Free trade agreements provide an appropriate framework for the development of a true partnership to strengthen the relations and cooperation between Tunisia and many countries in order to boost investment and develop trade.
Director General of the Foreign Trade Observatory, Lotfi Khedher tells us about trade with this area in the first seven months of 2011 and offers his suggestions for the future.
What about Tunisia’s foreign trade in the framework of the various free trade areas?
Initially, it is important to remember that about 75% of the foreign trade made in the first 7 months of the year took place as part of the free trade agreements concluded by Tunisia
with different countries.
This framework includes 86% of exports and 67% of imports of Tunisia.
Can you analyze the situation of exports in this context?
It is important to remember that exports posted a growth of 14.3% in the 7 months of
the current year. This is due mainly to the considerable improvement in exports to the EU which account for 77.8% of exports. For this area, Tunisian exports achieved a growth of
17.5%. However, a decline of 9.5% was recorded in exports to countries outside the EU.
So how can you explain the evolution of the trade balance in this area?
In terms of export, we have achieved a growth of 10.2%, mainly due to the 14.3% increase of exports in the free trade area to reach 12,966.7 MTD. However, a certain decline was recorded outside the free trade area to reach 226.1 MTD, i.e. a drop of 9.9%
I take this opportunity to remind of the 3% increase recorded by the export sector in the first seven months of 2011. This growth is explained mainly by increased imports from outside the free trade agreements, to achieve 6,237.4 MTD, i.e. 15.4%.
Yet, a slight decrease of 1.8% was registered in the framework of Free Trade Agreements to stand at 12,910.7 MTD.
How do you explain the 16.1% decline in the trade deficit?
This decline is the result of the change in the configuration of the trade balance and where we moved from a deficit of 1,805.7 to a surplus of 56 MTD, i.e. an improvement in spite of the worsening of the trade deficit estimated at 1,058.1 MTD with countries outside the free trade zone.
Can you detail these figures?
It’s very simple. It is an improvement in the trade balance with the EU, reaching 1,837.7 MTD in the 7 months of 2011 compared to the same period in the previous year, i.e. 1,538.4 MTD.
The surplus of the Arab Maghreb Union (AMU) has doubled, to reach 651.5 MTD against 328.5 MTD. This is the same with the Arab free zone where the surplus has improved
considerably from 149.4MTD to 368.7MTD. However, there has been a decline in the trade balance in some countries.
For Russia, a worsening in the trade deficit of 237.3 MTD was recorded. It reached 1,029.5 MTD in the first 7 months of 2011 compared with 792.1 MTD during the same period of 2010, under the effect of petroleum products.
For the United States, a worsening of the deficit has been posted, reaching 201.7,
from 268.1 MTD to 469.8 MTD in the first seven months in 2010 due to the import of grain.
Regarding Turkey, petroleum products led to a worsening in the trade deficit reaching 420.8 MTD in the first seven months of 2011 against 574.5 MTD during the same period of 2010.
For China, a worsening in trade deficit was recorded. It reached 44.5 MTD from 1,045.9 MTD in the first seven months of 2010 to 1,090.5 MTD until late July 2011.
For countries of EFTA (European Free Trade Association), a decline in trade balance has been posted in this zone to reach 41.5 MTD. This is explained by lower exports of crude oil.
The free trade agreements should contribute to improving national competitiveness,
business environment and foreign trade.
Tunisia is called to improve this environment to ensure more foreign investment and then
promote foreign trade figures.
This can be done only through agreements of mutual understanding, since reference prices do not represent an advantage given the low rate of customs duty. For example, the weighted average for trade in 2007 for customs duty in Europe does not exceed 3%.