In an era where economic fragmentation and protectionism have challenged global prosperity, a new vision for regional cooperation is emerging in North Africa. On 21 January 2026, leaders from Morocco, Algeria and Tunisia convened in Rabat to sign a landmark agreement establishing the North African Economic Cooperation Zone. This pact, two years in the making, represents a deliberate shift towards economic integration aimed at dismantling longstanding barriers to trade and bolstering collective growth across the Maghreb.
The establishment of this cooperation zone comes against a backdrop of global commitments to freer trade and deeper economic linkages. Across continents, policymakers have sought to reduce tariff barriers as a means of stimulating growth, enhancing competitiveness and fostering resilience in the face of economic shocks. Africa’s own continental framework, the African Continental Free Trade Area (AfCFTA), exemplifies this trajectory, with a commitment to eliminate tariffs on 90 per cent of tariff lines over five years, and to phase out remaining barriers subsequently.
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The most immediate and tangible component of the Rabat agreement is its phased tariff elimination plan. Participating states have committed to removing tariffs on the majority of goods traded among them over a five-year period. Analysts estimate that full implementation of this tariff reduction could lift regional GDP by approximately 3.7 per cent by 2030, offering a material boost to economic output and signalling a step-change in regional commerce.
This economic cooperation initiative is particularly striking given the political context in North Africa. For more than three decades, Morocco and Algeria have maintained a closed land border, in place since 1994 largely due to disputes over Western Sahara. The border closure has been widely regarded as a drag on bilateral trade and broader regional integration, with historic estimates suggesting millions of dollars in forgone economic opportunities due to restricted movement and commerce.
Despite these tensions, the Rabat accord signals a willingness among these governments to separate political disagreements from shared economic interests. Algerian President Abdelmadjid Tebboune described the agreement as a “pragmatic step forward”, emphasising that economic cooperation can proceed even amid unresolved political issues. Tunisian President Kais Saied framed his country’s participation as a strategic diversification of trade ties, reducing reliance on external markets and integrating Tunisian industry more deeply within a regional supply chain.
Creating a Unified Market, Expanding Economic Frontiers
At its core, the North African zone seeks to create a market of over 90 million consumers, with provisions that reach beyond simple tariff elimination. The agreement outlines a unified customs framework designed to harmonise regulatory standards across key sectors. This regulatory alignment is intended to reduce non-tariff barriers, such as divergent licensing, inspection and certification procedures, that often raise the cost of cross-border trade and slow the movement of goods.
Additionally, the pact establishes special economic zones along shared border regions. These zones aspire to catalyse investment and revivify areas long stifled by limited commercial interaction, potentially serving as hubs of manufacturing and logistics that attract both regional and international capital. European Union officials have welcomed the development, framing it as beneficial not only for North African prosperity but for broader stability across the Mediterranean.
The financial markets responded positively to the announcement. Morocco’s Casablanca Stock Exchange registered gains, rising by 2.1 per cent, while major regional banks and energy firms with cross-border operations recorded share price increases. These early market reactions reflect investor confidence in the long-term economic potential of a more integrated Maghreb.
The North African Economic Zone is not an isolated project; it is part of a wider constellation of trade liberalisation efforts. Globally, policymakers have underscored the importance of such frameworks. For example, the AfCFTA, now operational since 2021, sets a continental benchmark for tariff reduction and economic cooperation across 54 African Union member states, aiming to enhance intra-African trade and link regional markets into a more coherent economic bloc.
At the same time, China’s evolving trade policy underscores the significance of tariff liberalisation for global economic ties. In 2024, China extended zero-tariff treatment to all African countries with which it maintains diplomatic relations, encompassing 100 per cent of tariff lines for least-developed African states, a move intended to deepen African–Asian economic linkages and expand trade volumes.
Across Europe and Asia, trade agreements and investment treaties have similarly emphasised tariff reduction and regulatory harmonisation as cornerstones of economic collaboration. These parallel developments signal a global consensus on the catalytic role of reduced trade barriers, even as geopolitical rivalries and protectionist pressures persist.
Challenges and the Road Ahead
Despite the promise of the North African Economic Zone, substantial challenges to full implementation remain. Harmonising regulations across three distinct economies will require careful negotiation to ensure that standards are mutually acceptable to producers, consumers and regulators. Business associations have voiced concerns over the pace of regulatory alignment, particularly in sectors where domestic industries face competitive pressures. Meanwhile, labour organisations have cautioned that the rapid opening of markets might lead to job displacement in sectors ill-prepared to compete regionally.
To address these concerns, the agreement establishes a ministerial-level committee that will meet quarterly to monitor progress and troubleshoot emerging issues. Success will hinge on sustained political will and pragmatic governance as the initiative progresses through its initial five-year tariff elimination horizon.
The pact’s current membership excludes Libya and Mauritania, though both have been invited to participate as observers, signalling a potential path to expansion. Egyptian officials have also expressed interest in exploring deeper integration with the new bloc, which could extend economic cooperation eastward and further integrate North Africa into broader regional and transcontinental commercial networks.
The establishment of the North African Economic Cooperation Zone represents a milestone in regional trade policy. By committing to phased tariff elimination and regulatory harmonisation, Morocco, Algeria and Tunisia have taken a significant step towards economic integration that could fundamentally reshape the Maghreb’s economic landscape. While political and implementation challenges persist, the pact’s progress, set within a global framework that increasingly favours tariff reduction and economic openness, points to a future in which North Africa’s economies are more interconnected, competitive and resilient.
