Morocco signed a free trade agreement with the U.S. on June 15, 2004, which entered into effect on January 1st, 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. investors. 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 internally toward greater 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, consistent with the standards set by U.S. law. This includes state-of-the-art 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 manufacturers are expected to follow the lead of Fruit of the Loom and Dell to expand their activities in Morocco, boosting its $46 billion GDP and $1,520 average per capita GDP. The greatest challenge for Morocco and international investors lies in providing effective education and job training.

Mohamed VI, the King of Morocco, is committed to a broad program of political, economic and social reform, and to remaining a strong partner in the international struggle against terrorism. Morocco held successful local elections in the fall of 2003. Thirty-five Moroccan women are now present in Parliament. Morocco has an ambitious project to reduce its official 10.9% unemployment rate through tourism, investment and education. According to 2002 statistics, nineteen per cent of the Moroccan population lives below the UNDP poverty line. A fifth of the population lives on less than $40 per month.

Strategically located along the Straits of Gibraltar just seven hours from JFK and three hours from Paris, Morocco is seen more and more as a regional hub in North Africa for transportation, transit, 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. Morocco’s Association Agreement has spurred manufacturing development in Morocco, an activity that will be heightened by the FTA. . Morocco will rely on these key trade agreements to stimulate the economic growth and to foster the job creation necessary to facilitate social and educational reform.

Thanks to adequate and well-spread rainfalls, Morocco recorded a bumper crop in 2003-2004. Cold weather and decreased rainfall should equate to a reduced crop yield in 2004-2005. A country the size of California, with only 20.12% arable land, there is substantial potential for expanded U.S. agricultural imports to Morocco.

The U.S. Trade and Development Agency (USTDA) continue to make significant contributions to infrastructure development in Morocco. In 2005, USTDA funded a technical assistance on port security and safety related to the Tanger-Med port project in Morocco. The assistance would design security and safety programs specific to Tanger-Med that are compliant with the International Ship and Port Security (ISPS) Code, Custom-Trade Partnership against Terrorism (C-TPAT), and Container Security Initiative (CSI). When completed, the port is expected to attract billions of dollars in investment and trade, impacting directly the economic and social growth of the northern region, and later Morocco’s economy. USTDA has recently identifies several projects that will be slated for FY07 in several sectors including energy, environment, and ports development.