Two workers of the new Tanger Med port on July 27, the day of its inauguration. With traffic expected to reach 3.5 million containers a year, Tanger Med is set to be one of the world’s most important transshipments hubs, on the route between Asia and America.

n January of 2006, Morocco’s free trade agreement with the U.S. kicked into effect. The agreement, in fact, follows a series of economic treaties that the two countries have shared since the 1970s. A double agreement on taxation was signed in 1977, the Bilateral Investment Treaty in 1985, and the Trade and Investment Agreement in 1995, which was, in effect, the preliminary step towards today’s full free trade arrangement.

Part of the Moroccan government’s ongoing and comprehensive efforts to open the national economy and integrate more fully in the global economic arena, a process it began in the early 1980s, the free trade agreement with the U.S. was signed in March 2004 after seven rounds of negotiations. It grants preferential status and duty free access to a number of Moroccan products on the U.S. market, including industrial goods, agricultural and seafood products, and services. It has also incorporated built-in safeguards for more fragile Moroccan sectors, which are not, as yet, able to withstand the competition from their larger U.S. counterparts.

Consequently, Morocco is anticipating a strong increase in exports as well as a boom in foreign direct investment from the U.S. interests. Concerns about increased competition have been curtailed through the introduction of special clauses in the agreement. The U.S. currently represents only 4 percent of Morocco’s foreign trade. However, U.S. imports rose by 49 percent in Morocco between 2005 and 2006.

ALI EL ALAOUI Secretary General of the Moroccan Export Center

Minister of External Commerce in the outgoing government Mustapha Mechahouri states, “The kingdom is expecting many positive effects from signing the agreement, taking into consideration of course the constraints that certain sectors here are facing – such as in agriculture, for example. American negotiators introduced a special clause for that sector in order to guarantee stable incomes in rural areas. Also, restricted access for certain American products was introduced so as not to produce negative impacts on prices or agricultural wages. In other areas, preventative measures and transitory periods have been introduced.”

If last year’s exports are anything to go by, the free trade agreement could unleash a barrage of Moroccan textiles onto the American market. In 2006, nearly a third of the country’s exports were consumer goods, mainly confectioned clothes and hosiery products. These were closely followed by semi-finished products such as electronic components, phosphoric acid, and natural and chemical fertilizers. Food and seafood products represented just under 20 percent of the total, while non-processed goods such as raw materials like phosphates and industrial goods – essentially electrical wires and cables – represented roughly 10 percent each.

The U.S. free trade agreement, along with other commercial agreements Morocco has signed in the past few years, constitute a move by the government to diversify its export markets – traditionally centered on Europe. “Morocco has always been a tree with its branches in the Western world and its roots in Africa,” comments Ali El Alaoui, Secretary General of the Moroccan Export Promotion Center (CMPE), who says that Morocco has a lot to gain through the new agreement with the U.S. “We are an African country but we lean towards Europe, with whom we share a very good relationship. However, if Moroccan exports up until a few years ago were confined within this traditional relationship with Europe, with the globalization process they have opened up to other continents and other horizons – in particular America and Africa.”