• Tunisia is a small and politically stable country on the North African coast. It has the most diversified economy in the region. With a population of slightly over 10 million, it has one of the highest standards of living on the continent. The country does not have vast reserves of hydrocarbons like its neighbors Algeria and Libya, but has prospered under long-standing government policies to develop manufacturing, tourism, and agriculture. At the same time, social programs limit population growth, provide a high standard of education, and ensure a relatively decent standard of living for all. The 74.3% national literacy rate is one of the highest in the Middle East, and the 2006 average annual income per capita reached $2,800. The International Monetary Fund projected that the 2007 per capita Purchasing Power Parity (PPP) was $9,630.
• The Tunisian economy, which has maintained a steady average annual growth rate of about 4.5% between 2002 and 2006, grew by 6.3% in 2007. Government of Tunisia (GOT) planners predict GDP will grow at an annual average rate of 6.1% over the coming five years. The average inflation rate over the first eleven months of 2007 reached 3%. Hard currency reserves reached $7.972 Million (9.566 Million TD) in December 2007, the equivalent of 145 days of imports.
• Manufacturing industries, producing largely for export, are the motor of Tunisia’s economic growth and a major source of foreign currency revenue, accounting for about 77% of exports. Labor-intensive plants, historically producing textiles and, more recently, automobile components, create much-needed jobs. Textiles have long been the primary source of foreign currency revenue and the sector has recovered after a temporary setback due do to increased global competition. The GOT export promotion center CEPEX (Centre de Promotion des Exportations) is responsible for identifying new export markets in all sectors.
• Tourism as well as mechanical and electrical equipment sales are the next largest sources of foreign currency revenue. About 6.7 million tourists visited Tunisia in 2007 bringing in nearly $2.5 billion in convertible currency.
• Agriculture also plays a major role in Tunisia and employs approximately one-fifth of the population. Agriculture accounts for nearly 12% of GDP and comprises about 6% of exports. In 2007, Tunisia exported nearly $969 million of agricultural products, mainly olive oil, seafood, dates and citrus.
• The government still retains control over certain "strategic" sectors of the economy (finance, hydrocarbons, the national airline, electricity and gas distribution, telecommunications, and water resources), but the role of the private sector is increasing. The Government of Tunisia is currently studying the economic impact of liberalization of petroleum product price controls. Most of Tunisia's electricity is produced from natural gas. Demand is growing 4-5% each year and will reach about 22 billion KWH by 2020. The GOT plans to produce 900 MW of nuclear power by 2020. Tunisia has signed the Treaty on the Non-Proliferation of Nuclear Weapons and a Comprehensive Safeguards Agreement with the International Atomic Energy Agency (IAEA).
• Accessing the Tunisian market can be a challenge for US companies. Geographically part of Africa but culturally more Mediterranean or Middle Eastern, this former French protectorate has extremely close ties with Europe. These have been reinforced by Tunisia’s Association Agreement with the European Union (EU), which created a free trade zone for many products in January 2008. Over 70% of Tunisia’s foreign trade is with Europe. Tunisia’s other major trading partner is Libya. In 2007, total Tunisian imports were $20.4 billion and exports totaled $15.6 billion.
• Tunisia is a founding member of the World Trade Organization (WTO) and is publicly committed to a free trade regime and export-led growth. The government would like to expand trade and investment ties beyond Europe, but the European presence in the economy remains strong. The EU Association Agreement is backed by significant European funding to support the Tunisian economy through the transition period to an open market. Over 3600 Tunisian companies have taken part in the program so far. Tunisia’s Association Agreement with the EU bars non-EU countries from certain major tenders receiving EU financing.
• Tunisia is a member of the Arab Maghreb Union (UMA - Union du Maghreb Arabe), a political-economic grouping of Tunisia, Algeria, Morocco, Mauritania, and Libya. It is also a signatory to several bilateral and multilateral trade agreements, including the Agadir Agreement. This agreement, a framework for a free trade area with Egypt, Jordan, and Morocco, will create a potential market of over 100 million people. Tunisia's commercial ties with the United Arab Emirates (UAE) have taken a leap forward since 2006 with the announcement of plans by several Dubai-based companies to invest some $20 billion in real estate, tourism, and commerce in Tunisia over the next few years. Tunisia regularly attracts about $750 million in FDI annually, two thirds of which comes from Europe. However, in 2006, FDI flow rose to $3.522 billion (of which $2.377 billion came from the 35% participation of Tecom Dig in Tunisie Telecom), making the UAE contribution around 68% of total FDI.
• In order to assist US companies in gaining access to the Tunisian market, the United States signed a Trade and Investment Framework Agreement (TIFA) in October 2002 to formally discuss bilateral trade and investment issues. Follow-on TIFA Councils were held in October 2003 and June 2005. Another TIFA Council is scheduled for March 2008.
• The United States is not a major goods supplier to Tunisia. US Department of Commerce trade statistics for the first eleven months of 2007 show Tunisian imports from United States at $343.5 million and Tunisian exports to the United States at $382.9 million.
• For many years the United States was the fourth leading goods supplier, after France, Italy and Germany, but it dropped to 7th position in 2006. US exports to Tunisia remain steady at approximately $300-$400 million annually.
• Although initial US investment in Tunisia was primarily in the hydrocarbons sector, US companies now successfully invest in offshore manufacturing industries and are present in both textile production and electrical/mechanical equipment manufacturing. Offshore companies can be established under an attractive regime that offers significant tax incentives to export-oriented investors. In the tourism industry, only five of Tunisia’s 800+ hotels are affiliated with US groups. Currently, total US investment in Tunisia is estimated at about $740 million and has contributed to the creation of more than 18,000 jobs.