U.S.-Morocco FTA: Michael Koplovsky, Economic Counselor, U.S. Embassy, Rabat, Morocco
Casablanca-Chicago Sister Cities Committee
Chicago Week in Casablanca
U.S.-Morocco FTA
Wilaya, Casablanca
Thursday, March 11, 2004
Michael Koplovsky, Economic Counselor
U.S. Embassy, Rabat, Morocco
You are conducting your sister city partnership during an extremely timely week, for it was just days ago that the United States and Morocco elevated their already robust and vibrant bilateral relationship to a new level by completing a bilateral free trade agreement.
The U.S.-Morocco Free Trade Agreement, or "FTA" as we call it, is one of only seven completed by the United States, the first in Africa and only the second with an Arab/Muslim nation. The FTA is recognition of Morocco’s status as a long-time friend and ally in an uncertain region. It is recognition of Morocco’s commitment to reform. It is recognition of the kingdom’s unique geographic location at the crossroads of three continents.
Although it sounds trite, the FTA really is a "win-win proposition." It will foster better relationships -commercial and personal - between the American and Moroccan people. It will benefit both countries, by facilitating exports, encouraging investment, and improving the business environment. It will stimulating economic growth and create new jobs on both sides of the Atlantic.
The FTA is testament to what you have seen already this week: the Moroccan people’s commitment to reform. It is testament to their desire to embrace liberalization and modernization.
The comprehensive and far reaching provisions of the bilateral FTA will provide exciting new opportunities and concrete economic benefits - both immediate and long term. The FTA will promote prosperity and improve the welfare for Moroccans and Americans alike.
So what’s in it for Moroccans? And what’s in it for Americans? What’s in it for you Chicagoans? And you Casablancans? At the risk of boring you with specifics, I will try to outline the major provisions of the agreement.
The agreement has sweeping market access provisions that will advance trade between our countries. In fact, this FTA has the most far-reaching market access package of any U.S. free trade agreement with a developing country.
From the very first day of implementation Morocco will enjoy duty free access to 300 million American consumers who import USD 1.5 trillion in goods and services annually. Duties on 98 percent of merchandise entering the United States from Morocco will disappear immediately. More than 95 percent of American consumer and industrial products will enter Morocco duty-free immediately as well.
Key U.S. export sectors such as information technologies, machinery, construction equipment and chemicals, will gain immediate duty-free access to Morocco. Moroccan textile negotiators secured expanded access to the U.S. market. The textile chapter of agreement includes the largest "trade preference level" or special quota, ever offered in a U.S. FTA.
The United States will phase-out all agricultural tariffs under the agreement, most in fifteen years or less. Important Moroccan agricultural exports, like clementines, tomatoes, and certain olives will be able to enter the U.S. market duty free from the very first day. Morocco will in turn provide duty-free access immediately for American products such as, just to give you a "taste" — pistachios, pecans, processed poultry products and pizza cheese - I know that’s a lot of alliteration - bear with me. Liberalization for sensitive Moroccan agricultural products - like wheat and beef — will be phased in only very slowly. This will allow time for vulnerable Moroccan farmers to adjust.
The agreement provides opportunities beyond trade: it also opens both markets for government procurement, e-commerce, and services. Key services covered by the Agreement include express delivery, telecommunications, distribution, construction and engineering, and financial services.
The FTA’s investment rules include increased transparency in rules and regulations, protections against nationalization, ability to repatriate profits and assurances of non-discriminatory "national treatment." These provisions will make Morocco extremely attractive to U.S. companies searching for opportunities in the Mediterranean region They will also make Morocco the ideal platform for exporting to the United States, Europe, the Maghreb and West Africa.
The FTA contains platinum-standard intellectual property rights protections. As other free trade agreements have shown, the commitments made on trademarks, copyrights and patents will bring new investment and technology transfer and will create skilled jobs. Morocco and the United States can expect increased investment and trade in high technology sectors, like audio-visual, information technology, and biotechnology. These areas are the future of trade.
The FTA requires both countries to enforce their own environmental laws, to establish high levels of environmental protection, and to refrain from diluting environmental laws to attract trade or investment. Under the FTA, Morocco and the United States reaffirmed their commitment to strive to ensure that domestic laws provide for labor standards consistent with internationally recognized labor principles.
The United States Government is prepared to assist Morocco with implementing the agreement. We are working with our Moroccan colleagues to maximize its benefits and address the impacts of free trade on the Moroccan people.
USAID’s new five year, USD 30 million program here in Morocco is designed to help manage Morocco’s transition to free trade. USAID’s projects will prepare the Moroccan private sector to take full advantage of the new opportunities and advantages provided by the FTA. They will promote job-relevant skills training. They will also target rural development in the traditionally vulnerable agricultural regions of Morocco.
The Bush Administration has asked Congress for an additional USD 20 million in bilateral Economic Support Funds (ESF) for Morocco in 2005. If approved, these resources will be used to implement rural development projects, job-relevant education programs and micro-credit and loan guarantees.
The U.S. Embassy has and will continue to draw several million dollars annually from the State Department’s Middle East Partnership Initiative (MEPI). These funds are for programs that assist the Government of Morocco with drafting and implementing necessary legislation and regulations, that promote small business development, particularly in export sectors, and that support FTA-related educational programs.
As you can see, our engagement with Morocco will include many activities related to helping the Government of Morocco meet its FTA commitments. Others will help Morocco realize the benefits of free trade. In addition, we believe that our friends in non-governmental organizations and private sector can make important contributions to our efforts. You can make a difference in guaranteeing we realize the "win-win" potential of the agreement. We hope that the Casablanca-Chicago Sister Cities relationship will inspire other groups like yours. We hope we can count on you to lend a hand in making this FTA the most successful one yet.
Complementing the U.S. Government initiatives I have described, many public and private sector groups have already promised to provide technical assistance and advice and share their expertise. In areas such as standards and norms, sanitary and phytosanitary issues, government procurement, labor, environment, and textiles, your colleagues have begun business-to-business and people-to-people contacts. There is much expertise in this room as well - I can just tell - and we would welcome your contributions. And you all have friends and family who can round up even more support. We look forward to seeing the results of all your contributions, both Moroccans and Americans, whether you live here or in the United States.
As you can see the broad and comprehensive FTA will form the cornerstone of our bilateral economic relationship for years to come. It will cement and accelerate ongoing Moroccan reforms, promote investment, growth and job creation in Morocco. At the same time, the FTA offers new commercial opportunities for American business. We look forward to working with our friends and colleagues not only from Chicago and Casablanca, but from throughout the United States and all over Morocco to realize the full potential of the FTA.
Thank you.
