Morocco Joins Jordan as Second Muslim Nation With U.S. FTA; Another Step Toward Middle East Free Trade
on a comprehensive and ground-breaking Free Trade Agreement (FTA) designed to strip
away barriers and facilitate trade and investment between both countries. U.S. Trade
Representative Robert B. Zoellick and Moroccan Minister-delegate of Foreign Affairs and Cooperation Taib
Fassi-Fihri made the joint announcement.
The U.S.-Morocco FTA is an integral part of President
Bush=s
strategy to create a Middle East Free Trade Area by 2013. The United States currently has free trade
agreements with Israel and Jordan, and launched negotiations with Bahrain early this
year.
"This agreement cuts tariffs and
opens markets for American workers, farmers, investors and consumers. It's a ground-breaking FTA that not only slashes
tariffs, but sets a new high standard for the protection of intellectual property rights, opens markets for
services, ensures government transparency and provides effective labor and environmental
enforcement," said Zoellick. "Morocco is a good friend of the United States, and this FTA sends a
powerful signal that the United States is firmly committed to supporting tolerant, open and more prosperous
Muslim societies. I hope other nations in the Middle East and North Africa will closely study the
terms of this agreement, and will view it as a model to advance their economic relationships with
the United States.
"Our agreement with Morocco is not
just a single announcement, but a vital step in creating a mosaic of U.S. free trade agreements across the Middle East and
North Africa. Morocco will become part of an expanding network of U.S. free trade
relationships. In addition to our six current FTA partners, Morocco joins Australia, and five Central American
countries as nations with which we have completed negotiations in recent months. Our new and
pending FTA partners, taken together, would constitute America's third largest
export market and the sixth largest economy in the world," said Zoellick. He added that it was especially fitting to
conclude an FTA with Morocco, the first country in the world to recognize the newly sovereign
United States in 1777, and a strong ally of the U.S. in the war against terror. The Treaty of Peace
and Friendship between the U.S. and Morocco, negotiated in 1787, is the longest unbroken treaty
relationship in U.S. history American workers, consumers, investors and farmers will enjoy
preferential access to Morocco's $11 billion import market, lying at the crossroads of North
Africa, Europe and the Middle East. The Moroccan government has launched a comprehensive economic
reform program that is aimed at reducing inflation, developing the tourism sector, eliminating
barriers to investment, and liberalizing key services sectors such as telecommunications. The
free trade agreement with the United States, with its emphasis on transparency and the rule of
law will enhance and solidify those reforms.
"I want to thank my Moroccan counterpart, Minister Taib
Fassi-Fihri, for his leadership and commitment to open markets. I also want to thank the U.S. lead
negotiator, Catherine Novelli, our agriculture negotiator, Ambassador Allen Johnson, Under Secretary
of State and former U.S. ambassador to Morocco, Margaret Tutwiler, and the entire
hardworking negotiating teams of both countries for their dedication and success," said Zoellick.
Under the Trade Act of 2002, the Administration must notify
Congress at least 90 days before signing the agreement. The Administration will continue to consult
with the Congress on the agreement and will soon send a formal notification of its intent
to sign the U.S.-Morocco FTA to Capitol Hill.
Background:
Morocco is an emerging market at the crossroads of Europe, Africa,
and the Middle East that imports $11 billion worth of goods each year. The United States
currently exports an average $475 million worth of products to Morocco each year. Leading exports
include aircraft, corn, and machinery. Recently, exports of fabrics and pharmaceuticals have
increased significantly. Currently, U.S. products entering Morocco 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 President announced his intention to negotiate an FTA with
Morocco in April, 2002, during a meeting with King Mohammed VI at the White House. A formal notice
to Congress was sent on October 1, 2002, following passage of Trade Promotion Authority.
After a 90-day period for consultations between the Administration and the Congress, the
United States and Morocco launched bilateral negotiations in Washington on January 21, 2003.
A total of eight negotiating rounds were held, with teams of negotiators and specialists
meeting in Washington, Rabat, Geneva, and via digital videoconference.
In May 2003, the President announced his initiative to create a
Middle East Free Trade Area by 2013. The initiative is designed to deepen U.S. trade
relationships with all countries of the region, through steps tailored to individual countries' level of
development. For some countriesBsuch as Saudi Arabia, Lebanon, Algeria and YemenBthe initiative
involves working with them to join the World Trade Organization. To help move along the path of reform
through stronger bilateral ties, the United States will sign Trade and Investment Framework
Agreements (TIFAs), as it recently did with Kuwait and Yemen, and as it already has in place with Saudi
Arabia, Egypt and Tunisia. The United States hopes to sign a TIFA with Qatar. And for nations
ready to do so, the United States will negotiate comprehensive free trade agreements, such as the
one announced today with Morocco and another under negotiation with Bahrain.
The United States is also negotiating free trade agreements with
the Southern African Customs Union (South Africa, Botswana, Namibia, Lesotho and Swaziland) and
is working to integrate the Dominican Republic into a recent FTA with Central American
nations. The Administration has announced its intention to begin FTA negotiations with Thailand,
Colombia, Peru, Ecuador, Bolivia, and Panama.
Some of the key provisions of the FTA are:
New Opportunities for U.S. Workers and
Manufacturers: More than 95% of bilateral
trade in consumer and industrial products becomes tariff-free immediately,
with all remaining tariffs eliminated within nine years. Key U.S. export sectors benefit,
such as information technology products, construction equipment, machinery, chemicals, and many
more. This is the best market access package negotiated yet with a developing country in a U.S.
bilateral free trade agreement. Expanded markets for U.S. Farmers and Ranchers: The agreement covers all agricultural products and will open Morocco's market to U.S. farm
products. U.S. poultry, beef and wheat will benefit from greater access under tariff-rate quotas, giving U.S. farmers
and ranchers a new tool to compete against Canada and the EU in Morocco's market. Tariffs on
corn, sorghum, and soybeans will be cut significantly or eliminated immediately, allowing U.S.
exporters to respond to Morocco's growing need for feed ingredients. And processed foods, nuts, and
horticultural products will gain significant new market access.
Access to Services: The
agreement offers new access for U.S. banks, insurance companies, telecommunications companies, audiovisual services, computer and
related services, express delivery companies, distribution services and construction and
engineering services.
A Trade Agreement for the Digital Age: State-of-the-art protections and non-discriminatory treatment are provided for digital products such as U.S. software,
music, text, and videos. Protections for U.S. patents, trademarks, copyrights, and trade
secrets follow the high standards of U.S. bilateral free trade agreements. Strong Protections for U.S. Investors: The Agreement establishes a secure, predictable legal framework for U.S. investors in Morocco.
Open and Fair Government Procurement: The agreement provides for ground-breaking
anticorruption measures in government contracting. U.S. firms are guaranteed a
fair and transparent process to sell goods and services to a wide range of Moroccan
government entities.
Strong Protections for Labor and Environment: Both parties commit to effectively enforce their domestic labor and environmental laws, and the agreement includes
a cooperative mechanism in both labor and environmental areas. Already, for example, the U.S.
Environmental Protection Agency and the U.S. Agency for International Development have
developed a new environmental project in Morocco focusing on that country's capacity to develop
its environmental laws, institutions, and enforcement. A cooperative mechanism on labor
will promote respect for the principles embodies in the International Labor Organization (ILO)
Declaration on Fundamental Principles and Rights at Work, and compliance with ILO Convention
182 on the Worst Forms of Child Labor.
A fact sheet on the agreement is available at www.ustr.gov
