22 January 1996
POLICY REVIEW BODY: REVIEW OF MOROCCO
TPRB'S EVALUATION Back to top
The Trade Policy Review Body of the World Trade
Organization (WTO) conducted its second review of Morocco's trade policies on 17 and 18
January 1996. The text of the Chair's concluding remarks is attached as a summary of the
salient points which emerged during the two-day discussion.
The review enables the TPRB to conduct a collective
examination of the full range of trade policies and practices of each WTO member country
at regular periodic intervals to monitor significant trends and developments which may
have an impact on the global trading system.
The review is based on two reports which are
prepared respectively by the WTO Secretariat and the government under review and which
cover all aspects of the country's trade policies, including: its domestic laws and
regulations; the institutional framework; bilateral, regional and other preferential
agreements; the wider economic needs and the external environment.
A record of the discussions and the Chair's
summing-up, together with these two reports, will be published in due course as the
complete trade policy review of Morocco and will be available from the WTO Secretariat,
Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been
completed: Argentina (1992), Australia (1989 & 1994), Austria (1992), Bangladesh
(1992), Bolivia (1993), Brazil (1992), Cameroon (1995), Canada (1990, 1992 & 1994),
Chile (1991), Colombia (1990), Costa Rica (1995), Côte d'Ivoire (1995), Egypt (1992), the
European Communities (1991, 1993 & 1995), Finland (1992), Ghana (1992), Hong Kong
(1990 & 1994), Hungary (1991), Iceland (1994), India (1993), Indonesia (1991 and
1994), Israel (1994), Japan (1990, 1992 and 1995), Kenya (1993), Korea, Rep. of (1992),
Macau (1994), Malaysia (1993), Mauritius (1995) Mexico (1993), Morocco (1989 & 1996),
New Zealand (1990), Nigeria (1991), Norway (1991), Pakistan (1995), Peru (1994), the
Philippines (1993), Poland (1993), Romania (1992), Senegal (1994), Singapore (1992),
Slovak Republic (1995), South Africa (1993), Sri Lanka (1995), Sweden (1990 & 1994),
Switzerland (1991), Thailand (1991 & 1995), Tunisia (1994), Turkey (1994), the United
States (1989, 1992 & 1994), Uganda (1995), Uruguay (1992) and Zimbabwe (1994).
TRADE POLICY REVIEW BODY: REVIEW OF MOROCCO
CONCLUDING REMARKS BY THE CHAIRPERSON Back
Over the past two days, the Trade Policy Review Body
has conducted the second review of Morocco's trade policies and practices. These remarks,
intended to summarize the salient points, are made on my own responsibility and do not
substitute for the Body's collective evaluation and appreciation. The full discussion will
be reflected in the minutes of the meeting.
The discussion developed under four main themes: (i)
macroeconomic environment and general policy trends; (ii) Uruguay Round implementation
process; (iii) regional agreements and the multilateral system; and (iv) individual policy
Macroeconomic environment and general policy
Members commended Morocco on the breadth of the
economic reform that it had implemented autonomously since the early 1980s. In this
process, many previously protected manufacturing and services sectors had been exposed to
competition. In turn, liberalization of the trade and investment régimes - including
significant tariff cuts, reduction of quantitative restrictions and a major programme of
privatization - had helped to underpin a period of strong growth and low inflation, with a
positive impact on external debt.
Some members saw signs that the pace of reform had
slowed recently and that the emphasis had shifted from external liberalization towards
fiscal stabilization. In this context, questions were raised concerning the economic
impact of severe droughts in recent years and their effect on the liberalization agenda.
Members also expressed concern about delays in the legislative process, with a large
number of draft laws awaiting adoption or promulgation. Morocco was asked to notify new
laws as these were implemented.
Several comments focused on the Government's
continuing involvement in the economy. Questions were asked regarding the rationale for
existing duty exemption schemes, seeking to shield export industries from inefficiencies
in domestic sectors. It was felt that a broader approach to liberalization might both
reduce the need for such compensatory intervention, and promote economic diversification
and backward integration of export sectors. Members also enquired about any specific
policy initiatives to broaden Morocco's export base and diversify export destinations.
In reply, the representative of Morocco stressed his
Government's continued strong commitment to an open, rule-based trading system and to
domestic deregulation and privatization. Morocco had embarked on an irreversible process
of economic reform with the final objective of full external and internal liberalization.
This would lead to the deregulation of the transport sector and the privatization of a
number of public enterprises, including two refineries and a development bank. Important
changes were being prepared in the telecommunications area, and the electricity market had
been opened to a major private project. No areas were closed to privatization and a second
list was in preparation containing all remaining firms. Experience with privatization was
positive, including in the creation of employment. There had been a strong response by the
private sector to new privatization bonds recently issued. A precise timetable for further
liberalization was to be announced.
