.9 percent), but more restrictive than that of an average upper-middle-income country (6.9 percent). Similar to the majority of other countries in the region, Algeria is more protective of its agricultural goods (13.8 percent) than of its non-agricultural ones (12.1 percent). The simple average of its MFN applied tariff has been relatively constant in the 2000s and in 2008 it was 18.6 percent. Taking into account preferences does not change the simple average of the applied tariff significantly (18.0 percent). Algeria has a maximum MFN applied tariff, excluding alcohol and tobacco, of only 30 percent, which is much lower than the regional average of 387.6 percent. However, the share of tariff lines with zero MFN is only 1.8 percent, and the share of tariff lines with duties higher than 15 percent (international peaks) is 40.3 percent.

Algerians have increasingly greater access to credit, fueling demand for consumer goods such as automobiles. However, new government tax policies are beginning to restrict such import-driven sectors. The country’s agricultural production is still below demand, and Algeria continues to import large volumes of bulk agricultural products and packaged foodstuffs.