Morocco slaps Turkish textiles with higher tariffs to protect local industry

MOROCCO – The Kingdom of Morocco’s has moved with urgency and determination to protect the country’s domestic industry from cheap imports by slapping a 36% import tax on all textiles from Turkey.

The new tax is even more punitive as compared to the 27% import tax that had been earlier suggested.

Morocco World News reported that the new measure, aiming to support the domestic textile industry would take effect immediately.

The highly protectionist tax was part of the amended 2020 Finance Bill, approved by the Moroccan government and Parliament earlier this month.

Morocco’s Administration of Customs and Indirect Taxes, while releasing the new tax directives explained that the protectionist measure also hopes to limit imports of textile products, which have strongly competed with domestic products.

Prior to the protectionist taxes, Morocco and Turkey had a Free Trade Agreement in 2004 which became effective in 2006.

Since then, Morocco’s trade balance with Turkey has been largely in deficit with Morocco’s Minister of Industry Moulay Hafid Elalamy revealing that the Maghreb country has been losing close to US$2 billion annually in its trade deal with Turkey.

The Turkish textile industry also caused Morocco a loss of around 44,000 jobs in 2017 alone, Elalamy revealed.

The obvious concerns by Morocco led to the two nations entering into negotiations to review their Free Trade Agreement.

The negotiations were however suspended due to the COVID-19 pandemic and while Morocco’s new protectionist import tax is expected to support the domestic textile industry, it remains to be seen how Turkey will react to it.

Some of the Turkish companies that the new tax rate will directly affect include clothing brands LC Waikiki, Koton, and DeFacto, as well as retail company Bim.

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