Morocco signed a free trade agreement with the United States on June 15, 2004, which entered into effect on January 1, 2006. The U.S.-Moroccan Free Trade Agreement (FTA) is one of the most comprehensive free trade agreements that the U.S. has ever negotiated.  Morocco is the second Arab and first African nation to have an FTA with the U.S. The FTA will provide U.S. exporters increased access to the Moroccan market by eliminating tariffs on 95 percent of currently traded consumer and industrial goods. It will also level the playing field with European competition and provide enhanced protection for U.S. Intellectual property. Moroccan officials anticipate that the FTA will be a catalyst to accelerate and reinforce the country’s economic reform process by allowing greater competition and the formation of international partnerships in key sectors such as insurance and banking, and by greatly liberalizing the Moroccan textile and agricultural tariff structures.

Morocco is now steadily progressing toward greater internal modernization and globalization, with the creation of the country’s first commercial courts, streamlined customs services and 16 Regional Investment Centers dedicated solely to facilitating new business ventures. In 2003, the Moroccan government passed a comprehensive labor code that protects both employers and employees. In addition to calling for a more transparent judicial system and stricter accounting standards, the FTA also provides a high level of intellectual property protection. This includes enhanced protection for trademarks and digital copyrights, expanded protection for patents and product approval information and tough penalties for piracy and counterfeiting.

There are over 120 American businesses operating in Morocco who have invested $600 million and have created 90,000 direct and indirect jobs. Taking advantage of Morocco’s 11-million person workforce, American companies are expected to follow the lead of Fruit of the Loom, Delphi and Dell in expanding their activities in Morocco, boosting its $75.10 billion GDP and $2.503 average per capita 2007 GDP.  According to 2002 statistics, 19% of the Moroccan population lives below the UNDP poverty line.  A fifth of the population lives on less than $40 per month.  King Mohammed VI of Morocco is committed, however, to broad political, economic and social reforms, and to continued strong partnership in the international struggle against terrorism.  Following parliamentary elections in September 2007, the King asked Istiqlal leader Abbas El Fassi to form the new government.

Strategically located along the Strait of Gibraltar just a seven-hour flight from JFK and three hours from Paris, Morocco is seen more and more as a regional hub in North Africa for transportation and business.  Morocco’s moderate Mediterranean climate on 2,750 miles (3,500 km) of coastline and its developing infrastructure make it an attractive location for business and leisure.  Morocco’s Association Agreement and Advanced Status with the European Union (EU) have spurred manufacturing development in Morocco, an activity that has also been heightened by the FTA.  Morocco will rely on these key trade agreements to stimulate economic growth and to foster the job creation necessary to facilitate social and educational reform.

In the agricultural sector, Morocco is heading toward a good 2008-9 crop.  The record rain registered during the fall and early winter should lead to good yields in 2009.  Morocco will still rely on imports to fulfill local demand for wheat.  The duties for bread wheat, durum wheat, corn, barley, distilled dry grains (DDGs), and many other feeds have been phased out until May 31, 2009.  A country the size of California, with only 20% arable land, there is substantial potential for expanded U.S. agricultural products and irrigation technology imports to Morocco. 

The U.S. Trade and Development Agency (USTDA) continues to make significant contributions to infrastructure development in Morocco.  In 2008, USTDA funded a feasibility study for the National Office of Potable Water (ONEP), which should result in the implementation of a Geographic Information System for the management of water resources.  In addition, USTDA also funded technical assistance for the Ministry of Agriculture and Maritime Fisheries to support cold storage for palm dates.  As for 2009, USTDA has recently identified projects in several sectors including cold storage for fisheries, ports infrastructure and railway management.

Morocco and the Millennium Challenge Corporation signed a five-year, $697.5 million Millennium Challenge Account Compact to reduce poverty and increase economic growth.  The program seeks to stimulate economic growth by increasing productivity and improving employment in high-potential sectors including investments in fruit tree productivity, small-scale fisheries, and crafts.  Small business creation and growth will also be supported by investments in financial services and enterprise support.  The Compact components include:

• Fruit Tree Productivity Project ($300.90 million)
• Small-Scale Fisheries Project ($116.17 million)
• Artisan and Fez Medina Project ($111.87 million)
• Financial Services Project ($46.20 million)
• Enterprise Support Project ($33.85 million)