Fundamental economic legislation was currently being
changed. A new investment code had entered into force on 1 January 1996; and a new
commercial code, company legislation, a competition law, and intellectual property
legislation were currently in the parliamentary or governmental process. To accelerate
administrative procedures, the setting up of commercial courts was scheduled for 1996.
Morocco had made considerable progress in
diversifying the regional structure of its exports. This process was supported by export
promotion initiatives and, more generally, by the implementation of the WTO Agreements.
Morocco attached considerable importance to developing its commercial relations with North
and South America, Asia, the Middle East and Africa.
Uruguay Round implementation process
While expressing full appreciation for Morocco's
rôle in, and contribution to, the Uruguay Round and the significance of the commitments
made, members sought clarification on the domestic implementation process. Particular
reference was made to areas such as safeguards, anti-dumping, subsidies and countervailing
measures. Delays in the implementation of agricultural tariffication were observed.
Questions were also raised on the current scope of import licensing and prior declaration
requirements and the use of sanitary and phyto-sanitary controls.
Noting that tariffication had increased the number
of rates, members asked about any further initiatives to simplify the tariff structure,
attenuate tariff escalation and align all official rates with GATT bindings. Several
comments focused on the restrictive effects and administrative costs resulting from the
cumulation of high tariffs, in particular in agriculture, with other import-related
charges and levies, including the Prélèvement Fiscal à l'Importation (PFI). Members
also raised questions about the fiscal policy constraints that might arise from tariff
Members recognized that Morocco had assumed a
commendable level of commitments in services sectors. They encouraged Morocco to
participate actively in the ongoing negotiations on maritime transport and basic
telecommunications. Some participants expressed concern about arrangements affecting the
movement of personnel, including visa requirements.
The representative of Morocco responded that a new
External Trade Law had been adopted by the ministries involved and was to be submitted
soon to the Government Council. New safeguard legislation was currently being developed in
accordance with the relevant WTO Agreement. For the time being, the administration was
authorized to introduce, on a temporary basis, a prior import declaration to monitor
imports of products causing, or threatening to cause, injury to domestic producers. While
Morocco's existing External Trade Law provided for anti-dumping and countervailing
measures, these had not been used to date. The Prior Import Declaration (DPI) could serve
to monitor imports threatening prejudice to domestic production.
Agricultural liberalization was an irreversible part
of the structural adjustment programme. Since 1994, importation of farm products had been
liberalized, with the exception of certain basic food products on which consumption
subsidies were being granted. Import licensing requirements for sugar, vegetable oils,
cereals and their derivatives were being phased out in the first half of 1996, terminating
by 1 June. Accompanying measures included the establishment of tariff equivalents, which
were generally below the GATT bound levels; reforms in the marketing system; creation of
security stocks; the de-monopolization of sugar imports; and the liberalization of oilseed
processing industries. Agricultural tariff equivalents had been calculated in accordance
with the relevant WTO provisions; these were currently applied on meat and dairy products.
Due to the 1995 drought and a change in the fiscal year, implementation of the reduction
commitments for 1995 had been postponed to July 1996. From that date, import licensing
requirements would be confined to products deemed sensitive for health and security
reasons, including explosives, used tyres, and second-hand vehicles.
From 1 January 1996, the structure of the Moroccan
tariff had been changed, abandoning the previous distinction between official and applied
rates. The new tariff schedule contained three columns; the import tariff, the
Prélèvement Fiscal à l'Importation (PFI) and their aggregate. The new tariff would be
notified to the WTO. The transitional fiscal law for 1996 entailed a general reform of the
system; it was aimed at simplifying, harmonizing and improving the transparency of border
taxation. The resulting improvement in the fiscal and economic environment would help to
reduce contraband trade. Rates on some sensitive products had been lowered; for example,
machinery and equipment carried tariffs of no more than 2.5 per cent, while tools, spare
parts and electronic products were subject to a 10 per cent tariff. The PFI was not levied
on such products. At the same time, the number of different tariff rates had been brought
down from thirteen to six. The fiscal effects of these tariff cuts could be partially
offset by a small increase and broadening of scope for VAT. The para-fiscal levy of 0.25
per cent was intended to compensate the private sector for its technical controls on
exports, consistently with Article VIII of GATT.
Morocco had assumed very substantial commitments,
both in terms of sectoral coverage and level of liberalization, under the GATS. These
included sectors such as telecommunications, transport, financial and professional
services, construction, tourism and environmental services. In most cases, national
treatment was granted. Morocco continued to participate actively in the ongoing
negotiations on maritime transport, basic telecommunications and professional services.
