Market Overview

Morocco signed a free trade agreement with the U.S. on June 15, 2004 , which entered into effect on January 1st, 2006 . The U.S.-Moroccan Free Trade Agreement (FTA) is one of the most comprehensive free trade agreements that the U.S. has ever negotiated. Morocco is the second Arab and first African nation to have an FTA with the U.S. The FTA will provide U.S. exporters increased access to the Moroccan market by eliminating tariffs on 95 percent of currently traded consumer and industrial goods. It will also level the playing field with European competition and provide enhanced protection for U.S. investors. Moroccan officials anticipate that the FTA will be a catalyst to accelerate and reinforce the country’s economic reform process by allowing greater competition and the formation of international partnerships in key sectors such as insurance and banking, and by greatly liberalizing the Moroccan textile and agricultural tariff structures.
Morocco is now steadily progressing internally toward greater modernization and globalization, with the creation of the country’s first commercial courts, streamlined customs services and 16 Regional Investment Centers dedicated solely to facilitating new business ventures. In 2003, the Moroccan government passed a comprehensive labor code that protects both employers and employees. In addition to calling for a more transparent judicial system and stricter accounting standards, the FTA also provides a high level of intellectual property protection, consistent with the standards set by U.S. law. This includes state-of-the-art protection for trademarks and digital copyrights, expanded protection for patents and product approval information and tough penalties for piracy and counterfeiting.
There are over 120 American businesses operating in Morocco who have invested $2.2 billion and have created over 100,000 direct and indirect jobs. Taking advantage of Morocco ’s 11-million person workforce, American manufacturers are expected to follow the lead of Fruit of the Loom and Dell to expand their activities in Morocco , boosting its $46 billion GDP and $1,520 average per capita GDP. The greatest challenge for Morocco and international investors lies in providing effective education and job training.
Mohamed VI, the King of Morocco, is committed to a broad program of political, economic and social reform, and to remaining a strong partner in the international struggle against terrorism. Morocco held successful local elections in the fall of 2003. Thirty-five Moroccan women are now present in Parliament. Morocco has an ambitious project to reduce its official 10.9% unemployment rate through tourism, investment and education. According to 2002 statistics, nineteen per cent of the Moroccan population lives below the UNDP poverty line. A fifth of the population lives on less than $40 per month.
Strategically located along the Straits of Gibraltar just seven hours from JFK and three hours from Paris , Morocco is seen more and more as a regional hub in North Africa for transportation, transit, and business. Morocco ’s moderate Mediterranean climate on 2,750 miles (3,500 km) of coastline and its developing infrastructure make it an attractive location for business. Morocco ’s Association Agreement has spurred manufacturing development in Morocco , an activity that will be heightened by the FTA. . Morocco will rely on these key trade agreements to stimulate the economic growth and to foster the job creation necessary to facilitate social and educational reform.
Thanks to adequate and well-spread rainfalls, Morocco recorded a bumper crop in 2003-2004. Cold weather and decreased rainfall should equate to a reduced crop yield in 2004-2005. A country the size of California , with only 20.12% arable land, there is substantial potential for expanded U.S. agricultural imports to Morocco .
The U.S. Trade and Development Agency (USTDA) continue to make significant contributions to infrastructure development in Morocco . In 2005, USTDA funded a technical assistance on port security and safety related to the Tanger-Med port project in Morocco . The assistance would design security and safety programs specific to Tanger-Med that are compliant with the International Ship and Port Security (ISPS) Code, Custom-Trade Partnership against Terrorism (C-TPAT), and Container Security Initiative (CSI). When completed, the port is expected to attract billions of dollars in investment and trade, impacting directly the economic and social growth of the northern region, and later Morocco ’s economy. USTDA has recently identifies several projects that will be slated for FY07 in several sectors including energy, environment, and ports development.

Market Challenges

U.S. exporters face strong competition from European trading partners particularly from France who speak the same language and have historical ties with Morocco . European firms in general are familiar with all the aspects of the Moroccan business culture, financing, regulations and standards. They also visit Morocco more often.
The greatest barriers to trade in Morocco are irregularities in the government procurement procedures, lack of transparent governmental and judicial bureaucracies and contraband. Although the government is diligently working to liberalize the business environment, foreign corporations still complain about these challenges. FTA negotiators have addressed these issues and the Moroccan government has agreed to conform to international business standards. Thus the problems posed by these obstacles will gradually diminish for U.S. businesses as a result of the FTA implementation.
The legal and banking system in Morocco differ in many significant ways from the U.S. system.

Market Opportunities

U.S. exporters can benefit from the opportunities opening up through the FTA and take advantage of Morocco ’s position as a gateway to Europe , Africa and the Middle East .
The U.S. Commercial Service has identified the following non-agricultural sectors as best prospects for U.S. firms:
1) Wastewater treatment,
2) Tourism support services,
3) Medical equipment,
4) Telecommunications equipment and services,
5) Airport ground support equipment,
6) Automotive aftermarket parts and equipment,
7) Safety and security equipment,
8) Solid waste management.

Market Entry Strategy

In Morocco , business is done on the basis of relationships. U.S. exporters will need to travel to Morocco frequently to develop and strengthen relationships in order to do business successfully in Morocco . U.S. exporters need to be patient; everything takes more time to accomplish than what U.S. firms are used to. Moroccans appreciate close working relationships, so working with a locally based agent or distributor because of their knowledge of the market and contacts would enhance business prospects. However, market entry strategies often vary by sector and region in Morocco . The staff of the U.S. Commercial Service in Morocco is available to provide individualized counselling to determine the best market entry strategy for a given U.S. company/products. U.S. firms are encouraged to contact the U.S. Commercial Service district office for initial orientation to CS services.
At the top of the Foreign Agriculture Service’s best prospects list are:

1) Wheat, including durum,
2) Feed grains,
3) Oilseeds and products and
4) Dried fruits and nuts.

Country Commercial Guides can be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553NTIS. U.S. exporters seeking general export information and assistance or country-specific commercial information should consult their nearest Export Assistance Center or the U.S. Department of Commerce’s Trade Information Center at (800) USA-TRADE, or go to one of the following websites: http://www.usatrade.gov/ or http://www.tradeinfo.doc.gov/.

 

http://www.moroccousafta.com/maratglance.htm