Faced with limited foreign currency resources due to the blockage of foreign financing, the Tunisian state is called upon to focus its efforts on its domestic front through the control of the external balance of payments deficit and the trade balance, especially with China and Turkey, economists and professionals recommend.
The trade deficit with these two countries, which benefit from trade agreements to the detriment of Tunisia, amounts to nearly 2.7 billion dinars out of a total of 3.8 billion dinars of the country’s overall deficit.
This situation is not new, especially since the indicators of the National Institute of Statistics (INS) for the year 2022 showed that the value of Tunisian imports from Turkey reached, in November 2022, nearly 4.7 billion dinars, while Tunisian exports to this country did not exceed one billion dinars.
Tunisia’s trade deficit with Turkey increased to 3.6 billion dinars, exceeding the country’s total net external financing during 2022, estimated at 3.4 billion dinars, according to the latest data from the Ministry of Finance published in its latest report on the execution of the state budget for February 2023.
The issue of Tunisia’s trade deficit with China and Turkey has been the subject of several studies, including one prepared by the Tunisian Observatory of the Economy and published on January 25, 2022.
This study showed that this deficit has exhausted the country’s foreign exchange reserves and constitutes a real threat to local production.
The observatory also showed a downward trend in Tunisian imports to the European Union (EU) country in favour of China, Turkey and other countries. However, the question that arises concerns the impact of these imports on the country’s economy.
According to the observatory, the occupation of China and Turkey of advanced ranks in the ranking of supplier countries of Tunisia threatens a number of sectors, which are still losing their share of the domestic market.
// UTICA calls for cancellation of unfair conventions
The Tunisian Confederation of Industry, Trade and Handicrafts (UTICA) stressed that the reform must be based on integrated scientific approaches.
It called in this sense to avoid wasting more time and resources and to stop the excessive recourse to external debt for consumption needs to the detriment of investment.
The employers’ confederation warned against the excessive recourse to imports of what the country is capable of growing or manufacturing locally as well as against the carelessness and lack of firmness in the face of the extent of the informal sector to the detriment of the organised sector and structured companies.
It is also essential, according to UTICA, to remove all obstacles to the freedom to work and produce, to support the private initiative and facilitate the launch of productive projects with a view to achieving one project creator per family, in order to alleviate the burden of unemployment, revive economic activity and create a new societal dynamic.
The demands of UTICA are based on the diagnosis of the domestic market, which is experiencing a wide spread of consumer products sold in informal channels, which often imitate Tunisian products. These products include clothing, cosmetics and kitchen utensils.
For observers of the Tunisian market, Turkish products are an imminent threat, especially as the market is expanding.
Requests have already been made to revise the Tunisian-Turkish agreement in terms of trade in products and goods given the deficit recorded in Tunisia’s trade balance, in addition to the scenario of smuggling and money laundering under cover of these products.
// Turkish imports: incomplete official figures
Tunisia’s foreign trade figures published by government authorities, such as the Ministry of Trade and the INS, lack precision in the details of trade in products with each country. However, many accredited international databases provide accurate trade statistics for both Tunisia and other countries in the world.
In this context, statistics and data from the website of the International Trade Centre (a joint agency of the World Trade Organisation and the United Nations) show that according to the latest updated data for the year 2021, trade between Tunisia and Turkey mainly concerns products exported to Tunisia for a value of 1189.5 million dollars (the equivalent of 3449.6 million dinars (MD), against Turkish imports from Tunisia which do not exceed 230.2 million dollars (the equivalent of 667.6 MD), which means that the trade deficit of Tunisia’s trade with Turkey is about 2862 MD.
According to the Global Trade Item Number (GTIN) of products, Tunisia imports from Turkey, in particular, textile/clothing products ($285.2 million), manufactured equipment ($240.7 million) and various consumer products.
While Tunisian exports to Turkey, according to International Trade Centre data, are mainly fertilisers ($72.5 million) and chemicals ($60.4 million).
However, these figures remain largely incomplete, given that most imports from Turkey are imported outside the structured channels.
On the other hand, a large number of Tunisians travel to Turkey for “tourism” but actually load Turkish goods after paying their value in Turkey to the parties that complete all the procedures for exporting them to Tunisia.
Franchise companies also contribute to importing large quantities of Turkish goods. There are practically no precise figures on the activities of these companies and their transactions despite their important and growing presence in the Tunisian market for years.
//Low-quality goods and money laundering channels
Turkish imports do not generally meet Tunisian industrial standards, in addition to the behaviour of many Turkish industrialists who deliberately change the origin of products exported to Tunisia, which are mostly Chinese products in most cases, in order to take advantage of the customs benefits and exemption privileges granted under the 2004 Turkey-Tunisia trade agreement, which was revised with a view to the complete dismantling of customs duties on Turkish imports into Tunisia in 2013.
The analysis of the statistical data shows that the volume of Turkish goods that flowed to Tunisia, during the year 2021, amounted to 931.9 thousand tonnes in weight, with a value of 3396.4 million dinars, which means that each kilogram of Turkish goods exported to Tunisia costs 0.3 dinars.
According to this data, Turkish goods are supposed to be made up of raw materials, equipment and heavy equipment, whereas the goods sold in Tunisia are mainly light consumer products consisting mainly of textiles, clothing, household plastics, decoration materials and some simple food products.
This situation is most probably explained by the fact that some suppliers resort to inflating the value of imports from Turkey in the framework of partnership relations they have with Turkish companies, which is considered as smuggling and money laundering operations in the framework of illegal financial flows.
According to a report published by the Tunisian Observatory of the Economy (OTE) at the end of 2019, Tunisia is the first Arab country to have recorded financial flows that entered illegally, i.e. a rate of 16.2% in relation to the total volume of the country’s foreign trade, excluding oil products.
In this context, the United Nations Economic and Social Commission for Western Asia (ESCWA) conducted a study on illegal financial inflows in the Arab world.
This study reveals that these illegal funds come from organised crime which is difficult to quantify, but the largest proportion of quantifiable illegal flows come from the system of invoice manipulation in foreign trade for each country.
/Reform efforts without results
Tunisia hosted, on October 12 and 13, 2022, a meeting at the level of experts with Turkey to examine several issues related to trade relations, including mainly the imbalance of the trade balance between the two countries in favour of Turkey, recorded since the entry into force of the trade agreement between the two countries, despite the implementation of Article 17, which stipulates an increase in customs duties on consumer products of Turkish origin (list 2 in the annexe to the agreement).
This measure concerned only 20% of the total imports of consumer products. This meeting did not produce any results. This meeting took place in the wake of the Moroccan government’s adoption at the end of 2020 of the revised free trade agreement with Turkey, where Morocco and Turkey agreed to impose tariffs for 5 years on a number of Turkish industrial products, reaching 90% of the value of applied tariffs.
The agreement also provided that the Moroccan side would not apply any other duties on Turkish imports except those provided for in the free trade agreement between the two countries.
In 2015, Egypt revised the free trade agreement with Turkey by amending some articles related to the commercial passage of Turkish goods into the country.
Source: Agence Tunis Afrique Presse