Visa requirements for business people were not generally restrictive; a solution would be
sought to problems raised in this connection.
Regional agreements and the multilateral system
Morocco's multilateral trade policies coincided with
efforts to intensify preferential ties with the European Union and North African
countries; participants stressed the need to notify the resulting agreements under WTO
provisions, particularly under Article XXIV of GATT. Details were sought on the recent
Association Agreement with the EU, Morocco's dominant trading partner, and the
implementation agenda. Attention was called to the gradual liberalization of EU markets in
the wake of the Uruguay Round, implying fiercer competition from third countries for
Moroccan preferential supplies to the EU of fruit, vegetables and clothing.
The representative of Morocco noted that the new
Association Agreement initialled with the EU, a natural extension of the previous
Cooperation Agreement, would lead to a free-trade area. It was in conformity with Article
XXIV of the GATT and would be notified on ratification. Agriculture was included in the
Agreement and progressive liberalization was foreseen. A commercial and tariff agreement
with the Union du Maghreb Arabe (UMA) had not yet entered into force, pending the
completion of implementing measures by member States.
It emphasized strongly that Morocco did not ignore
the development of relations with other trading partners: the direction of reforms
undertaken on an m.f.n. basis was clear. Trade was developing well with non-European
He felt that Morocco was well placed to compete
effectively on the EU's textile and clothing market, even after full liberalization under
the Uruguay Round Agreement. The implementation period would be used for positive
adjustments and further diversification of the sector. Geographic proximity and the
flexibility of the industry would help support the necessary adjustments. He was also
confident that Morocco's fruit and vegetable sector would further benefit from recent
export diversification policies. The Association Agreement with the EU was expected to
improve trade flows in this field significantly from the year 2000 onwards.
Individual policy issues
Members took the opportunity to seek clarification
on a wide range of policy programmes and measures. These included Morocco's new Investment
Code; the future orientation of competition policy, including price deregulation; local
content requirements in the motor vehicle sector; a tax on imported wood products; prior
import declaration requirements on bananas; and initiatives against fraudulent trade
In response, the representative of Morocco explained
the main elements of the 1996 Investment Code. Enterprises meeting specified criteria, for
example in terms of employment, could apply for benefits such as reductions in
infrastructure-related charges and professional training. Morocco's new competition law
provided for general price liberalization; price controls could be introduced only in
exceptional circumstances for a limited period. The law, to be implemented in the course
of 1996, would be phased in over three years. A National Competition Council would be set
up as an independent judicial body.
Imports of motor vehicles were unrestricted,
currently carrying a 17.5 per cent tariff and a PFI of 15 per cent which was considerably
below the bound levels. As in many other developing countries, Morocco's initial
industrialization efforts had relied strongly on the automobile industry, and a national
content requirement of 60 per cent was introduced in 1981. However, due to uncompetitive
pricing, the Moroccan market had been inundated by imports of old second-hand cars which,
in turn, had a negative impact on road safety and the environment. To improve this
situation, the concept of an "economic car" was developed, and the world's
leading producers were invited to tender in mid-1994. Incentives were offered to ensure a
local content of 50 per cent and a reasonable sales price. In June 1995, the Government
signed an eight-year contract with the winning competitor, Fiat. In parallel, import
tariffs were reduced to their current level which, in turn, would promote competition. The
project met the relevant provisions for developing countries and would as soon as possible
be notified under the WTO Agreement on Trade-Related Investment Measures.
To fight deforestation and preserve natural forests,
a 6 per cent import tax on wood had been introduced in 1986. The tax was not
discriminatory, being paralleled by an internal tax of 40 per cent.
After the banana market was liberalized in July
1994, a glut of imports, largely exceeding minimum access requirements, caused severe
market disturbances in May, June and September 1995. In response, the Government had taken
emergency surveillance measures and introduced a prior import declaration requirement for
six months; this had now been terminated.
In addition to the tariff changes referred to,
Morocco had taken several administrative measures to fight contraband trade. These
included the restructuring and better funding of the competent customs services, and the
simplification of customs procedures.
During these two sessions, we have had an extremely
useful, informative and stimulating discussion. A very clear thrust and sense of direction
- towards liberalization, modernization and opening up - has emerged. WTO members
congratulated Morocco on the direction of reforms and the steps taken. We have greatly
appreciated the fact that, reflective of Morocco's serious attitude to WTO, the Minister
has come here personally with such a strong delegation. Finally, I would like to express
my appreciation for members' participation in the meeting, and thank the discussants for
their impressive contributions as well as the Secretariat for its preparatory work. Back