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International Monetary Fund
This Selected Issues paper for Algeria analyzes the potential economic impact of Algeria’s Association Agreement with the European Union (AAEU). The paper lays out the major elements of Algeria’s AAEU and makes a comparison with other AAEUs. It discusses the potential economic implications (costs and benefits) of the agreement, and elaborates economic policy issues and challenges. The paper also takes stock of Algeria’s business climate as the authorities consider the use of the fiscal space created by higher hydrocarbon revenues to tackle Algeria’s jobs challenge.
International Monetary Fund

from diagonal or full cumulation of origin in their trade with the EU. Liberalization of services and right of establishment 17. The main weaknesses in the Algerian AAEU are the absence of the right of establishment and the limited commitment to liberalizing services . All other Mediterranean countries have included the right of establishment and liberalization of services in their respective agreements. The exclusion of the right of establishment could be an obstacle for potential foreign investors. The experience of the Central and Eastern European