Algeria and Spain Move Toward Diplomatic Normalization Amid Trade Rebound

Spain and Algeria are moving toward normalizing diplomatic relations after a period of strain sparked by Madrid’s shift on Western Sahara and its support for Morocco’s autonomy plan. The crisis cooled gradually, with a new ambassador exchanged in December and renewed dialogue set to be affirmed during an official visit by Spain’s Foreign Minister to Algeria in the coming days.

The rift between Algiers and Madrid had a direct impact on trade, and signs of recovery appear, though cautiously. Algeria has begun to lift parts of its import ban on Spanish goods, reversing a collapse that dragged bilateral commerce to historic lows and cost Spain a substantial trade balance deficit.

On June 9, 2022, Algeria ordered the freezing of direct payments for Spanish imports. Since then the blockade had become nearly complete. Earlier this year, the Algerian Banks Association allowed payments for certain imports, including poultry products such as fattening chickens and hatching eggs, fresh red meat, and other goods, according to government sources cited by Prensa Ibérica for El Periódico de España.

“Our Economic and Trade Office in Algeria reports slight advances and a gradual restoration of trade relations,” stated the Ministry of Economic Affairs, Trade and Commerce. “This is a narrowly targeted measure affecting a specific sector, aligned with Algeria’s population needs. The Trade Office monitors developments closely and responds to questions and concerns from all companies affected.”

Albares visits Algeria to end the diplomatic crisis and confirm the thaw

The trade boycott had shattered Spanish exports. Records from the Spanish Ministry of Industry show that between June 2022 and November 2023 exports totaled 387 million euros, far below the 2.7 billion euros logged in the previous 18 months. The diplomatic dispute inflicted substantial damage, while Spanish companies in the Maghreb region faced a significant shortfall; exports had once been a bright engine of the economy’s revival.

A cautious first step

Algeria’s partial lifting of the blockade leaves several Spanish export sectors still waiting for relief. Paper products and derivatives made up the third-largest export item to Algeria in 2020, totaling 128 million euros and 6.7% of Spain’s total shipments. The industry was hit hard by the crisis.

Spain’s largest paper producer, Saica, used to export about 110 million euros of paper to Algeria. With the crisis, direct shipments paused. “I’ll welcome the day we can ship from here to Algeria again, but for now I must operate through other facilities,” said Saica Group president Ramón Alejandro. Asked about Algeria’s ambassador move in November, there had been no subsequent update on the blockade, a point confirmed by the company this week.

The impact extended to logistics hubs like Castellón, which historically handled heavy goods traffic to Algeria. The blockade sharply reduced shipments of ceramics, enamel, capital goods, and manufacturing equipment. Trade figures show a 97% drop in sales: shipments to Algeria fell from 186.8 million euros in 2021 to 6.06 million euros in 2023 through November.

Overall, the ceramics and tiles sector faced a sluggish rebound. On January 24, Algeria banned the import of finished ceramic and marble products. Reports indicate the Tebboune government seeks to boost local production with protectionist measures that particularly affect Spain. The ABFE later ended its blockade of ceramic and marble imports, but the broader restrictions lingered for some time.

Algeria thaws its relationship with Spain amid broader regional tensions

The current diplomatic thaw began with a gesture from Spain after a period of strain, signaling a potential reset of bilateral ties. A formal invitation extended to Foreign Minister José Manuel Albares by his Algerian counterpart and the ensuing discussions have framed the latest stage of rapprochement.

Diplomatic thaw

Albares’ visit marks a turning point in the bilateral relationship. The Algerian government invited him to pursue a constructive dialogue, building on recent steps toward normalization. The move follows changes in Spain’s leadership and the new government lineup, which influenced Algiers to consider reestablishing channels and restoring ambassadorial presence. The decision to reengage is seen as a practical step in balancing regional interests and protecting national economies.

Analysts note two motivating factors for the shift. First, the belief that a protracted blockade would damage the Algerian economy. Second, Spain’s evolving stance on the Gaza crisis and its alignment with humanitarian concerns influence Algeria’s calculus. Algeria remains sympathetic to Palestinian civilians and has engaged in international forums to discuss the situation, while maintaining its position in regional diplomacy.