Spain Urges Businesses to Pivot to Morocco Amid Algeria Trade Crisis

For the first time since the change in position on the Sahara, the Spanish government acknowledges that it did not measure the consequences of this decision on trade relations with Algeria, its main gas supplier, which suspended the treaty of friendship, good neighborliness and cooperation with Spain in July. Now, the Spanish Executive wants to fall back on Morocco, believes El Independiente, specifying that the Ministry of Commerce has asked the country’s businessmen, affected by the crisis with Algiers, to "change countries" or turn to Morocco.

For the business community, this unilateral decision by Pedro Sanchez was just to "satisfy the demands of Morocco", without taking into account the consequences on relations with Algeria. Spanish companies with activities in Algeria have already accumulated losses of more than 600 million euros, say sources consulted, adding that the situation is getting worse. Spain’s exports to Algeria stood at 2.7 billion euros in 2021, compared to nearly 9.5 billion euros for exports to Morocco, according to data from the Spanish Ministry of Commerce, which shows the gradual decline in exports to Algiers.

During the high-level meeting between Spain and Morocco, held in Rabat on February 1 and 2, the two countries signed about twenty cooperation agreements in various fields and a financial protocol of 800 million euros to facilitate Spanish investments in the kingdom. The Spanish companies Talgo and Construcciones y Auxiliar de Ferrocarriles (CAF) have expressed their interest in the purchase by Morocco of 80 to 100 new trains with a speed of 200 km/h. Others could also position themselves on the Kenitra-Marrakech high-speed line extension project, just as Acciona could also build desalination plants in the kingdom.

For some businessmen, "the Covid-19 pandemic and the change of president" having contributed to a "significant cooling of the Algerian economy", are "the sole and main direct cause of the reduction in imports from Algeria in general and not specific to the Spanish market". Businessmen fear losing everything if nothing is done to normalize relations with Algeria. For its part, the Spanish government stresses that "trade interests with Morocco are more important than those with Algeria" and does not intend to take actions that "could compromise trade relations with Morocco".