FAQ: U.S. – Morocco Free Trade Agreement (FTA)

What Benefits Can U.S. Companies Expect?

What Documentation is Required?

Why Morocco?

What are the Best Prospects for U.S. Companies? (Non-Textile Industrial Goods)

How Does The FTA Affect Service Sectors?

How Does The FTA Protect Intellectual Property Rights?

What Benefits Can U.S. Companies Expect?

Benefits include:

Tariff elimination. Tariffs on 95 percent of two-way trade in industrial and consumer goods were eliminated on January 1, 2006, when this FTA entered into force.

Services sector openings. Most U.S. service providers, including banks and insurance companies, are to be treated equally with Moroccan companies.

Agricultural access. U.S. farmers and ranchers, including poultry farmers, cattle producers and wheat farmers, have increased access to Moroccan markets.

Enhanced intellectual property rights protection. Morocco will provide U.S. copyright, patent, and trademark owners stronger protection and more effective enforcement of intellectual property rights.

Transparency measures. The Moroccan government will publish its trade related laws and regulations concerning matters covered by the Agreement, as well as allow public comment to the extent possible.

Customs cooperation. U.S. companies can expect faster customs processing for their goods.

What Documentation is Required?

Certificate of Origin:

No certificate of origin is required. The FTA provides that whenever an importer makes a claim for preferential tariff treatment for a good, that:

The importer has certified that the good qualifies for preferential tariff treatment

The customs authorities may request the importer to provide a signed declaration with additional supporting information

Moroccan customs should request a declaration only when:

The importer must retain the information necessary to prepare the declaration for five years from the date of importation of the good.

Shipper’s Export Declaration (SED):

As is the case with exports to other countries, the US government requires submission of a SED, if the value of the shipment is greater than $2,500. Exporters can use the free internet-based system to file (www.aesdirect.gov).

Commercial Invoice:

Exporters should be aware that commercial invoices for all shipments from the United States must bear a notarized affidavit: I, (name, title, and name of company), hereby swear that the prices stated in this invoice are the current export market prices for the merchandise described, that the products being shipped are of US origin, and that they have been manufactured in the United States. I accept full responsibility for any inaccuracies therein. (Signature) [If the products being shipped contain any foreign components, the country of origin and percentage of foreign content in the goods must be indicated on the invoice.]

Other Documentation:

For shipments to Morocco, exporters are required to provide, in original form, an airway bill and a packing list.

Are There Any Import Restrictions?

Import restrictions apply only to firearms, explosives, used clothing and used tires. For more information on export licenses, please refer to the Web site for the Bureau of Industry and Security or contact the TIC at 1-800-USA-TRADE.

Why Morocco?

The U.S. private sector supports the Agreement because it:

The Agreement reinforces many of the economic reforms undertaken by Morocco in the past five years. King Mohamed VI has moved his country away from economic central planning. Morocco has already begun to liberalize its telecommunications sector, reform its audio/visual industry, modernize its financial sector, and enact strong legislation to protect intellectual property rights ("IPR"). The Agreement helps solidify and expand these benefits, enhancing prospects for US companies. Other countries in the Middle East, also interested in free trade agreements with the United States, are looking at this Agreement as an example for their own economic restructuring and development. The Agreement will promote job growth, stability, and democracy in Morocco, a close Arab ally of the United States, as well as here at home. Job creation is one of the United States and Morocco's highest priorities. The Agreement creates opportunities for new U.S.-Moroccan business partnerships that can, in turn, spur employment gains in both our countries. Finally, increased trade will support Morocco's move toward greater democracy. Morocco's October 2002 parliamentary elections were widely hailed as free and fair. In those elections, Morocco permanently reserved more than 10 percent of Parliament's seats for female lawmakers. Morocco has been a steadfast ally in the war against terror. The United States and Morocco have maintained a long, cooperative relationship. Morocco was the first country to recognize the independent United States and the country with which we have the longest treaty relationship. The Agreement is the capstone of a bilateral relationship that dates back more than two centuries.

Parity with the European Union:

The European Union and Morocco implemented a free trade agreement ("Association Agreement") in March 2000. Over the last 10 years, EU exports to Morocco have doubled. Between 1999 and 2001, European goods accounted for nearly 60 percent of Moroccan imports, while U.S. goods accounted for less than 6 percent. The Agreement levels the playing field for U.S. companies vis-à-vis their European competitors and helps increase U.S. market share in the North African market. In short, the Agreement provides parity for U.S. export priorities with the European Union. In addition, the design of the Agreement is comprehensive; it includes services and investments, as well as goods and commodities. For U.S. service providers, this means that existing barriers to services trade (i.e., capital requirements and regulatory frameworks have been made more transparent, been decreased, or will be phased-out completely). By contrast, the EU-Morocco Association Agreement contains more limited, less comprehensive services commitments and does not contain the high-standard investment protections available to U.S. investors under the Agreement.

