France says unaware of Algerian trade curbs as tensions build

France said on Thursday that it was not aware of any official measures imposed by Algeria on its imports and exports, but would keep a close eye on the situation as diplomatic sources suggested Algiers may be preparing trade restrictions.

Ties between Paris and Algiers have worsened in recent weeks since France recognised Morocco's sovereignty over the disputed territory of Western Sahara, which Morocco wants the international community to recognise as Moroccan.

The decision angered Algiers, which backs the Polisario Front that is seeking an independent state.

"We have not been made aware of such measures, but we are closely watching the situation for our companies in Algeria," France's foreign ministry spokesman Christophe Lemoine told reporters at a weekly news conference.

According to three diplomats, there has been a concerted effort in recent months by Algeria to toughen the business environment for French firms, including wheat exporters.

The diplomats said there had been some signals in recent days that Algiers may look to specifically target French imports and exports, although there had been no official confirmation at this stage.

Algerian officials did not respond to Reuters' requests for comments.

BANKING SPAT

In 2022, Algeria's banking association ordered the end of payments to and from Spain after an official trade ministry directive, although it exempted key gas exports.

That rift, which has since calmed, was also over Madrid's stance on Western Sahara.

French daily newspaper Le Figaro newspaper reported on Thursday that the banking association in the North African country had met banks on Nov 4. and informed them of a potential measure.

Two diplomats told Reuters they were aware of that meeting, but cautioned that the association could not take such a decision unilaterally.

Several French companies operating in Algeria contacted by Reuters said they had not received any new directives and French officials said at this stage no companies had approached them with any specific difficulties.

Grain traders have reported that Algeria overlooked France in wheat tenders last month due to the diplomatic tensions, though Algerian state grains agency OAIC said it treated all suppliers fairly and applied technical requirements to cover its import needs. [GRA/TEND]

The reported trade obstacles echo a diplomatic dispute three years ago that led to France being sidelined from its former colony's wheat tenders for months.

Trade between the two countries grew more than 5% in 2023 with hydrocarbon exports from Algeria to France increasing about 15%, although imports to Algeria from France dropped 0.5%, according to the French finance ministry.