Spain-Algeria Trade Tensions Emerge Amid Diplomatic Pressure
Spanish companies active in Algeria have not hidden their concerns as tensions rise. A policy shift from Algeria, driven by diplomatic friction over Spain’s stance on Western Sahara, has complicated business. Last week Algeria announced the termination of a bilateral friendship agreement and froze direct debits for trade with Spain, a move tied to Madrid’s support for Morocco’s Autonomy Plan.
Despite pushback from the European Commission that helped prevent a full suspension of bilateral trade, many firms report ongoing restrictions. Several companies say exports to Algeria are being blocked unless a formal order reverses the direct-debit ban, a reversal that has not yet occurred. The overall climate is uncertain, and business leaders worry that the diplomatic dispute could widen if no resolution is reached.
Sources indicate that export fees were collected up to June 9, the date Algeria ordered the trade blockade. Activity after that point appears to have stalled. The Ministry of Industry, Trade and Tourism says the real impact on bilateral trade is still being assessed and urges caution until there is reliable clarity on the situation.
Algeria continues to guarantee gas supplies to Spanish firms, but other sectors, especially those tied to export activities, face ambiguity. The CEOE has launched a series of outreach efforts with key companies and industry groups in affected sectors—such as beef, energy equipment, and water treatment—to gather specific data on the challenges faced. This information will be shared with the Spanish government to illuminate the commercial effect of the diplomatic crisis.
For business leaders, collecting this intelligence is essential to enable government action and address the particular problems that arise. The CEOE is calling on the government to engage decisively to resolve the diplomatic issue and remove barriers to bilateral trade. At the same time, it seeks to involve the European Union in a broader effort to ease tensions.
CEOE representatives describe a strong network of influence in Brussels and emphasize their aim to bring EU institutions into the discussion to help broker a resolution between Algeria and Spain. They stress that EU-level engagement could shape a more favorable outcome for commercial relations and minimize disruption to firms operating in both markets.
The European Commission confirmed on Monday that it continues to engage with parties to clarify the situation. Brussels warned last week that it stands ready to counter coercive actions against an EU member state if necessary. For now, the Commission is pursuing a cautious, dialogue-centered approach, offering support to resolve the dispute and urging dialogue between Spain and Algeria. The Spanish government has indicated it will turn to EU channels if bilateral trade agreements are breached, signaling a preference for a diplomatic, multilateral path to de-escalation.
The potential impact of freezes on wire transfers and broader trade could be significant for the Spanish economy. Trade data from earlier years shows substantial flows between the two countries. From January to July 2021, Spain imported 2,237 million euros from Algeria, while imports from Spain to Algeria reached 1,111 million euros. The 2019 figures also reflect large values traded before the pandemic interrupted many normal economic activities, underscoring the potential scale of disruption if trade paths remain blocked or restricted.