Morocco- International Relationships
From International Business Wiki
With a population of over thirty three million and a growth rate of roughly 1.5 percent, the Moroccan economy has been stable since the 1990’s, but still faces several challenges such as increased poverty and unemployment, dependence on foreign energy and failure to support small businesses. Most of Morocco’s GDP originates from its Agricultural and Mining industries as well as its manufacturing and services industries.Their biggest exports include textiles and they are the second largest producers of phosphate rock mining and processing in the world. And although Morocco faces many of the obstacles that most small developing countries face, they are further strengthening their economy through trade-led growth policies.Because Morocco is becoming less dependent on agriculture to drive its economy it can seek more opportunities in the international markets and has successful relationships with both the European Union (EU) and The United States.
Creating a positive bond with the EU makes sense due to the obvious proximity of the two. The European Union has established a relationship with Morocco through an Action Plan under the European Neighbourhood Policy.The policy was developed in 2004 and aims to establish positive relationships with the countries neighboring the EU by avoiding creation of new dividing lines for trade. Under the policy, “between 1994 and 2004, trade volumes grew by over 80%, with EU imports from Morocco nearly doubling.” While trade is helpful to both, the EU stands as Morocco’s biggest trading partner, holding about 60% of its total trade. Morocco is ranked as the EU’s 31st trading partner. (1).
The Dirham, Moroccan currency, is expected to stabilize itself against the dollar as time progresses. Despite the Dirham being fully convertible only for current account transactions, Morocco signed a free trade agreement with the United States in hopes of boosting foreign direct investments. (2). While foreign investors can invest freely without preliminary authorization, a major source of income and investments come from Moroccan workers living outside of Morocco. (3). The Free-Trade Agreement will particularly benefit American manufacturers and farmers, and includes broad commitments that Morocco open its service sector more effectively to the United States.When the Free-Trade Agreement goes into effect, 95% of all trades will be tariff free. (4).
In order to improve investor relations, Morocco has also arranged its economy so that outside businesses are more inclined to establish operations in it.In order for Morocco to attract more international businesses, they offer a range of government subsidies and other benefits. “As well as benefiting from ready-for-use offices at low rents, business support and simplified administration, firms will be offered a range of tax incentives.The government will also provide vocational and technical training programs for fluent French and Spanish-speaking Moroccan graduates.” (5).
http://ec.europa.eu/trade/issues/bilateral/countries/morocco/index_en.htm
https://www.cia.gov/library/publications/the-world-factbook/geos/mo.html#Econ
http://en.wikipedia.org/wiki/Economy_of_Morocco#External_trade
http://www.moroccanamericantrade.com/newsite/moroccous.html
