3.1 Introduction

First occupied by France in 1830 and then annexed in 1847, Algeria was still French when the 1957 Treaty of Rome entered into force. As such, Algeria joined the European Economic Community (EEC) and remained an integral part of it until 1962, when the signing of the Évian Accords marked the end of a long war against French rule and ushered in Algerian independence.

The peculiarity of Algeria’s participation in the project of European legal integration has caught the attention of several scholars over the past decade – most notably Megan Brown, whose justly acclaimed book is provocatively titled The Seventh Member State.Footnote ¹ This flare of scholarly attention to Algeria’s European – as opposed to just French – linkages is part of a larger wave of studies, aimed at unearthing the inherent connections between the post-Second World War implosion of the colonial order and the birth of the EEC. Since Peo Hansen and Stefan Jonsson brought the ‘untold history of European integration and colonialism’ into the limelight, many in the social sciences have taken to explore this stretch of history in depth.Footnote ² Current historiographies connect the start of European legal integration not only to the political desire of the six founding states to intertwine their economies for the sake of peace and prosperity, or to the Cold War imperative of shoring off Soviet expansion, but also to the need to enable and legitimize through EEC structures the management of Member States’ former and extant imperial interests.Footnote ³

In such studies, Algeria can claim the centre stage for several reasons.Footnote ⁴ First, among the many possessions and territories of the founding members, Algeria was the only place outside of continental Europe to be specifically mentioned in the main body of the Treaty of Rome.Footnote ⁵ Second, for the first five years of its EEC membership, France fought against Algeria’s independence with utter violence – in stark contrast with the European aspiration to peace famously put forth by France’s own foreign minister Robert Schuman. This striking dissonance has rightly prompted research and reflection on some of the most troubling contradictions at the roots of the European integration project. Third, Algeria’s importance to European historiography has only grown with Brexit, as ‘Algexit’ provides an example avant la lettre of legal, economic, and political disentanglement from the European Union.Footnote ⁶

In this volume, Amel Benrejdal Boudjemaa (Chapter 12) revisits the whole arc of this riveting story, offering a most welcome Algerian perspective on the laws and policies of the EU over time and across a range of issues. This chapter zooms in, instead, on a discrete strand of the story, namely the rise and fall of the Algerian wine industry: the EEC regulation of wine production – one important facet of the Common Agricultural Policy – had a devastating impact upon the exports of Algerian wine and led to the eradication of a thriving industry.Footnote ⁷ In some ways, the wine saga confirms that Algeria’s path through the early days of European legal integration was one of a kind. A uniquely profitable Algerian industry, established by France for its own benefit in colonial times, was thrown out of business through EEC law; and this occurred precisely when Algeria, finally an independent nation, was poised to reap the full profits of wine exports. The extractive violence of racial capitalism, typical of colonial dynamics, leaps to the eye here.Footnote ⁸ At the same time, the following pages aim to show how unexceptional, in one important respect, the wine parabola was. At a higher level of abstraction, the facts and the laws briefly outlined in this chapter were anchored in a common, ubiquitous, and resilient legal framework. It is a framework that, to this day, masks asymmetries of power and enables economic actors, including states and regional entities, to ignore the negative externalities they generate.

The chapter proceeds as follows. Based on the work of scholars from other disciplines, Section 3.2 briefly recalls key events of the Algerian wine saga. This overview illustrates how at law, its special status notwithstanding, Algeria had no redress whatsoever against EEC tariff and non-tariff barriers, and highlights the legal entrenchment of an imperial pattern of centralized, unilateral rulemaking.

Section 3.3, for context, connects the collapse of Algerian wine exports to the larger dynamics of the Common Agricultural Policy and outlines the natural rivalry between Mediterranean countries – some in Europe, some beyond its borders – which share a similar climate and produce similar goods. In matters of wine, Algeria found a fierce competitor in the south of Italy, which in the 1950s and 1960s vied for access to French markets perhaps as much as Algerian exporters did. This glance at the political economy of Europe and its neighbourhood helps to highlight distributional tensions between three different types of trade relations: the deals that are struck among the Member States through common EEC policies; the external trade policies of the EEC; and the bilateral accords entered into by singular Member States with non-EU partners, which remain to this day legitimate wherever the EU lacks exclusive competence.

