Spain’s foreign policy moves have impacted trade with North Africa, especially with Algeria. Last year exports to Spain from Algeria dropped sharply, falling by 45.9 percent to about 1,021.2 million euros. This year, export figures barely reached 10 million euros, underscoring how political tensions in the regional business environment can accelerate a fragile recovery and demand urgent means to stabilize relations.
Data from the United Nations positions Spain as a leading global customer in 2021, with Algeria ranking just behind Italy for petroleum products. Yet in the following year, a shift in stance by the Spanish government, including high level discussions with Moroccan authorities, coincided with Algeria signaling a tougher approach. Officials in Algiers conveyed support for the Sahrawi autonomy proposal and halted certain cross-border trade activities with Spain, triggering a reevaluation of commercial ties.
Algeria’s decision to suspend the neighborly agreement and considerably block cross-border financial transactions disrupted payments and collections between companies on both sides. As a result, over twenty Spanish exporters launched proceedings to seek remedies against the state for losses tied to the Sahara policy change. Preliminary estimates place the total damage at well over 800 million euros. The Algeria-Spain commercial climate remains complex, with more than 600 Spanish companies maintaining an active export presence throughout neighboring markets and over a hundred countries worldwide.
Many view the Algerian government’s move as a significant misalignment with broad European and regional trade interests. In response, key European figures including Josep Borrell, the vice president of the European Commission and high representative for foreign affairs, visited Algeria in March to explore pathways for restoring normal tradeoperations. Despite these talks, tangible progress has been elusive. The impact has been pronounced in several sectors, notably the tile, paper, cardboard, and general manufacturing industries, which faced substantial setbacks as a consequence of restricted exchange and payment channels.
Effects
Industrial groups with global reach acknowledge that a near-term resolution is not visible, though they suggest that certain negotiation principles could help ease the blockade on specific assets. They warn that some shipments are stuck at the port of Algiers and that storage costs are driving some firms to consider abandoning orders entirely. Spare parts at factories have also faced delays, prompting Algerian companies to seek alternative suppliers from Italian and French markets due to the ongoing Spain-Algeria standoff. The longer the disruption lasts, the more distributors and customers in Spain and beyond will begin to diversify their sourcing, potentially eroding loyalty and market share. The CEO of Amec, Joan Tristany, emphasizes that the effects extend beyond immediate shipments, as distributors and customers start looking for other suppliers, diminishing the likelihood of quick returns when the situation stabilizes.
Industry lobbies have remained highly engaged in Brussels, pressing for solutions to the diplomatic and trade frictions tied to Western Sahara. Algeria has reportedly urged the European Commission to ease sanctions as part of a broader effort to resume normal business flows. The consequences touch both Algerian and Spanish companies, and there is a shared desire to resolve the dispute quickly so that bilateral commerce can regain momentum. Proposals for targeted support to Spanish firms facing constraints in Algeria are discussed as a possible way to alleviate the current pain while negotiations continue.
Industries and companies
Spain’s principal exports to Algeria comprise paper, cardboard, and finished goods, totaling around 185 million euros, along with oils worth about 156 million euros, machinery and mechanical devices near 144 million euros, tannins and dyes close to 105 million euros, and plastics around 103 million euros, according to DataComex. The Spanish corporate footprint in Algeria spans a wide spectrum, from major energy players such as Naturgy, Repsol, Cepsa, and Iberdrola to engineering and services firms like Indra, Técnicas Reunidas, Sacyr, and Acciona involved in refinery projects and desalination plants. Other firms with extensive regional presence include Vicky Foods, Cinfa, Gallina Blanca, and construction groups FCC, Ortiz, and the Cobra group. Industrial and service providers such as Omega elevators and Amadeus in tourism technology also have a presence. Financial institutions like Mapfre, Axa, Sabadell, and CaixaBank maintain operations in Algeria as well. Some Spanish companies pursue a multi-national strategy, selling through subsidiaries located in other countries to maintain access to the Algerian market. The broader strategic outlook points to a greater emphasis on expanding exchanges with Morocco in the future, with Algeria remaining cautious and focused on achieving a stable, predictable trade environment.
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