US, Morocco Conclude Free Trade Agreement
$11 billion market opens for US exporters ''at the crossroads of North Africa, Europe and the Middle East.''
WASHINGTON, DC - 03/05/04 - The US and Morocco have reached a "comprehensive and ground-breaking free trade agreement designed to strip away barriers and facilitate trade and investment between both countries," according to a joint statement from US Trade Representative Robert Zoellick and Moroccan Minister-delegate of Foreign Affairs and Cooperation Taib Fassi-Fihri.
The US currently has free trade agreements with Israel and Jordan, and launched negotiations with Bahrain early this year. The new FTA has been tagged as an integral part of the Bush Administration's strategy to create a Middle East Free Trade Area by 2013.
In addition to the US' six current FTA partners, Morocco joins Australia, and five Central American countries as nations with which Washington has completed negotiations in recent months.?
"Our new and pending FTA partners, taken together, would constitute America's third largest export market and the sixth largest economy in the world," said Zoellick.?
He added that it was especially fitting to conclude an FTA with Morocco, the first country in the world to recognize the newly sovereign US in 1777, and a strong ally of the US in the war against terror. The Treaty of Peace and Friendship between the US and Morocco, negotiated in 1787, is the longest unbroken treaty relationship in US history
Under the terms of the agreement, Zoellick said, "American workers, consumers, investors and farmers will enjoy preferential access to Morocco's $11 billion import market, lying at the crossroads of North Africa, Europe and the Middle East."
The Moroccan government, he said, has launched "a comprehensive economic reform program that is aimed at reducing inflation, developing the tourism sector, eliminating barriers to investment, and liberalizing key services sectors such as telecommunications.? The free trade agreement with the United States, with its emphasis on transparency and the rule of law will enhance and solidify those reforms."
Under the Trade Act of 2002, the Administration must notify Congress at least 90 days before signing the agreement. The Administration will continue to consult with the Congress on the agreement and will soon send a formal notification of its intent to sign the US-Morocco FTA to Capitol Hill.
Morocco is an emerging market at the crossroads of Europe, Africa, and the Middle East that imports $11 billion worth of goods each year. The US currently exports an average $475 million worth of products to Morocco each year.
Leading exports include aircraft, corn, and machinery. Recently, exports of fabrics and pharmaceuticals have increased significantly, according to US Commerce Department figures.
Currently, US products entering Morocco face an average tariff of over 20%,?while Moroccan products are subject to an average tariff of 4% as they enter the US.
The President announced his intention to negotiate an FTA with Morocco in April, 2002, during a meeting with King Mohammed VI at the White House.?
A formal notice to Congress was sent on October 1, 2002 following passage of Trade Promotion Authority. After a 90-day period for consultations between the Administration and the Congress, the US and Morocco launched bilateral negotiations in Washington on January 21, 2003.?
A total of eight negotiating rounds were held, with teams of negotiators and specialists meeting in Washington, Rabat, Geneva, and via digital videoconference.
?In May, 2003, the President announced his initiative to create a Middle East Free Trade Area by 2013, saying the initiative is designed "to deepen US trade relationships with all countries of the region, through steps tailored to individual countries' level of development."
For some countries - such as Saudi Arabia, Lebanon, Algeria and Yemen - the initiative involves working with them to join the World Trade Organization. To help move along the path of reform through stronger bilateral ties, the US will sign Trade and Investment Framework Agreements (TIFAs), as it recently did with Kuwait and Yemen, and as it already has in place with Saudi Arabia, Egypt and Tunisia.?
The Administration has said it hopes to sign a TIFA with Qatar - and for nations ready to do so, the United States will negotiate comprehensive free trade agreements, such as the one announced with Morocco and another under negotiation with Bahrain.
The US is also negotiating free trade agreements with the Southern African Customs Union (South Africa, Botswana, Namibia, Lesotho and Swaziland) and is working to integrate the Dominican Republic into a recent FTA with Central American nations.?
The Administration has announced its intention to begin FTA negotiations with Thailand, Colombia, Peru, Ecuador, Bolivia, and Panama.
Some of the key provisions of the FTA, the joint statement said, are:
"New Opportunities for US Workers and Manufacturers": More than 95% of bilateral trade in consumer and industrial products becomes tariff-free immediately, with all remaining tariffs eliminated within nine years.
Key US export sectors benefit, such as information technology products, construction equipment, machinery, chemicals, and many more.? This is the best market access package negotiated yet with a developing country in a US bilateral free trade agreement.
"Expanded markets for US Farmers and Ranchers": The agreement covers all agricultural products and will open Morocco's market to US farm products. US poultry, beef and wheat will benefit from greater access under tariff-rate quotas, giving US farmers and ranchers a new tool to compete against Canada and the EU in Morocco's market.
Tariffs on corn, sorghum, and soybeans will be cut "significantly" or eliminated immediately, allowing US exporters to respond to Morocco's growing need for feed ingredients.? And processed foods, nuts, and horticultural products will gain significant new market access.?
"Access to Services": The agreement offers new access for US banks, insurance companies, telecommunications companies, audiovisual services, computer and related services, express delivery companies, distribution services and construction and engineering services.
"A Trade Agreement for the Digital Age": State-of-the-art protections and non-discriminatory treatment are provided for digital products such as US software, music, text, and videos. Protections for US patents, trademarks, copyrights, and trade secrets follow the high standards of US bilateral free trade agreements.?
"Strong Protections for US Investors": The Agreement establishes a secure, predictable legal framework for US investors in Morocco.
"Open and Fair Government Procurement": The agreement provides for ground-breaking anti-corruption measures in government contracting. US firms are guaranteed a fair and transparent process to sell goods and services to a wide range of Moroccan government entities.
"Strong Protections for Labor and Environment" : Both parties commit to effectively enforce their domestic labor and environmental laws, and the agreement includes a cooperative mechanism in both labor and environmental areas.?
Already, for example, the US Environmental Protection Agency and the US Agency for International Development have developed a new environmental project in Morocco focusing on that country's capacity to develop its environmental laws, institutions, and enforcement.?
A cooperative mechanism on labor will promote respect for the principles embodies in the International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work, and compliance with ILO Convention 182 on the Worst Forms of Child Labor.
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