Section 3.4 adds a theoretical perspective to the narrative. Across a variety of legal systems, basic principles of both private and public (international) law, while having no apparent link to empire-building and colonialism, allow to this day for the perpetuation of power asymmetries redolent of colonial arrangements. The fact that the EEC, in reorganizing its own wine markets, single-handedly shut down a large stream of Algerian profit was a terribly consequential power move and a striking example of colonial wealth diversion. Yet, it also followed a very common pattern – one not confined to colonial arrangements – in which the law systematically enables and blesses agreements between two or more states, typically benefiting the parties of such agreements while extracting or diverting wealth from non-party states or nations. In many cases, this pattern breeds ruin for non-parties and allows short-term interests to prevail over geopolitical stability or transnational equity.

The chapter ends by referencing the contribution of Amel Benrejdal Boudjemaa to this volume, which offers insights not only on past events, but also on the significance of revisiting such events at the present time, when Algeria occupies a very different geopolitical place than it did when the EEC was established.Footnote ⁹ In hindsight, it is easy to see how the excision of Algeria from the Common Market was but a triumph of short-termism. The solar panels that now cover vast patches of Algerian desert, all made in China, attest to ever closer Sino-Algerian energy deals. This time around, Europe might be the one left out.

3.2 Wine

The story of Algerian wine – namely the rise and fall of Algerian wine exports – is a tale of epic proportions and a powerful illustration of colonial dynamics.Footnote ¹⁰ In a nutshell: at the end of the nineteenth century, wine production in Algeria turned from a fringe economic activity of ancient origin to an impressive twentieth-century operation of international proportions. The trigger for this transformation was the phylloxera epidemic that swept through the French countryside in 1879, threatening to put French winemakers out of business. Algeria’s fertile soil became then, in line with the odious colonial trope of virgin lands waiting to be conquered, the uncontaminated place where healthy grapes could grow, thanks not only to the hospitable climate of the country’s northern hills, but also to the availability of cheap labour. In line with the racialized order of colonial economies, ownership remained French; Algerian peasants worked the fields; and the French-Algerian middle class took care of management and cellar operations. To be sure, the growth of this industry into the mid twentieth century was far from linear: as soon as French agronomists managed to stem the epidemic in the metropole and resume wine production at home, Algerian wines began to be perceived as in competition with French ones. Algerian exports started to face, then, regulatory obstacles and custom duties which France would introduce from time to time to appease its own vintners. Nevertheless, Algerian producers had their supporters in France.Footnote ¹¹ Algerian wine, therefore, continued to flow more or less abundantly to the metropole and beyond.

Of special interest to this chapter is the fact that a significant part of such flows consisted of vin de coupage (blending wine): unusually strong and unbeatably affordable, this variety was used by French wine manufacturers to enhance the alcohol content of their own brands. Algerian blending wines enjoyed a privileged export regime even at times of protectionist legislation. The French law that, in 1930, prohibited the blending of foreign wines with domestic ones affected Moroccan and Tunisian exports, but not vin de coupage coming from Algeria.Footnote ¹²

Overall, Algerian wine exports conquered the world’s markets. When Algeria, through France, joined the EEC, it was the largest exporter of wine in the world and the fourth biggest wine producer.Footnote ¹³

