Search

 

Cablegate: Scenesetter for U.S.-Morocco Fta Jt Committee

VZCZCXYZ7375
PP RUEHWEB

DE RUEHRB #0196/01 0631438
ZNR UUUUU ZZH
P 031438Z MAR 08
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 8214
INFO RUEHCL/AMCONSUL CASABLANCA 3927
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/USDA FAS WASHDC 1058
RUEHEE/ARAB LEAGUE COLLECTIVE
RUEHLO/AMEMBASSY LONDON 3541
RUEHFR/AMEMBASSY PARIS 4953
RUEHNK/AMEMBASSY NOUAKCHOTT 3675

UNCLAS RABAT 000196

SIPDIS

SIPDIS
SENSITIVE

DEPT FOR NEA/MAG, EB/IFD/OIA and EB/TPP/BTA
STATE PLEASE PASS TO USTR SHAUN DONNELLY, PAUL BURKHEAD, AND MARY
LATIMER
USDOC FOR ITA/MAC/ONE ROTH
TREASURY FOR OASIA
USDA FOR FAS CHUCK BERTSCH AND BOB MACKE

E.O. 12958: N/A
TAGS: EINV ETRD EFIN EAGR PGOV MO
SUBJECT: SCENESETTER FOR U.S.-MOROCCO FTA JT COMMITTEE

1. (U) The U.S. Mission welcomes the U.S. delegation to the FTA
Joint Committee meeting. The FTA, together with the recently signed
USD 697 million Millennium Challenge Account (MCA) Compact, is one
of our two most visible bilateral accords. Although Morocco has
embraced trade liberalization, you will find a country that is
increasingly debating whether this policy has benefited its trade
partners more than Morocco itself. Critics point particularly to
agreements with the U.S., Turkey, and the Arab States as examples
where trade is more imbalanced than it is with the European Union.


------------------
General Background
------------------

2. (SBU) We had anticipated this debate would lead Morocco to
prefer to treat the joint committee meeting more as a technical
"in-house" exchange between experts than an opportunity to highlight
the agreement publicly. Nonetheless, your hosts are preparing a
joint press conference and an outreach session with business
associations. These two events are scheduled for Friday, March 14
in Casablanca. The Joint Committee meeting itself is scheduled for
the afternoon of Thursday, March 13 in Rabat.

3. (SBU) Recently installed Minister of External Commerce
Abdellatif Maazouz, who previously served as the Directeur General
of the Maison de l'artisan, will head the Moroccan delegation.
Maazouz's Ministry was previously only a supporting player on
bilateral trade policy. In his initial public interviews, Maazouz
has highlighted several broad priorities for his Ministry:
operationalizing Morocco's free trade agreements; developing and
effectively publicizing a "Made in Morocco" logo and image that
attracts international customers; elaborating a national export
strategy that includes reorganizing the Ministry; simplifying export
procedures; and ensuring Morocco is in conformity with its
international obligations.

---------------
Growth in Trade
---------------

4. (U) The primary purpose of the Joint Committee, of course, is to
review developments in bilateral trade, and we believe we have a
very positive story to tell. After a decade in which trade remained
stagnant at around a billion USD per year, trade nearly doubled in
the two years since the agreement entered into force. Public
criticism stems from the fact that while Morocco's exports have
grown significantly over the period (up 35 percent), American
exports have exploded, increasing by over 150 percent.

5. (U) As you know, we confront the added complication of clashing
statistics. The underlying imbalance is even starker in Moroccan
figures, as is evident below.

MOROCCAN FIGURES U.S. FIGURES
Exports from Morocco to the U.S.:
2005 USD 290.7 Million 445.8 Million
2006 USD 234.3 Million (-19pct) 521.4 Million
2007 USD 349.7 Million (+49pct) 609.9 Million

Exports from the U.S. to Morocco:
2005 USD 700.0 Million 525.0 Million
2006 USD 1019.5 Million (+46pct) 878.4 Million
2007 USD 1916.6 Million (+88pct) 1343.0 Million

6. (U) If questioned about this imbalance, we recommend
accentuating those areas where Morocco has enjoyed success, such as
textiles, as well as pointing out the macro factors that have
contributed to the imbalance. Textiles, one of the key industries
targeted by the government, has seen a 43 percent rise in exports to
the U.S. Additionally, while the FTA has certainly had an impact on
our bilateral trade, so too has a booming Moroccan economy, a
depressed dollar, and a very disappointing 2007 Moroccan grain
harvest.