Middle East Free Trade Area:

Morocco is the North African pillar in a U.S.-Middle East Free Trade Agreement (MEFTA), as announced by President Bush in May 2003. MEFTA reflects the U.S. government's long-term commitment to promoting economic growth, expanding opportunities, and ensuring stability in the region. The region-wide free trade agreement, to be completed by 2013, will provide new export opportunities to U.S. farmers, ranchers, and manufacturers. Jordan and Israel are already FTA partners; negotiations with Bahrain were recently concluded.

What are the Best Prospects for U.S. Companies? (Non-Textile Industrial Goods)

The U.S.-Morocco FTA dramatically increased market access opportunities in Morocco for U.S. manufacturers and service providers and investors. An average tariff rate of 28.3 percent now hinders U.S. exports to Morocco. When the Agreement entered into force on January 1, 2006, Morocco immediately eliminated tariffs on 92 percent of U.S. non-textile industrial exports-a record for an FTA signed with a developing country partner. Morocco is the United States' ninth largest goods trading partner on the African continent, with $958 million in two-way trade in 2002. Civil aircraft, chemicals, information technology, and energy products make up the largest U.S. exports to Morocco. Small and medium-sized enterprises ("SMEs") comprise more than 97 percent of U.S. exporters and will benefit just as much as-if not more than-their larger brethren under the Agreement. The Agreement provides particularly significant opportunities for trade in goods in the following non-textile industrial sectors:

Automobiles and Automotive Parts

Environmental Technologies (Goods and services)

Building Products

Chemicals

Civil Aircrafts

Consumer Goods

Construction Equipment

Forest and Paper Products

Information Technology (IT)

Metals/Steel

Pharmaceuticals

Textiles and Apparel

Agriculture

How Does The FTA Affect Service Sectors?

Services represent 54 percent of Morocco's GDP. This is slightly less than the average for most developing countries. Morocco stated that one of its primary interests in concluding the Agreement was to improve the climate for investment from the United States. As such, the Agreement reinforces the on-going development of Morocco's legal and regulatory reforms and development plans for many sectors of interest to U.S. service providers: telecommunications, e-commerce, engineering and infrastructure services, environmental and energy services among them. Morocco, a developing country, has taken on the many fundamental commitments and obligations under the Agreement that will provide the basis for enhanced liberalization and opportunities for U.S. companies providing services as well as products. The Agreement provides a framework for transparency in Morocco's regulatory framework for services in three areas: standard setting; the regulatory application process; and judicial, arbitral, and administrative procedures. These reinforce services and investment reforms already underway in many services sectors by lowering, phasing out, or making more transparent barriers to services trade and inward investment. In effect, the Agreement institutionalizes international business law, accounting procedures and standards, opening Morocco up to increased U.S. business, direct investment, as well as agricultural and service sector exports. Hot Service Sectors Include:

Telecom Services

Financial Services (Banking, Insurance, and Securities)

Tourism Infrastructure

Housing and Construction

Engineering and Consulting

Legal Services

Environmental Services

Airport Ground Support and Security

Franchising

Energy Services

Education

How Does The FTA Protect Intellectual Property Rights?

U.S. industry has expressed a high level of satisfaction with the IPR provisions of the Agreement. U.S. industry calls the Agreement's IPR chapter, "the most advanced IP chapter in any FTA negotiated so far" and "a precedential agreement for future FTAs." Morocco has agreed to protect IPR to a degree unseen in many other developing countries. Some of the highlights for enhanced copyright, trademark, and patent protection and enforcement include:

Copyrights:

Ensures extended terms of protection (e.g., life of the author plus 70 years) for copyrighted works.

Establishes strong anti-circumvention provisions to prohibit tampering with technologies that are designed to prevent piracy and unauthorized distribution over the Internet.

Provides rules for the liability of Internet Service Providers (ISPs) for copyright infringement, reflecting the balance struck in the U.S. Digital Millennium Copyright Act between legitimate ISP activity and the infringement of copyrights.

Patents & Undisclosed Information

Provides for the adjustment of patent terms to compensate for unreasonable delays in granting the original patent.

Clarifies that test data and trade secrets submitted to a government for the purpose of product approval will be protected against unfair commercial use for a period of five years for pharmaceuticals and ten years for agricultural chemicals.

Requires measures to prevent the marketing approval of pharmaceutical products that infringe patents, and to provide notice when the infringement or validity of a pharmaceutical patent is to be challenged.

Trademarks

Requires a system to resolve disputes about trademarks used in connection with Internet domain names, which is important to address trademark cyber-piracy.

Applies the principle of "first-in-time, first-in-right" to trademarks and geographical indications, so that the first person who acquires a right to a trademark or geographical indication is the person who has the right to use it.

Enforcement

Criminalizes end-user software piracy, providing strong deterrence against piracy and counterfeiting.

Requires both Parties to authorize the seizure, forfeiture, and destruction of counterfeit and pirated goods and the equipment used to produce them. Ex officio action may be taken in border and criminal cases, thus providing more effective enforcement.