Tunisia Hosts 7th Meeting of Russian-Tunisian Intergovernmental Commission
May 23, 2019
Tunisia's capital city has played host to the 7th meeting of the Russian-Tunisian Intergovernmental Commission (RTIC), which was held on April 24-26. The Tunisian delegation was headed by Tunisia's trade minister Omar Behi, while Russian Deputy Prime Minister Vitaly Mutko led the Russian side.

"In Russian-Tunisian relations," said Vitaly Mutko, "entrepreneurs now play a major role. Both political will and business interest are there. That is why Russian investments in Tunisia should increase. Both parties are interested in it." As of April 2019, only 9 Russian companies were operating in Tunisia. Their total investments are estimated by the Tunisian side at 20 million dinars ($6.8 million).

Tunisia needs Russian investments, as 75% of foreign investments in the country come from the EU. Tunisia's signing of the African Continental Free Trade Area Agreement in March 2019 marked a step towards diversification of its foreign relations. According to Omar Behi, Tunisia is ready to enter into similar agreements with Russia. Following the RTIC meeting, the Tunisian trade minister told reporters that Tunisia intends to begin negotiations with the Russian side on a preferential trade or a free trade agreement, which can also be applied to the Eurasian Economic Union.

High import duties on products from Russia hinder the country's export to Tunisia, for example for the automobile industry. For several years now, Russian truck and engine manufacturer KAMAZ has been showing interest in the local market. The company has recently signed a partnership agreement with one of the leaders of the local specialized equipment market. KAMAZ is also working on finding partners for assembly operations focused on North African markets.

On the other hand, "high export duties on food products from Tunisia to Russia dramatically reduce possible supply volumes," – Lassaad Trigi, expert at RA Vision, vice president of the Russian-Tunisian Business Council and Tunisian entrepreneur. Lassaad's company supplies olive oil to Russia, but through Italian intermediaries: there is no tax for Tunisian exports to the EU.

Abdelaziz Makhloufi, CEO of CHO Group and an expert at RA Vision, notes the importance of Tunisia's possibility to access Russian credit resources. Now, for example, Tunisia is seeking opportunities for a $500 million loan. Negotiations with the International Monetary Fund are underway. In June 2018, the IMF approved but did not issue the loan. Tunisia is also having talks with the Russian side. Unfortunately, there are no well-functioning loan facilities for countries interested in Russian products, if it is not about major contracts for military-technical cooperation or Rosatom State Corporation.

Even in the absence of credit support, Tunisia comes 4th among African countries in terms of the volume of Russian imports. Although in terms of GDP, the country is in the middle of the second ten African countries. According to the Federal Customs Service of Russia, imports in 2008-2019 reached about $4.7 billion. Deliveries through third countries were not considered. Unlike Egypt and Algeria (the largest and second largest importers of Russian products in Africa), Tunisian imports have almost no military technical component, which means that it is less dependent on the political environment.

The parties noted some positive changes in trade and the economy: trade turnover between Russia and Tunisia in 2018 reached $820 million, which is 60% more than in 2017. According to official forecasts, the year 2019 will mark record mutual trade indicators.

According to estimates by the head of the Tunisian Export Promotion Centre, Mohamed Lassaad Labidi, investment in education can become a driving force for bilateral relations, including learning Arabic, Russian and French. As of April 2019, over 1000 students in 11 regions of Tunisia were studying the Russian language. Russian is taught in the departments of Russian philology at several universities in Tunisia. In Russia, students study Arabic in the departments of oriental studies, international relations, and foreign regional studies. Despite already-existing inter-university agreements, Russia and Tunisia have no exchange programs or joint educational programs.
Participants at the Russia-Tunisia business forum also pointed out the need to make it easier for Tunisian entrepreneurs to enter Russia and do business there. For now, only single-entry business visas are being issued and obtaining such visas require considerable time, thereby weakening the intensity of business contacts.

''Boosting trade volume to $1 billion and increasing the number of Russian tourists in Tunisia to 1 million people is the priority for bilateral cooperation in the next two years," said Deputy Prime Minister Vitaly Mutko. According to him, Russia is set to direct major investments to infrastructure and oil and gas sector. Education, energy, transport (including railway, air, and sea) and pharmaceuticals are other promising areas of cooperation between the two nations.

The 8th meeting of the Russian-Tunisian Intergovernmental Commission will be held in Kazan, the Republic of Tatarstan. Before then, the parties are scheduled to meet on the sidelines of the Russia-Africa Summit in Sochi.

Vera Moshkova