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Implementation of the U.S.-Morocco
Free Trade Agreement (FTA) began on Jan. 1, 2006. Under the agreement, most
agricultural tariffs between Morocco and the United States are eliminated
immediately or over 2 years, 6 years, or 9 years.
Background
In March 2004, the United States and
Morocco reached agreement on a comprehensive and groundbreaking FTA designed to
reduce and eliminate barriers and facilitate trade and investment in both
countries. Negotiations for the FTA began in January 2003. In August 2004 and
January 2005, respectively, the U.S. Congress and Moroccan Parliament ratified
the FTA.
Trade Overview
Morocco is an emerging market at the
crossroads of Europe, Africa, and the Middle East that imports $17 billion worth
of agricultural goods each year. The U.S.-Morocco FTA will improve U.S.
agricultural exporters’ competitiveness in this market. The United States
exported agricultural goods valued at $66 million to Morocco in 2005, including
corn, soybeans, sugar, tobacco, and wheat. In that same year, the United States
imported about $66 million worth of agricultural goods from Morocco. The chief
U.S. agricultural imports from Morocco consist of processed vegetables, olive
oil, and essential oils.
Morocco has an Association Agreement
with the European Union (EU) that provides preferential tariff treatment for
most EU industrial and some agricultural exports to Morocco and puts American
producers at a comparative disadvantage. Morocco also has concluded an FTA with
Turkey, and a regional FTA with Jordan, Egypt, and Tunisia.
Key Elements of the Agreement
Export Subsidies.
The United States and Morocco have agreed to not use agricultural export
subsidies in each other’s markets, unless the exporter believes that a third
country is subsidizing its exports into the other FTA country’s market. In such
cases, special provisions provide for measures to counter the third country’s
subsidies.
Export State Trading Enterprises.
The United States and Morocco have agreed to work in the World Trade
Organization (WTO) toward an agreement that: (1) eliminates restrictions on the
right to export; (2) eliminates special financing granted directly or indirectly
to state trading enterprises that export a significant share of a country’s
exports of an agricultural good; and (3) ensures greater transparency in the
operation and maintenance of export state trading enterprises.
Agricultural Trade Forum.
The United States and Morocco will address bilateral agricultural trade issues
through the Joint Committee established under the Agreement.
Rules of Origin.
The Agreement contains strong but simple rules of origin, consistent with other
U.S. free trade agreements in the region. The general rules of origin are
designed to ensure that only U.S. and Moroccan goods benefit from the
preferential market access commitments. More detailed provisions apply to a few
agricultural goods.
Sanitary and Phytosanitary (SPS)
Measures. Under the Agreement, the
United States and Morocco affirmed their existing rights and obligations under
the WTO SPS Agreement. In addition, they gave up recourse to the Agreement’s
dispute settlement procedures for any SPS issues arising under the SPS Section
of the agriculture chapter, and affirmed their desire to create a forum on SPS
matters through the Joint Committee.
Moroccan Commitments on Market Access
The Agreement enhances access to the
Moroccan market for U.S. agricultural products, while at the same time
complementing Morocco’s agricultural reform efforts and preserving the economic
and social stability in a sector of the Moroccan economy that employs almost
half the population.
Morocco provides preferential market
access on all agricultural products according to schedules negotiated on a
product-specific basis. Preferential tariff phase-outs on most products will
occur in equal annual installments over the following phase-out periods:
immediate, 2 years,
5 years, 8 years, 9 years, 10 years, 12 years, 15 years, and 18 years. Tariffs
on other products will be phased out using non-linear formulas applied over 5
years, 6 years, 10 years, 18 years, 19 years, and 25 years.
The Agreement establishes preferential
tariff-rate quotas (TRQs) for high quality and standard quality beef, chicken
and turkey whole birds, chicken leg quarters and wings, durum wheat, common
wheat, almonds, and apples. The details of the preferential TRQs vary by
product, but in general, the imported product receives a preferential duty
reduction for a specific quantity that expands over time. Volumes imported over
the specific amounts have higher tariffs. The lower in-quota tariffs are
eliminated, except for common wheat, as are the higher over-quota tariffs,
except for durum wheat, non-durum wheat, and standard quality beef. In addition,
the Agreement contains a provision ("preference clause") that will afford U.S.
exporters of products such as wheat, beef, poultry, corn and corn products, and
soybeans and soybean products, market access comparable to Morocco’s other
trading partners, thereby giving U.S. exporters a new tool to compete with
Europe and others in Morocco’s market.
U.S. Commitments on Market Access
The United States provides preferential
market access on all agricultural products according to specific schedules
negotiated on a product-specific basis. Preferential tariff phase-outs are
immediate, 2 years,
5 years, 8 years, 9 years, 10 years, 12 years, 15 years, and 18 years. Tariffs
on other products are phased out immediately or over 9 years.
The Agreement establishes preferential
TRQs for Morocco for beef, liquid dairy, cheese, milk powder, butter, other
dairy products, peanuts, cotton, tobacco, sugar and sugar-containing products,
tomato products, tomato sauces, dried onions, and dried garlic. Under these TRQs,
the imported (Moroccan) product receives a zero duty for a specific quantity
that expands over the implementation period. Volumes imported over the specific
amounts have higher tariffs. The higher tariffs are gradually eliminated over 15
years. Sugar and sugar-containing products also are subject to a net surplus
exporter methodology.
Note 1: Moroccan agricultural
import statistics derived from Global Trade Atlas
Note 2: U.S. agricultural
export statistics derived from U.S. Trade Exports-WTO Agricultural Codes
U.S.-Morocco Free Trade Agreement Page