EEC Treaty Article 227 made it clear that Algeria would partake of the common market for goods, which meant it would soon be able to export its wine not just to France, but to the entire EEC without any tariff or non-tariff barrier.Footnote ¹⁴ Famously, such prospects did not materialize. Having gained independence, through the 1960s Algeria embarked on a journey of disentanglement from France that would involve the nationalization of local industries, including wine production, hoping to reap and keep revenues once siphoned away by French ownership. Such hopes for the economy of the newly independent country found support in the Évian Accords: in matters of trade, France and Algeria would maintain ‘privileged relations’ including low barriers to Algerian wine exports.Footnote ¹⁵ The other Member States initially followed suit.Footnote ¹⁶ But as the reality of Algeria’s independence seeped in, the idea of trade openness to Algerian products began to fade. Germany and the Benelux countries kept applying to Algerian products the tariff reductions that existed between the six founding states in 1962. Italy was instead eager to erect barriers and, by 1968, gave Algeria third-country treatment.Footnote ¹⁷ France continued to receive Algerian products mostly on a duty-free basis, but ended up buying much less Algerian wine than it had promised to do over the 1960s.Footnote ¹⁸ When Algeria clarified its intention to push France out of the management of Algerian energy resources, France used the ‘wine card’ as payback and in 1970 blocked Algerian wine imports altogether.Footnote ¹⁹

The coup de grâce for Algerian wine exports came by means of EEC law. The Common Wine Policy, as designed by the EEC in 1970, set up a system that would protect EEC wine prices from non-EEC competitors, open up borders between Member States, and introduce rules on wine production and quality.Footnote ²⁰ The new tariffs and countervailing duties vis-à-vis third countries – a category in which Algeria would now belong – were steep, but wine-making rules and quality restrictions went even further and locked out of the EEC wines that had traditionally been imported, most prominently from Algeria. Restrictions on the practice of coupage, for instance, drew a sharp line between Community wines and imported ones – a line that could not be crossed at any price.Footnote ²¹ The new regime proved disastrous for Algerian exporters.Footnote ²² Algeria – a predominantly Muslim country surrounded by neighbours of similar faith – had little internal demand for wine and failed to find alternative wine purchasers abroad. This sudden loss of market share, coupled with the realization that the wine industry had always been – symbolically and at law – a purely French creation, led to a massive abandonment of Algerian wineries.Footnote ²³ In 1971, an Algerian decree ordered the uprooting of 25,000 hectares of ‘useless’ vineyards – a colonial legacy that the newspaper El Moudjahid did not hesitate to define as ‘poisonous’.Footnote ²⁴ Even visually, the change was stunning. As recounted by Albert Camus in his autobiographical last novel, extensive vineyards had been a defining feature of the Algerian countryside.Footnote ²⁵ Within a few years, however, that picture would be replaced by sights of uprooted vines and deserted cellars.Footnote ²⁶

3.3 South–South Rivalries

While Algeria lay to the south of the EEC, Italy was undoubtedly the southernmost of the six official founding states. Besides, Italy carried within itself the predicament of north–south divisions, and its vexed Southern Question posed a political conundrum well known to European intellectuals.Footnote ²⁷ This economic and political imbalance could hardly go unnoticed in the 1950s. In relative terms, the destructive force of the Second World War had pummelled the fledgling industries in the south of Italy more viciously than the northern ones, thereby deepening an economic dualism as old as the 1861 unification of the Italian peninsula.Footnote ²⁸ Since the end of the Second World War, the Allies had feared that the pockets of abject poverty typical of the southern Italian regions would be breeding grounds for communist propaganda, and the Truman administration had seen it appropriate to direct some of the Marshall funds towards the development of such areas.Footnote ²⁹ When convened by Gaetano Martino to the 1955 Messina Conference, the foreign ministers of the other five European Coal and Steal Community states couldn’t but notice – along with the many beauties of the Sicilian landscape – the depth of devastation and the challenges of reconstruction.Footnote ³⁰

The founders of the Community, well aware of southern poverty, knew that the Common Market would likely bring prosperity only to some areas and saw it as their joint responsibility to correct such imbalances.Footnote ³¹ It was clear to political elites in the 1950s that the liberalization envisaged by the early Community treaties might outlaw some of the special regimes, such as state aids, that were part of Rome’s strategy for the Mezzogiorno.Footnote ³² Italy’s entry into the Common Market came therefore with several South-friendly provisions: Article 92(3) of the EEC Treaty, which allowed for intra-national transfers to poorer regions; the European Social Fund, aimed at boosting employment; the European Investment Bank, presided by Italy in the early years of the Community;Footnote ³³ and a special Protocol, annexed to the EEC Treaty upon Italian insistence, making it clear that the EEC would pay attention to the development of its southernmost flank.Footnote ³⁴ In a Europe of six, the south of Italy had become the south of the whole Community and the inspiration for its regional policy.Footnote ³⁵

