Agri-Food Sector, Trade and DCFTA in Tunisia

Since its independence, Tunisia has considered agriculture as a key sector for its economic development and a national priority. Nevertheless, since 1996, the agri-food sector share in the gross domestic product (GDP) has decreased sharply from about 16 to 9 percent in 2014 (Fig. 12.1).

In spite of the aforementioned reduction, agriculture remains one of the driving forces of economic and social development in Tunisia. The Tunisian agriculture is the only source of income for nearly half of the rural labor force (45 percent) (African Development Bank 2012). Agriculture employs between 16 and 20 percent of the total active population (INS 2014).

Tunisia has undergone a revolution and is experiencing a long democratic transition, which leads to much economic turbulence, such as trade deficit. Five years after the Tunisian revolution, the trade deficit has rapidly increased from —8603.5 to —12047.4 MDT in the period 2011—2015 with an average annual growth of 8.78 percent (Table 12.1).

The agri-food balance follows the same trend of trade deficit. It can be explained by the strong increase in domestic demand. In the period 2005—2013, the gap between imports and exports grew. The persistence of a deficit in agri-food trade endangers food security in Tunisia as it raises the dependence on international markets (Fig. 12.2).

Tunisian agri-food exports are highly dependent on few commodities, being olive oil and dates considered as flagship products. Indeed, Tunisia is an international leader in exporting olive oil and it has the highest

Fig. 12.1 Agriculture value added share in Tunisia's GDP (%) (1980-2014). Source: Authors' elaboration (World Bank, World Trade Indicators (WTI)) 2016

Table 12.1 Tunisian Trade balance 2011-2015

market share in exporting date to the international market. In 2014, the agri-food export is composed mainly of olive oil (484,35MDT); fruits (509, 82MDT, of which 388,43MDT of dates) and fish and crustaceans (231,45MDT). Olive oil, dates and fish exports represent together about 50 percent of the value of Tunisian agri-food exports (Table 12.2).

These products are an important source of foreign currencies, which can help considerably to compensate the country’s cost of seed oil imports and other primary products such as cereals (Sai and Msallem 2005). Indeed, Tunisian imports of cereals and seed oils in 2013 represented about 50 percent of its agri-food imports (Table 12.3).

Fig. 12.2 Evolution of Tunisian's Agri-food imports and exports (1993-2015). Source: Author's elaboration (INS) 2016

Table 12.2 Structure of agri-food exports (%) 2009-2014

To date, the EU is by far Tunisia’s main trade partner in agri-food products, although reciprocity is not the case given the size of the country in comparison with the EU. In 2014, Tunisia imported 50.7 percent of its agri-food needs from EU countries and exported over 40 percent of its exports to the EU. These exports experienced a growth rate of over 62 percent from 2001 to 2014, whereas imports grew at an estimated average annual rate of 15 percent (see Fig. 12.3).Trade preferences given to MPCs by the EU do not impact on the export dynamics but reinforce the traditional trade pattern of these countries with the EU. In fact, there has been a limited impact of the Barcelona Process on agricultural trade (Abis 2011; Garcia Alvarez-Coque and Martinez 2016).

Fig. 12.3 Evolution of Tunisia's agri-food imports and exports from the EU (2001-2014). Source: Authors' elaboration (ITC) 2016

Table 12.3 Structure of agri-food imports (%) 2009-2013