WTO Trade Policy Review of Morocco – U.S. Statement

by Chargé d’Affaires David Shark
Geneva,
June 24, 2009

Thank you, Chair.

The United States welcomes the participation of the delegation of Morocco, headed by Minister Maazouz, and including Ambassador Hilale, Permanent Representative of the Kingdom of Morocco in Geneva, in the government’s fourth Trade Policy Review. We value the work produced by the WTO Secretariat and the government of Morocco. Each of the reports has helped to inform our consideration of Morocco’s trade and investment policies since its last TPR in 2003. In addition, I would like to thank our discussant, Ambassador Luzius Wasescha for his first-rate contribution to this review.

The United States and Morocco enjoy a close, enduring friendship and partnership across a range of issues based on shared values and principles. I am pleased to note that Morocco is my country’s oldest and closest ally in the region. Morocco was the first country to seek diplomatic relations with the Government of the United States in 1777, and formal U.S. relations with Morocco date from 1787, when our two nations negotiated a Treaty of Peace and Friendship. The treaty, renegotiated in 1836, is still in force, and constitutes the longest unbroken treaty relationship in U.S. history.

The United States and Morocco regularly consult with each other on issues of mutual importance and both governments recognize the value of continued cooperation on such issues including international trade. We also look forward to ongoing cooperation with Morocco in multilateral fora including the WTO. Morocco continues to demonstrate its commitment to the principles espoused by this organization.

In addition to being an active player here in Geneva, Morocco has negotiated bilateral free trade agreements (FTAs) with trading partners including the United States. The United States-Morocco Free Trade Agreement entered into force on January 1, 2006, immediately eliminating duties on more than 95 percent of all goods and services. In the three years since the FTA’s implementation, two-way trade has more than doubled, a greater number of U.S. investors have established a presence in Morocco, and the U.S. Government has invested heavily in targeted technical assistance and capacity building in order to ensure that Morocco benefits from the commercial partnership. In addition to providing for greater judicial transparency and stricter accounting standards, the FTA provides a high level of intellectual property protection, including enhanced protection for trademarks and digital copyrights, expanded protection for patents and product approval information and tough penalties for piracy and counterfeiting.

We support Morocco’s efforts to negotiate agreements like our own that complement and reinforce the multilateral trading system.

Morocco’s commitment to using trade to enhance its economic development has paid important dividends. As Morocco’s report notes, the country has enjoyed significant gains in GDP growth rates and in average GDP per capita in recent years. The United States supports Morocco’s economic development by providing direct foreign assistance to aid the Moroccan people. For example, in August 2007, the U.S. and Morocco signed a Millennium Challenge Compact totaling $697.5 million to be paid out over five years. The Compact was designed to stimulate economic growth by increasing productivity and improving employment in high-potential sectors, such as artisanal crafts and fishing. The U.S. Agency for International Development (USAID) has managed an active and effective assistance program in Morocco since 1953. Our approach aims to create additional opportunities for trade and investment.

Morocco has also seen substantial increases in foreign direct investment over the past several years. This is due in no small part to its policy of developing a transparent and predictable investment climate and of promoting Morocco as a welcoming place for foreign investors.

Morocco has embarked on an ambitious plan to expand its international trade, including by building a strong and active export promotion agency that is dedicated to educating Moroccan exporters to find and navigate international markets. We applaud and encourage Morocco’s efforts in this direction.

Morocco has been an active participant in the plurilateral negotiations for an Anti-Counterfeiting Trade Agreement. We welcome Morocco’s leadership in this important endeavor as a developing country participating in these negotiations.

We commend Morocco for its support for and commitment to the multilateral trading system and its efforts to promote global trade liberalization. Morocco’s report notes the importance it attaches to a successful conclusion to the Doha Round. We look forward to working closely with Morocco toward that end.

While Morocco has demonstrated its commitment to global trade liberalization, some issues remain. We note that Morocco continues to maintain applied tariff rates that exceed its WTO bound rates, and we urge Morocco to bring its applied rates in line with its WTO bindings. We are also concerned about Morocco’s imposition of variable rates and non-ad valorem rates in some cases where its bindings are ad valorem. We take note of the Secretariat’s conclusion that, apart from the tariff structure and the use of variable duties, “the problem stems above all from the imposition of tariffs at rates higher than the bound rates.” We urge Morocco to consider seriously the Secretariat’s advice that tariff reform would help Morocco keep its commitments and would further simplify Morocco’s trade regime. The Secretariat states that domestic tax reform, among others, would help Morocco consolidate its reforms in areas such as tourism and telecommunications, areas in which Morocco’s commitments lag behind its already-achieved liberalization efforts. Taken together with bold tax reforms, the Secretariat further notes that taking on such commitments would help Morocco enhance the transparency, predictability and credibility of its trade regime. We agree with this assessment.

The Secretariat also cites Morocco for having fallen behind with its WTO notifications in various fields. For example, Morocco made its latest notification on agriculture in January 2005 and that notification covered only calendar year 2002. Morocco’s most recent notification on quantitative restrictions dates from 2002. We hope that Morocco will improve its WTO notification practices in the near-term.

Other areas of concern involve Morocco’s customs practices and export promotion schemes. We have asked Morocco to respond to these and other issues of interest, and we look forward to examining the government’s responses.

In closing, Chair, we wish Morocco a successful review and we thank the delegation for its attention to our questions.

Thank you.