Italian politicians, who had fought hard for such attention, were extremely wary of their Mediterranean competitors, who also vied for special treatment. In a Eurocentric perspective, facilitating agricultural expansion in post-war Italy was a matter of fairness in north–south relations. It was therefore clear that the newly established Community would have to protect southern Italian agriculture from Algerian competition. Algeria’s first president Ahmed Ben Bella was well aware of such dynamics and in the wake of independence, expressed his understandable antipathy for the nascent Common Agricultural Policy.Footnote ³⁶

Wine was a core issue. While wine production had traditionally been abundant throughout Italy, from Piedmont to Sicily, it was in the south that blending wines and table wines were mostly produced. Per Owen White’s account, ‘[T]he Treaty of Rome in March 1957 promised integration for Algeria’s agricultural goods, but with it the ominous prospect of new competition from cheap Italian wines that tariffs had virtually excluded from the French market before’.Footnote ³⁷

In the mid 1960s, Italian politicians made their worries known in Brussels. Megan Brown explains:

And so it happened. In summer 1970, as noted, France blocked Algerian wine imports completely, and soon thereafter the EEC made sure there would no longer be special tariff arrangements with any of the Member States. Regulation 816/70 erected a comprehensive system of tariffs and countervailing duties on all imported wines, guaranteeing price protection from cheap imports to all EEC wines.Footnote ³⁹ Qualitative barriers, such as the noted restrictions on the practice of coupage, enhanced the strength of the new regime. It is worth noting that, from the standpoint of southern Italy, where the production of strong and sweet wine was abundant, the elimination of Algerian competition would be of crucial value.Footnote ⁴⁰

To be sure, the relative distributional impact of the 1970 Common Wine Policy on the different regions of Italy is a matter for debate.Footnote ⁴¹ Regulation 816/70, outlined earlier, was complemented by Regulation 817/70 of the same year, which elevated the status of ‘quality wines’ then typical of the Italian north while rare in the south.Footnote ⁴² There is strong evidence, however, that the dismantlement of the Algerian wine trade resulting from the 1970 EEC reforms gave a relative boost to southern Italy’s wine exports and was advantageous, at least in the short term, to winemakers in the Mezzogiorno.Footnote ⁴³ For Algeria, by contrast, this was the end of an epoch. From an Algerian perspective, the unprecedented limitation of its exports to Europe was wrongful in multiple ways: as a French breach of the Évian Accords and other promises of preferential trade; as a form of undue French and European retaliation against just assertions of Algerian independence, such as the nationalization of its energy resources; and as a signal that the EEC was in no hurry to extend to Algeria the trade privileges that its neighbours in the Maghreb had already received in 1969.Footnote ⁴⁴ Yet, by EEC law, Algeria had no remedy.

3.4 Non-parties

The regulation of wine production, distribution, and sale in the EEC is a seemingly inexhaustible fountain of Court of Justice of the European Union cases. Many of these are well known and EU jurists intuitively understand the large economic stakes of the controversies underlying them. Usually, such cases concern conflicts between two well-defined types of legal rules: on the one hand, state regulations, which reflect political settlements among local economic actors as well as local habits of wine production or consumption; on the other hand, EU law – often its primary imperatives (free movement of goods, as in Commission v. UK, Wine and Beer, or fundamental rights, as in Hauer), but other times secondary legislation demanding the approximation of state laws and practices (as most recently in Weingut A).Footnote ⁴⁵ In all these cases, the EU judiciary interprets EU law only after considering an alternative legal stance reflecting the interests of national or sub-national constituencies. What is more, the judicial representation of relevant stakeholders (states or private parties) amplifies the arguments that such stakeholders may have already voiced in the process of drafting and adopting the rules in question: a double chance to be seen in the architecture of a complex legal system. To be sure, there is no guarantee that being ‘in the room where it happens’ results in net benefits for all participants: there are myriad reasons why a party fully involved in rule-drafting, or fully represented in disputes concerning such rules, could ultimately find itself holding the short end of the stick.Footnote ⁴⁶ What remains, nevertheless, a prerogative of parties – as opposed to outsiders – is a relatively higher degree of visibility and voice.

