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Tunisia could cancel trade agreement with Turkey

tunisia turkey flags
Flags of Tunisia and Turkey

Tunisia is seeking an urgent review of a trade agreement with Turkey in order to cut a widening deficit, two Tunisian trade ministry officials said on Friday.

Nabil Arfaoui, director of cooperation with Europe at the trade ministry, said the negotiations with Turkey would be open to amending the agreement or even cancelling it.

The deficit has been one of the main problems facing Tunisia as it grapples with an unprecedented economic crisis.

In 2005, Tunisia and Turkey signed a free trade agreement as part of efforts to strengthen relations between the two countries.

However, according to official sources, thousands of jobs, especially in the textile sector, have been lost in Tunisia as a result of Turkish dumping of textile products through the formal and informal trade sectors.

The government has not acted to stop Turkish exporters selling goods that are not supposed to be covered by the agreement such as agricultural products and foodstuffs.

Tunisia’s trade deficit rose by the end of July 2021 to reach DT 8.7 billion ($3.09 billion), compared with DT 7.5 billion during the same period in 2020, the state Institute of Statistics said this week.

The North African country’s trade deficit with Turkey amounted to $900 million, which represented the third largest trade deficit for Tunisia after China and Italy. Tunisia’s trade deficit is a pressing problem at a time when the country is in an economic slowdown, and struggling with the pandemic.

Tunisia imports textiles, cosmetics, and electrical and mechanical products from Turkey, while Tunisia mainly exports phosphate, dates, seafood and pastries, according to Hachicha.

The free trade agreement provides for exemption from customs duties only on industrial products traded between the two countries.

Saida Hachicha, the head of Trade and Economic Cooperation, said it was likely that the meeting would be held in September.
Tariffs were revised upwards in 2018 on a list of products imported from Turkey, but this did not yield results in terms of lowering the trade deficit, he said.
“We hope that there will be concessions from both sides in order to reach an agreement,” she told Reuters.

($1 = 2.8114 Tunisian dinars)

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