In the 1960s and 1970s, Tunisia's chief exports were oil and mining products; after the 1980s, the chief exports became manufactured or processed goods. The export of textiles grew significantly in the 1990s and amounted to 43 percent of total exports in 1999. Olive oil, chemicals, shoes, and leather goods are also increasingly important exports. Given that the manufacturing industry is the largest, many intermediate goods such as textiles, machinery, and electrical equipment are needed in the process, and these materials have to be imported. The European Union, Tunisia's principal trading partner, buys 81 percent of Tunisian exports and provides 71 percent of its imports. France alone accounted for 26.3 percent of total Tunisian trade in 1999.
Tunisia has kept substantial large external trade deficits that have amounted to over US$2 billion since 1995. In 1999 the trade deficit stood at US$2.5 billion on exports of US$5.8 billion and imports of US$8.3 billion. These serious deficits are due to 5 main causes: a sharp drop in traditional exports such as crude oil and phosphates; Tunisia's need to import most of its capital equipment; the practice of converting raw and semi-processed imports into end products for re-export ; long-standing deficits in energy and agricultural trade balances; and an increase in disposable income that has led to a surge in the number of imports of consumer goods .
|Trade (expressed in billions of US$): Tunisia|
|SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.|
|Exchange rates: Tunisia|
|Tunisian dinars (TD) per US$1|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
Tunisia took steps toward free trade by joining the World Trade Organization (WTO) and by signing an association agreement with the European Union in July, 1995. Tunisia will have to increase its exports and put an end to its trade deficit, a daunting task given that Tunisian exports have very low value-added status (increase in the market value of a product at a particular stage of production). Plans are underway to solve this problem by encouraging the domestic manufacture of intermediate goods that Turkey is forced to import in order to produce goods for export. The government has implemented several measures to ease this process, such as doing away with the red tape that hampers exports and allowing exporters improved access to credit.