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| Birth of Crown Prince gives
Moroccan people hope for a bright future. HM
King Mohammed VI and HRH Lalla Salma with Crown
Prince Moulay Al-Hassan, born May 8, 2003. |
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Courtesy
A. Linh / La Verite
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The United States and the Kingdom of Morocco Negotiate
Free Trade Agreement as Old Friends with New PrioritiesIn
an April 23, 2002, White House ceremony, President
George W. Bush and His Majesty (HM) King Mohammed
VI of the Kingdom of Morocco jointly announced the
intention of the two historically close nations
to secure a Free Trade Agreement. A U.S.-Morocco
Free Trade Agreement will be the culmination of
a long history of economic cooperation that includes
the 1991 U.S.-Morocco Bilateral Investment Treaty
and the 1995 Trade and Investment Framework Agreement
(TIFA).
Round 1 of the negotiations took place in late January
of this year in Washington, DC; Round 2 in late
March in Geneva, Switzerland; and Round 3 in Morocco’s
capital city of Rabat in early June, only two weeks
after the deadly Casablanca terrorist attacks. Round
4 of these negotiations began on July 21 in Washington,
DC. Sources within the respective negotiating teams,
as well as senior US and Moroccan officials, have
indicated that the parties expect to reach agreement
on remaining contentious issues in the very near
future, with a ratified Agreement in place before
the end of the year likely.
Morocco is a politically moderate Muslim nation
with a long history of religious tolerance and a
friendship with the United States that stretches
over two and a quarter centuries. It is also committed
to trade liberalization and economic reform as fundamental
tenets of its development. The liberalization and
privatization of key sectors such as telecommunications
are a crucial component of Morocco’s development
agenda.
The Moroccan telecommunications sector has undergone
a series of important privatization moves in the
past several years. The Moroccan 2000-2004 Economic
and Social Development Plan outlines telecommunications
as Morocco's most strategic sector, with enormous
potential for American business.
The Kingdom is an emerging market at the crossroads
of Europe, Africa, and the Middle East that imports
$11 billion worth of goods and products each year.
In 2002, the United States exported $565 million
worth of goods to Morocco and received imports from
the Kingdom worth $392 million. Leading American
exports include machinery, aircraft, and corn. Recently,
exports of fabrics and pharmaceuticals have increased
significantly. American commodities that could benefit
from an FTA include wheat, feed grains, soybeans,
and soybean products. As Morocco grows economically
and develops the infrastructure required to handle
perishable products, the expansion of U.S. meat
and processed food product exports is expected.
Moroccan exports to the U.S. include transistors,
semiconductors, agricultural products, clothing,
phosphates and other minerals.
In Morocco, nearly half of the country’s
30 million people and most of the poor live in rural
areas. The agricultural sector, which employs half
of the work force, remains a major component of
the economy, contributing about 17 percent to the
gross national product. Agriculture is a major focus
of the FTA negotiations as well, with Morocco keen
to shield its farmers from any potential negative
economic impact. Taib Fassi Fihri, Moroccan Minister-Delegate
of Foreign Affairs and Cooperation and the chief
negotiator for Morocco in the FTA talks explains
that Morocco will “be using appropriate mechanisms,
and has provided for a transitional period…to
attain our objectives in the best possible conditions
of stability, and also for the development of the
agricultural sector.”
U.S. products entering Morocco currently face an
average tariff of over 20 percent, while Moroccan
products are subject to an average tariff of 4 percent
as they enter the United States. The elimination
of tariff and non-tariff barriers to trade between
the United States and Morocco will boost bilateral
trade flows and stimulate economic growth. It will
also lock in and advance important economic reforms
in Morocco, and level the playing field for U.S.
exporters, farmers, and workers.
A U.S.-Morocco FTA will increase access to the Moroccan
services sector for American firms. There are likely
to be opportunities for U.S. firms in the fields
of telecommunications, tourism, energy, entertainment,
transport, financial services and insurance.
Secretary of Commerce Donald Evans believes that
a Free Trade Agreement with Morocco "will strengthen
the economic ties between our two countries. It
will open up economic opportunities here in Morocco.
It will mean more jobs. It will mean better jobs.
It will mean a growing economy.”
The primary goals of the U.S. negotiators in the
FTA talks include the elimination of tariffs and
other duties on trade between Morocco and the United
States on the broadest possible basis, the improvement
of intellectual property rights protection, and
the elimination of barriers in Morocco's services
markets.
