Free Trade with Morocco: Helping to Solidify Economic Reforms

        Morocco: A Dynamic Market

Morocco, an emerging market at
the crossroads of Europe, Africa and the Middle East, forms an $11 billion import market.U.S. exports to Morocco average
$475 million annually, with leading exports including aircraft, corn and machinery.There are significant growth
prospects for other U.S. products such as wheat, oilseeds and feed grains, and products and services in the energy, tourism
and environmental areas.

"Morocco is implementing significant economic and political reforms; an FTA with the United States will help to support and accelerate Morocco’s embrace of the modern world economy." Robert B. Zoellick U.S. Trade Representative

        Promoting Economic Reforms

The democratically elected
Moroccan government has launched a comprehensive economic reform program aimed at reducing inflation, developing the tourism sector and liberalizing and privatizing key sectors such as telecommunications. The FTA, with its emphasis on the rule of law, improved competition and trade liberalization, will enhance and solidify these
reforms.
The Government of Morocco, with
the strong support of King Mohamed VI, has launched an initiative to streamline investment procedures and eliminate barriers to foreign and domestic investment. The FTA also will contain provisions to help improve Morocco’s investment climate and protect U.S. investments.

         Leveling the Playing Field for U.S.
Products

In the negotiations, the U.S.
will seek to eliminate tariffs and
other duties on trad between Morocco and the United States on the broadest
possible
basis, improve intellectual property rights protection and
eliminate barriers in
Morocco’s services markets. The U.S. will also
strive to establish fair and
predictable rules for government
procurement and to ensure that Morocco’s customs operations are

conducted with efficiency and transparency.

Morocco has begun implementing an association agreement with the
European Union (EU), which provides preferential tariff treatment for most EU
industrial and some agricultural exports to Morocco, putting American producers at a
comparative disadvantage. The FTA will improve U.S. exporters’ competitiveness
in this market.

At present, U.S. products
entering Morocco face an average 20 percent
tariff
rate, while Moroccan products are subject to an average tariff
rate of only 4
percent in the United States. The FTA will create
duty-free treatment
for Moroccan and
U.S. goods alike,
facilitating increased trade and
investment.Sending a Strong Signal to the Region

President Bush and King Mohamad
VI’s April 2002 announcement to pursue free trade with Morocco deepens our trade dialogue and sends a concrete
signal to the Middle East about the benefits of economic and trade liberalization. The
Administration’s commitment to liberalized trade with a moderate Arab state in the
Middle East shows the benefits of the development of tolerant, open, and prosperous
societies.Trade Capacity Building

The United States is refocusing
its existing development assistance program to link it more closely with the FTA and help Morocco to meet the FTA’s
significant obligations. In addition to trade capacity building, U.S. technical assistance
will help Morocco in critical areas such as agriculture sector reform.

Part of America’s Trade Liberalizing Strategy

The United States seeks to
liberalize trade through multilateral, regional and bilatera initiatives. An FTA with Morocco is a critical element of this
strategy.

The WTO was founded in Marakesh,
Morocco. The bilateral benefits of an FTA with Morocco will complement U.S. objectives and foster convergence of
positions with an important developing country in ongoing WTO
negotiations.