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07 September 2007
'Morocco Gateway Advantage' was the theme of the mission of business leaders representing large US firms in Morocco who in 2005 took the initiative of sharing their success stories with business communities in several large US cities. One of their goals was to present the free trade agreement entered into by Morocco and the United States.
The free trade agreement between Morocco and the United States was signed on June 15 2004; it was promulgated on December 28 2004 and adopted on January 1 2006. The agreement signals that Morocco is liberalizing its economy and becoming a gateway for US companies to enter Europe, Africa and the Middle East. It has an economic and commercial vocation and includes:
The agreement is also relevant with regard to intellectual property, the environment and labour conditions.
Although only two years have passed since the agreement entered into force, its impact has been significant. Many US investors (eg, Colony Capital and recently Octogone Hotels) have shown their interest in trading with and investing in Morocco, while others (eg, Fruit of the Loom) have increased their investment and involvement in Morocco. Exports to the United States have also increased: in 2006 (the first year of implementation) Moroccan exports amounted to $521.2 million, an increase of 17%. Likewise, Moroccan imports from the United States amounted to $875.5 million, an increase of 67%. This is promising, although neither Moroccan companies nor US companies have yet taken full advantage of the agreement.
Many organizations are seeking to enhance the relationship between Morocco and the United States. For example, the Moroccan-American Trade and Investment Centre (MATIC) has recently presented its 'Brand Morocco' programme in Rabat to the Ministry of Commerce and Industry. With its representation in the United States and permanent contacts with Moroccan governmental agencies and ministries, MATIC has become the reference for all those interested in doing business in Morocco or the United States.
Unsurprisingly, it appears that Morocco is still unknown as a trade and industry
destination. Therefore, Morocco must make a significant effort in order to ensure
knowledge of the country, its skills and potential for growth.
However, the United States is not the only country with which Morocco has entered into such an agreement. A four-party agreement with Tunisia, Egypt and Jordan was executed in 1999 and became effective on March 27 2007. It is known as the 'Quadra' or 'Agadir Agreement' and provides for preferential access to industrial products manufactured in the four countries. The agreement is open to all surrounding Arab countries and aims to dismantle customs barriers on imports. The agreement represents an important tool for US businesses seeking to expand their trade in and access to the Middle East.
Foreign investors can access the European Union on account of the agreement signed by Morocco and the European Union on February 26 1996, which became effective in March 2000. The agreement aims to create a free trade zone by 2012.
Morocco and the European Union wish to deepen their political, economic, social and cultural relationship. Therefore, Morocco is trying to progress into the advanced status. An action plan covering a period of three to five years developed by Morocco and the European Union will promote the harmonization of the Moroccan economic and social structures with those of the European Union. This process will help the convergence of the laws, norms and standards in order to integrate the Moroccan economy and business activities. It also aims to promote commerce between both parties by establishing a solid foundation and encouraging a durable bilateral integration.
The agreement with the European Union also provides for the dismantling of customs duties for certain industrial products, either with immediate effect or over a three-year period starting from the date of entry into force of the agreement. Other products will benefit from the dismantling over a 12-year period. Moroccan industrial products exported to the European Union are exempted from custom duties under certain conditions. A similar regime applies to agricultural products and Moroccan fishing goods have free access to the European Union.
Morocco also entered into a free trade agreement with Turkey. The agreement was signed in Ankara on April 7 2004 and entered into force in January 2006; it provides for preferential trade conditions for industrial and agricultural products. Morocco's partners may thus access Turkey in the most advantageous way.
Over the past decade Morocco has modernized its judicial system and upgraded its business regulations. In addition, Moroccan courts recognize international contracts governed by foreign laws and foreign final judgments as long as they do not violate public order.
International contracts usually provide for arbitration as a means for dispute resolution. Arbitration is recognized by Moroccan law and courts. The Code of Civil Procedure provides for internal arbitration and the law governing the commerce courts encourages recourse to arbitration. Many organizations (eg, the chambers of commerce) have created an arbitration body and in some cases a mediation instrument (this is the case of CGEM, the entrepreneurs' association).
With regard to international arbitration, Morocco is party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Without looking at the merits of a case, the local courts may order the enforcement of any arbitration award, whether national or international. The courts may order the enforcement of an international award regardless of the law applied by the arbitrators.
Doing business in or with Morocco is not a risky venture in light of:
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