Morocco reviews free trade partnerships to protect local producers

MOROCCO – The government of Morocco has announced that it is reconsidering free-trade agreements it has with other countries in a move seen by many as bold and in line with economic reform plans.

Moroccan Minister of Industry, Trade and Green and Digital Economy Hafid Elalamy said the ministry was preparing an evaluation of all free-trade agreements adding that the ministry may cancel those that damage the country’s economy.

Since 2006, business circles in Morocco have been clamoring for a review of Morocco’s trade agreements because they were, in their view, unfair.

The Moroccan Association of Textile and Clothing Industries has for instance accused some foreign-trade partners of ill intentions from the beginning since they have breached commitments to import Moroccan goods.

Morocco’s textile and leather exports, for example, declined 1.2% to $1.9 billion, representing 12.9% of Morocco’s total exports.

Local exporters also pointed out the need to revise Morocco’s free-trade agreement signed 13 years ago with the United States.

They demanded easier access for greater quantities of Moroccan goods to the US market and for better opportunities to take advantage of the possibilities offered by it.

Analysts agree that the agreements did not consider mechanisms to protect local businesses from fierce foreign competition.

They opine that Rabat’s decision to reassess its free-trade agreements was the result of damage to the local economy, as indicated by the ministry’s investigations that confirmed the comprehensive dumping of imported goods, especially from Turkey, in the local market.

The analysts said the realities impose a new approach to trade agreements based on adopting those deals with regional groups, as opposed to bilateral ones, to avoid competition shocks.

Elalamy stressed that the Morocco was ready to comprehensively consider all partnerships harmful to the Moroccan economy and study the files rationally.

Data from the Office of Exchange indicated that Morocco’s trade deficit rose 2.4% in the first nine months of 2019, compared to 2018.

From the beginning of 2019 until the end of September, the deficit grew US$15.8 billion, an increase of about $370 million compared to the same period in 2018.

Analysts agree that the agreements did not consider mechanisms to protect local businesses from fierce foreign competition.

The analysts said the realities impose a new approach to trade agreements based on adopting those deals with regional groups, as opposed to bilateral ones, to avoid competition shocks.

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