7. (U) Regarding the statistical disparity itself, with the support
of the Commercial Law Development Program (CLDP), the Foreign Trade
Division of the U.S. Census Bureau agreed to a merchandise trade
reconciliation study with Morocco. Post believes the study will
find that a large portion of the disparity stems from transshipment
of Moroccan exports through Europe. However, the initial exchange
of information in the study has just begun, and final conclusions
will not be available for some time.

--------------------------------------------- -----
Moroccan Frustration at Gaining U.S. Market Access
--------------------------------------------- -----

8. (SBU) Chief among the issues that Morocco is likely to bring to
the table is its frustration over securing the certificates
necessary to permit it to ship some agricultural products to the
United States. In an October 2007 meeting, the Animal and Plant
Health Inspection Service (APHIS) advised Morocco that it had all
the information that was needed on this issue and that the process
had entered an internal review. Morocco will at the very least look
for an update on the situation. It has asked for a private meeting
with Agricultural Minister Aziz Akhannouch, which we suspect is
intended to push the issue.

----------------------------
No Movement on Transshipment
----------------------------

9. (SBU) Since implementation, Moroccan interpretation of
permissible transshipment under the FTA's rules of origin has denied
preferential treatment for some U.S. originating goods. Moroccan
customs officials continue to insist that transshipments from a
third country must be preceded by an order (as reflected in an
invoice or bill of lading) from a Moroccan customer before departing
the U.S. This restrictive interpretation effectively prevents U.S.
companies from pre-staging U.S. originating goods in Europe, prior
to receiving an order from a Moroccan customer. Morocco's stance on
this issue was explained in a response to AUSTR Donnelley's letter
and during a February 29 DVC. During the DVC, the Moroccans
compared the specific language included in the U.S.-Jordan FTA
against the corresponding language found in the U.S.-Moroccan FTA.
In short, the Moroccans understand our position and our desired
interpretation, but insist it is neither what was negotiated nor
what was written into the agreement. Given this firm Moroccan
stance, our only recourse is to treat Moroccan goods in the same
manner when they arrive in the U.S. via Europe, with the hope that
this will ultimately induce the Moroccans to display greater
flexibility in future.

--------------------
Wheat Quotas Removed
--------------------

10. (SBU) Although the FTA created provisions for U.S. wheat
producers to benefit from new tariff-rate quotas (TRQs) on durum and
common wheat, they went unfulfilled in 2006. In 2007, as a result
of the country's extremely poor harvest (down 81 percent from 2006),
the government eliminated tariffs on all imported wheat through May
31, 2008, effectively rendering the quotas meaningless. The GOM has
suggested that implementation difficulties during the first year of
the FTA were related to the incompatibility between the calendar
year TRQ and the local marketing year. When Moroccan grain
production returns to normal levels in 2008, implementation issues
will likely resurface.

RILEY

SENSITIVE BUT UNCLASSIFIED

© Scoop Media

 
 
 
 
 
World Headlines

 

Werewolf: Gordon Campbell On North Korea, Neo-Nazism, And Milo

With a bit of luck the planet won’t be devastated by nuclear war in the next few days. US President Donald Trump will have begun to fixate on some other way to gratify his self-esteem – maybe by invading Venezuela or starting a war with Iran. More>>

Victory Declared: New Stabilisation Funding From NZ As Mosul Is Retaken

New Zealand has congratulated the Iraqi government on the successful liberation of Mosul from ISIS after a long and hard-fought campaign. More>>

Gordon Campbell: On The Current US Moves Against North Korea

If Martians visited early last week, they’d probably be scratching their heads as to why North Korea was being treated as a potential trigger for global conflict... More>>

ALSO:

Gordon Campbell: On The Lessons From Corbyn’s Campaign

Leaving partisan politics aside – and ignoring Jeremy Corbyn’s sensational election campaign for a moment – it has to be said that Britain is now really up shit creek... More>>

ALSO:

Another US Court: Fourth Circuit Rules Muslim Ban Discriminatory

ACLU: Step by step, point by point, the court laid out what has been clear from the start: The president promised to ban Muslims from the United States, and his executive orders are an attempt to do just that. More>>

ALSO:

 
 
 
 
 
 
  • Pacific.Scoop
  • Cafe Pacific
  • PMC