Tunisia Foreign Policy and Trade

Tunisia Foreign Policy and Trade

Foreign policy

Tunisia maintains good relations with both European states and neighboring Arab states. However, the influence of the Gulf states, for example through the financing of non-governmental organizations, is being viewed critically.

While Tunisia is at best a transit country for refugees on the way to Libya, from where many flee to Europe, the situation in the neighboring country also threatens the stability of Tunisia. The country tries to be neutral in its criticism of Libya. President Saied has spoken out in favor of an inner-Libyan solution on several occasions.

Experts predict a shift in the flow of refugees to Tunisia. However, the vast majority of migrants who set sail from Tunisia are still Tunisians. The USA and Germany in particular work together with the Tunisian security forces in the area of security and border security.

According to ezinereligion, Tunisia is a member of the Arab League and the African Union, the Mediterranean Union, Euromed and the European Neighborhood Policy. Since autumn 2015 Tunisia has been negotiating a free trade agreement with the EU, which, among other things, should also include agriculture, which was excluded from previous negotiations. In a resolution of September 2016, the EU defined a number of political and socio-economic reforms that it considered essential.

The Arab Maghreb Union, the establishment of which Tunisia had strongly promoted, is currently largely on hold due to the tensions between Morocco and Algeria over the Western Sahara. Its Secretary General is the former Tunisian Foreign Minister Taieb Baccouche.

Germany and Tunisia have had diplomatic relations since 1957 and cooperate primarily in the areas of environmental protection and economic development. Germany passed a special program after the revolution.

In 1982 the PLO moved its headquarters to Tunis (until 1991). On October 1, 1985, the Israeli Air Force bombed the headquarters in Hammam Chatt, a suburb south of Tunis. At least 60 people died. The attack was in response to the murder of three Israelis in Cyprus, for which the PLO had taken responsibility. After rapprochement between the two countries in the 1990’s, President Ben Ali broke off all diplomatic relations with Israel with the beginning of the second Intifada in 2000, but most of the newly founded parties are striving to normalize relations.

Trade

With the increasing liberalization of the economy, Tunisia passed uniform investment guidelines in 1993. Since then, more than 1500 export-oriented joint ventures have set up in the country. You benefit from the proximity to Europe and comparatively low wages. They enjoy tax exemption for ten years, but are currently only allowed to sell 10% of their products in the country themselves, which repeatedly leads to unnecessary exports and re-imports, for example with packaging material. In 2016, a new investment law was passed, which aims to make investments easier and reduce bureaucracy. The still existing tax exemption for offshore companies is intended to attract foreign investors, however, is criticized by some Tunisian economists as well as the EU.

Tunisia maintains the closest trade relations with Europe. The main exports are textiles, agricultural products and chemicals as well as electronic devices. The export volume in 2017 was around $ 11.36 billion US. In addition to textiles, the main imports are machines, chemicals, energy and food. The import was around $ 16.52 billion US in 2017.

The Tunisian government is currently negotiating an extension of the trade agreement (ALECA) with the EU, which would have far-reaching effects on the Tunisian economy. The agreement is massively criticized by the trade union federation UGTT and parts of civil society. In 2019 Tunisia joined the East African Economic Zone Comesa. Compared to Morocco, however, the country has little presence on the sub-Saharan African market.

Tunisia has a stock exchange in Tunis, which is controlled by a state supervisory authority. Almost 60 companies are listed on the stock exchange. The government offers tax breaks to companies that are listed on the stock exchange.

Tunisia Foreign Policy and Trade

German-Tunisian trade relations

Around 250 German companies and those with German participation exist in Tunisia. They provide around 50,000 jobs, primarily in the electrical engineering and textile sectors. In 2017, direct investments in Tunisia were around EUR 26 million, and exports were around EUR 9.9 million. The main exports were machines, cars and car accessories. In the same year, Germany imported textiles, crude oil, electrical engineering and other products from Tunisia for around 795 million euros. According to a survey by the German-Tunisian Chamber of Commerce and Industry, most German companies based in Tunisia made additional investments in 2019.