Morocco entered into a free trade agreement
with the European Union on February 26, 1996, known
as the EU-Morocco Association Agreement. Signed
in Brussels, Belgium, it entered into force on March
1, 2000, after ratification by the 15 EU Member
States, the European Parliament, and the Moroccan
Parliament. The goal of the Association Agreement
is the gradual dismantling of all trade barriers
between the signatories by 2012.
Morocco’s decision to negotiate free trade
with the United States parallel to ongoing talks
with the European Union has created some friction
within the EU. Speaking at a news conference in
Rabat ten days before the first round of FTA talks
in January of 2003, the French Foreign Trade Minister
Francois Loos, said Morocco “cannot aim at
both things, you have to decide which one you choose.”
He further charged that “you cannot say you
want a close partnership with the EU and at the
same time sign a Free Trade Agreement with the U.S.”
On January 21, however, as the first round
of FTA negotiations was getting underway, U.S. Trade
Representative Robert Zoellick explained that the
“misunderstanding” over Loos’ statements
had been cleared up, and that he had been assured
that the French government “sees no incompatibility”
between the Association Agreement and the ongoing
U.S.-Morocco FTA negotiations.
Former American Chamber of Commerce in Morocco
President Olivier Rousseau explains that “Morocco
will provide companies in the U.S. with opportunities
to use the Kingdom as a hub to export to Europe
using the EU Association Agreement and the FTA.”
When the U.S.-Morocco FTA takes effect, U.S.
goods will enter Morocco tariff-free. They could
then be re-exported to the EU, either directly or
in value-added form. This could become a two-way
street when corporations in Europe reverse the process
to export to the US through Morocco.
According to Saad Bendidi, Vice President and
General Manager of Finance.com, once an FTA is in
place “the sky is the limit for American information
technology companies manufacturing chips, processors,
handsets, and related products in Morocco,”
destined for the hungry EU market.
Taib Fassi Fihri explains that “Morocco
is seeking to diversify its economic and trading
partners for mutually profitable exchanges that
go beyond mercantile considerations.” “Negotiating
a Free Trade Agreement with the United States should
not be seen as incompatible with ongoing talks with
the EU, but instead as an intelligent complementarity.”
Morocco’s Minister of Economic Affairs,
Abderrazaq Mossadeq said that the two agreements
are “not contradictory, but complement each
other.” Adding, “they will boost Morocco’s
ability to attract foreign investment and contribute
to an increase in trade.”
The bold steps currently being taken by His Majesty
are a requirement if lasting change is to come to
the people of Morocco. The negotiation of a Free
Trade Agreement with the United States is only one
component in the King’s overall plan. In September
of 2000, His Majesty initiated the Moroccan 2000-2004
Social and Economic Development Plan to address
the critical issues of employment, housing and education
that face the Moroccan people. It is an integrated
strategy made up of four main components: regional
development and integration; training programs for
young people to qualify them for the 21st century
job market ; increased involvement of women in the
development of Morocco; and the fight against poverty.
A Free Trade Agreement with the United States, with
its emphasis on the rule of law, improved competition
and trade liberalization, would enhance and solidify
these reforms. The proposed FTA would support Morocco’s
commitment to transparency, openness, the rule of
law, and environmental protection.
His Majesty has addressed the Kingdom’s pressing
need for streamlined investment procedures and services,
and the elimination of barriers to foreign and domestic
investment, by creating Centers for Regional Investment
(CRI) in each of Morocco’s sixteen wilayets
(states/administrative regions). By appointing some
of Morocco’s best and brightest minds to run
them, the King is confident in the success of the
CRI program. The CRIs assist businesses interested
in setting up shop in Morocco by cutting through
the time-consuming administrative procedures required
by the government, a process that used to take months
and is now measured in days. The CRI then stays
with the investor, providing a “one-stop shop”
of advisory, follow-up and informational services
that are tailored to the specific region the investor
has decided to locate in.
Lead American FTA negotiator, Assistant U.S. Trade
Representative Katherine Novelli, explained that
the U.S. and Morocco “share common goals in
moving forward with an agreement that supports the
economic reforms that His Majesty and the government
have begun; creates economic opportunities for Moroccans
and for U.S. citizens; and results in raising the
standard of living for both of our countries.”
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