Not so, however, when the impact of rules made by insiders is felt by non-parties, as when the Algerian wine industry was dealt a deadly blow by arrangements made among the six EEC states in matters of wine commerce.Footnote ⁴⁷ Not only did Algeria, by then definitely a non-party, have no say whatsoever in the making of the 1970s wine rules;Footnote ⁴⁸ it also had no way to challenge such rules at a later point in time and was left to its own devices in trying to make up, or not, for the lost market share.

In a way, this complete lack of representation is typical of colonial dynamics: the colony cannot but accept and receive rules made in the metropole.Footnote ⁴⁹ In Amel Benrejdal Boudjemaa’s words, ‘determining the future of Algeria from the outside’ was precisely what Europe did in colonial times.Footnote ⁵⁰ Yet, something else is also at work here – a diffuse legal sensibility that originates in private law but permeates legal regimes of all kinds, and works to normalize the harm that the deals concluded by some parties inflict upon non-parties. A brief detour through private law territory may efficiently illustrate why Algeria’s excision from the EEC’s wine market was deeply harmful and yet not actionable – a pattern both specifically colonial and ubiquitous in space and time.Footnote ⁵¹

In private law, contracts cause negative externalities all the time, but such harms are conceptualized as the price society must pay for the sake of competition:Footnote ⁵² ‘There is nothing intrinsically wrong in a contract’s benefitting its parties to the detriment of a third party. Such is the nature of a free market and the inevitable result of the principle of freedom of contract. Indeed, this should normally be expected’.Footnote ⁵³

The rule, then, is that the harm to non-parties is privileged. It is, in old parlance, damnum absque injuria: real harm, but resulting from privileged conduct, and therefore not a trigger of legal remedies.Footnote ⁵⁴ The rule has exceptions, mostly in torts law and antitrust, but a hallowed rule it remains.Footnote ⁵⁵ Where actionable legal remedies (injunctions or actions for damages) exist, they are for the most part distributionally ambivalent: they can be equally mobilized by market actors of all types, including dominant ones, and therefore do not necessarily ameliorate the fate of weaker parties.Footnote ⁵⁶ Theoretical support for the ‘rule’ rests on a widespread faith in the self-healing properties of free markets: it is commonly assumed that in a dynamic market with full mobility of people and resources, the non-party which was harmed by the contracts of others will reinvent herself to stay financially afloat, and might one day be even better off.

Decades of dominant neo-liberal thinking have normalized this kind of reasoning, to the point of obscuring the fact that markets are often far from seamless and that alternative business opportunities are more available to some non-parties than others.Footnote ⁵⁷ All the time, non-parties suffer unredeemable loss as a consequence of deals made among others.

As noted by famed scholars of international law,Footnote ⁵⁸ on the stage of the world economy, where states constantly conclude bilateral treaties or enter regional agreements, similar dynamics occur as in private markets and, more importantly, similar legal constructs – including the presumptive legality of most types of indirect economic harm – apply. And while private-law relations may be embedded in state-based systems of solidarity and mechanisms for redistribution, relations between sovereign nations often occur in a vacuum, so that losses lie where they fall. Regional free trade agreements, as well as customs unions, produce ripple effects in the world economy and predictably harmful externalities. Further, when the parties to such agreements create law- and policy-making institutions such as those of the EU, they can continue to hurt non-parties with a stream of trade-diverting rules, such as key provisions of Regulation 816/70 EEC. In limited circumstances, when trade arrangements made between two or more states hurt other nations, remedies exist in international trade law too, but they do little to offset the chasm between haves and have-nots in the global economy.Footnote ⁵⁹ The institutional mechanisms for redressing global injustice remain marginal, even when – as in the case of Algeria vis-à-vis EEC members – there are seemingly strong ties between outsiders and deal makers. This means that, like Algerian vintners in the early 1970s, non-parties are regularly left without recourse. All they can do is seek alternative strategies for economic development. Algeria did just that.

