• 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 North Africa and the Middle East, and the 2008 average annual income per capita reached $4,022. The International Monetary Fund projected that the 2008 GDP based on Purchasing Power Parity (PPP) per capita was $8,020.
• The Tunisian economy, which has maintained a steady average annual growth rate of about 5.4% between 2004 and 2007, grew by 5.1% in 2008. Government of Tunisia (GOT) planners predict GDP will grow at an annual average rate of 6.1% over the coming five years although this may be reduced in light of the economic crisis. The average inflation rate in 2008 reached 5%. Hard currency reserves reached $9.570 Million (11.687 Million TD) in December 2008.
• 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 69% of exports. Labor-intensive plants, historically producing textiles and, more recently, automobile components, create much-needed jobs. Textiles and mechanical and electrical equipment sales are the primary sources of foreign currency revenue, but both sectors are currently suffering due to the international economic crisis. The GOT export promotion center CEPEX (Centre de Promotion des Exportations) is responsible for identifying new export markets in all sectors.
• Tourism is the next largest source of foreign currency revenue. About 7 million tourists visited Tunisia in 2008 bringing in nearly $2.7 billion in convertible currency.
• Agriculture also plays a major role in Tunisia and employs approximately one-fifth of the population. Agriculture accounts for nearly 10.5% of GDP and comprises about 9.1% of exports. In 2008, Tunisia exported nearly $1.7 billion 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 (85%) and heavy fuel oil (15%). Electricity demand is growing 5.4% 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 U.S. companies. Geographically part of Africa but culturally more Mediterranean and Middle Eastern, this former French protectorate has extremely close ties with Europe. These ties have been reinforced by Tunisia’s Association Agreement with the European Union (EU), which created a free trade zone for industrial products in January 2008. Over 70% of Tunisia’s foreign trade is with Europe. Tunisia’s other major trading partner is Libya. In 2008, total Tunisian imports were $24.7 billion and exports totaled $19.3 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 “Mise à Niveau” 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 attracts about $750 million in Foreign Direct Investment (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 2007 and 2008 total FDI flows respectively reached $1.617 billion and $2.561 billion. Total U.S. FDI flows in 2008 were $94.26 million.
• In order to assist U.S. 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, June 2005, and March 2008.
• The United States is not a major goods supplier to Tunisia. U.S. Department of Commerce trade statistics for the first eleven months of 2008 show Tunisian imports from United States at $471.7 million and Tunisian exports to the United States at $626.2 million.
• For many years the United States was Tunisia’s fourth leading goods supplier, after France, Italy and Germany, but it dropped to 8th position in 2008. In the first eleven months of 2008, U.S. exports to Tunisia grew by 37.3% compared to the same period of 2007.
• Although initial U.S. investment in Tunisia was primarily in the hydrocarbons sector, U.S. 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 two of Tunisia’s 800+ hotels are affiliated with U.S. groups. Currently, total U.S. investment in Tunisia is estimated at about $1.040 billion and has contributed to the creation of more than 18,175 jobs.