Concerns grow as Tunisia draws closer to controversial deal with EU

With elections before the end of the year, it is unlikely Chahed will finalise an agreement that can be easily assailed by political rivals.
Sunday 19/05/2019
European Commission President Jean-Claude Juncker (L) and Tunisian Prime Minister Youssef Chahed during a joint news conference in Tunis, last October. (AP)
Timing concerns. European Commission President Jean-Claude Juncker (L) and Tunisian Prime Minister Youssef Chahed during a joint news conference in Tunis, last October. (AP)

TUNIS - Tunisia is moving towards a far-reaching but controversial economic accord with the European Union, its key political and commercial partner.

Facing a protracted economic and political crisis, Tunis is hoping to sign a deal with the European Union before the end of this year, when parliamentary and presidential elections will test Tunisia’s democratic transition. Negotiations between the two sides began in 2012.

However, as the government moves closer to signing the Deep and Comprehensive Free Trade Area (DCFTA) agreement with the European Union, trade unions, business groups and rights activists said they are wary about the implications for local labour, farmers and small businesses.

While experts agree it is necessary for Tunisia to further integrate its economy with the European Union, which has some 500 million consumers, many fear that foreign competition would drive local products out of the market.

Pharmacists point to higher prices for medicine, farmers say they fear to lose their land and consumers are afraid neighbourhoods will be deprived of small shops catering to local needs.

Faycal Tebbini, a populist member of parliament, accused the European Union of seeking “to turn Tunisia into a colony again” through DCFTA. “If the head of the government, Youssef Chahed, signs the DCFTA accord,” Tebbini said, “I will consider this as an act of great treason for which he is to be executed by a firing squad on Avenue Habib Bourguiba in Tunis in sight of all Tunisians.”

“Tunisians, wake up!” he added. “You will be starving. The time will come for you to pine for bread leaves because Europeans will grab your land as they have the strong currency and deep pockets to buy it.”

Experts said Tunisia should seize a promising economic deal that would open the country to a lucrative market, especially while the European Union is in talks for similar accords with the United States and Japan.

They point out that Tunisia’s strongest period of economic growth was right after a trade association agreement with the European Union in 1995, which added more than 100,000 jobs to the country’s manufacturing sector.

The Tunisian government is hoping the more ambitious DCFTA deal will better integrate the country’s agriculture and service sectors into the global economy and improve value and productivity.

Still, there have been strong objections voiced. Disparate social movements and rights groups have drafted a common manifesto against the deal.

The signatories, which include the communist Workers’ Party, the Islamist-dominated farmers union, the powerful Tunisian General Labour Union, the Tunisian Human Rights League, Amnesty International’s Tunisia branch, the Arab unionist Popular Current and two other civil associations, say the deal would have a severe effect on “the national economy, especially sensitive sectors like farming, services, natural resources and energy.”

Many experts conceded that the deal would have negative repercussions on certain sectors, especially agriculture, which was left largely undeveloped in the 1960s and 1970s.

“The thinking of the modernising leadership of the time has rural areas… carrying traditional and conservative ideas totally opposed to ideas of progress and modernity,” said former Finance Minister Hakim Ben Hammouda, adding that there has been “falling investment in the farming sector, less subsidies and policy of low prices.”

The government, however, promised to enact “guarantees for the farming sector,” which it said is in need of “upgrading.”

“We are aware that 16% of the population is employed by farming,” a government statement said. “Small farmers will have no chance in the face of powerful competition from the European Union.”

Chahed, Tunisia’s prime minister, speaking May 12 also vowed that he would not sign an agreement “at the expense of farmers and fishermen.”

“Any deal will take into account the gap in development between Tunisia and the European Union,” he added.

With elections before the end of the year, it is unlikely Chahed will finalise an agreement that can be easily assailed by political rivals, especially if he, as is expected, runs for president.

Hence, it is unknown when the trade deal will be finalised. Some experts said that with discouraging economic indicators — the country’s trade deficit is projected to grow to $8 billion by the end of the year — it should wait until the economy is more stable before going through with a deal.

Others, however, said the government should push a deal through quickly, arguing that Tunisia needs economic reforms, including in the agricultural sector, with or without the EU deal.

Economist Houcine Ben Achour said the deal “is inevitable” but that it “is not for now.”

“Tunisia cannot escape the DCFTA… Every big change causes worries even when big gains are lying ahead,” he said.

European experts Werner Raza, Jan Grumillerand and Bernhard Troster urged the European Union to avoid “overburdening” Tunisia with demands ahead of any deal.

“Although in Tunisia there is in principle sympathy for intensified relations with the EU, frustrations with respect to the DCFTA are widespread,” they said. “This would require it (the European Union) to be responsive to short-term needs and to avoid overburdening the partner’s capacities with an extremely ambitious negotiation agenda.”