France-Algeria tension spark trade restriction fears

France’s government said Thursday it has no knowledge of potential Algerian trade restrictions but is monitoring the situation closely, amid diplomatic speculation about possible economic measures following recent tensions over Western Sahara.

The development comes as relations between Paris and Algiers have grown strained after France’s recent recognition of Moroccan sovereignty over Western Sahara, a territory that Algeria’s ally, the Polisario Front, seeks to establish as an independent state.

“We are not aware of such measures, but we are closely monitoring the situation of our companies in Algeria,” French Foreign Ministry spokesman Christophe Lemoine said during a regular press briefing Thursday.

Allegations of potential trade restrictions first surfaced when former French ambassador to Algeria Xavier Driencourt shared what appeared to be an official document on social media platform X. The Algerian Prime Minister’s office swiftly rejected these claims in an official statement, calling them “completely unfounded.”

Three diplomatic sources, speaking to Reuters on condition of anonymity due to the sensitivity of the matter, said Algeria has been tightening regulations affecting French businesses in recent months, particularly wheat exporters. The diplomats noted signs of possible targeted action against French trade, though no official confirmation exists.

The French daily Le Figaro reported that Algerian banks met on November 4 to discuss potential restrictions. However, French companies operating in Algeria contacted by Reuters said they have not received any new directives, and French officials reported no complaints from businesses about operational difficulties.

This situation echoes a 2022 incident when Algeria restricted financial transactions with Spain over Madrid’s position on Western Sahara, though major gas exports were exempted.

Despite current tensions, bilateral trade grew by more than 5% in 2023, according to French Finance Ministry data. Algeria’s hydrocarbon exports to France increased by approximately 15%, while French exports to Algeria decreased slightly by 0.5%.

The Western Sahara dispute has long been a source of regional tension. Morocco claims the territory as its own and seeks international recognition of its sovereignty, while the Polisario Front, supported by Algeria, advocates for independence.