3.5 Conclusion

The Algerian wine saga offers a broad cautionary tale. Like other actors with significant power in the global market economy, the EU can enter deals or make decisions hurtful to states that are, or have become, non-parties vis-à-vis Europe. One line in a technical regulation, while fully legitimate and mostly well intentioned, could be enough to wipe entire industries out of existence. There are, of course, reasons to celebrate the EU’s power to export its values and to influence the regulatory choices of other nations, for instance in matters of safety standards or data privacy.Footnote ⁶⁰ But different, darker sides of the same power exist. When externalities are negative, and especially when they are felt by those with lesser bargaining power, the EU is legally privileged to ignore them, but it does so at its own peril.

The fall of the Algerian wine industry is not only an early illustration of trade diversion resulting from a ‘megaregional’ avant la lettre. Even more relevant is the distributional complexity of its background. The founders of the EEC were institutionally bound to boost trade inside the Common Market, and also inclined to ameliorate the economic conditions of Europe’s south. The complete collapse of Algerian wine exports may have seemed the natural by-product of policies designed to pursue such goals. Arguably, however, ruining Algeria’s most profitable export was not beneficial to the EEC. If anything, European leaders would have had an interest in sustaining the Maghrebi economy, not least because, were Algeria to realize its yet under-tapped mineral wealth, it would become a great market for European exports.Footnote ⁶¹ In hindsight, maintaining better relations with Algeria might have eased a variety of European worries concerning migration management, political instability in the Mediterranean, oil and gas supplies in times of shortage, and so forth.Footnote ⁶² Instead, with its wine policy, the EEC signalled an abrupt break from Algeria – one that affirmed President Ben Bella’s intuitive distrust of the European integration process.

Today, at times, the relation between the EU with its members on one side and Algeria, a non-party, on the other seems cooperative and coherent across sectors. As Benrejdal Boudjemaa observes about current Mediterranean partnerships, ‘one should not deny the European will to engage with Algeria in a mutually beneficial manner, based on common interests’.Footnote ⁶³ At other times, the relation still seems to evolve ‘haphazardly’, just as it did, according to the Commission, in the 1960s.Footnote ⁶⁴ Indeed, in a world characterized by an ample degree of economic liberty for states as well as corporate entities, one deal may defeat the purpose of another; insiders to one agreement will be outsiders in other contexts. Well-meaning EU gestures towards non-parties may be undercut by rules decided by the Member States among themselves (e.g. the liberalization of the energy market); and even when the parties stay the same, the benefits of the agreement reached in one area may be offset by the harms of seemingly unrelated conduct. There is, as well, the complication of independent initiatives of individual states – for instance on migration control – or large investors or multinationals. Today, as in the 1960s, such quagmires make it hard to identify distributional vectors, and difficult to devise tailored corrective strategies.

And then there is China. As Benrejdal Boudjemaa aptly remarks, we now live ‘in an era where China is emerging as a global power’.Footnote ⁶⁵ China supported Algerian independence on day one, and strong economic and political ties have since developed between the two countries. While Algeria’s agricultural output is both more abundant and more diverse than in the 1960s, it is in the deserts that the real profits lie. Not only is Algeria enjoying remarkable success in the oil and gas sector, due to the upward pressure on hydrocarbon prices resulting from the war in Ukraine; but the Algerian government is also investing in green energy. Its desert lands are being equipped with solar panels at a pace with which some sunny areas in the EU (again, Italy’s deep south) cannot keep up.Footnote ⁶⁶ In terms of trade balance, Algeria imports heavily from China, while being a net exporter to Europe.Footnote ⁶⁷ Individual EU Member States and large investors compete for opportunities in Algeria, which is now picking and choosing its business partners simply because it can. The tables have turned, and while EU legal scholars justly dissect the past in light of postcolonial insights, the fact remains that some bridges were burnt and no amount of European soul-searching will build them up again.