EU-Morocco relations

1. Background

EC-Morocco cooperation goes back to July1969 when an agreement was signed for a period of five years, linking Morocco to the EEC (which then included six members). This cooperation agreement was essentially commercial. Indeed, France was almost the only source of aid or other forms of cooperation, for it maintained considerable economic and political interests in the Maghreb. The same kind of agreements were also signed with Algeria and Tunisia.

Under this agreement, manufactured goods were exempt from duties, but were submitted to quotas reviewed according to the European economic situation. To exploit this advantage, Morocco as well as Tunisia invested massively in the textile and leather industry.

In the agricultural chapter, the EEC imposed severe restrictions in order to prevent competitive goods from entering its market. Preferential tariffs were granted for certain agricultural products such as citrus fruits, exonerated from 80% (Spain wasn’t a member yet); or olive oil exonerated from 30% (as Italy couldn’t meet the Six’s market demand).

The terms of the agreement were only reciprocally applicable to the goods imported from the EEC which did not compete with the local production.

Under the Global Mediterranean Policy, new bilateral agreements were concluded in 1976 with all three Maghreb countries, Morocco, Algeria and Tunisia, -taking effect in 1978-. This time, the GMP went beyond the strict framework of commercial co-operation and provided for economic and financial aid (in the form of bilateral financial protocols, see table). The EEC intended this aid for the development, modernisation and diversification of their industrial and agricultural industries, while at the same time imposing new restrictions which proved to be catastrophic for North Africa’s exports:

  • The zero rate applied to industrial products imported from the eight Mediterranean countries with which the EEC was to co-operate under the GMP was no longer applicable to textiles and refined petroleum products (a large part of Algerian exports).
  • In order to protect the Common Agricultural Policy, the EEC established a « tariff calendar » limiting the access at a preferential rate of agricultural products to the European market to seasons in which the European production cannot meet the demand. Introducing the tariff calendar had serious consequences for Tunisia and especially for Morocco, North Africa’s main agricultural exporter.
  • In 1981 and 1986, the cooperation agreements and financial protocols were renewed for a period of five years, with a net increase in the Commission grants and loans share of the protocols (the Commission’s loans are more advantageous than the European Investment Bank’s).
  • In 1991, the GMP was replaced by the Renovated Mediterranean Policy. The fourth generation of financial protocols were negotiated for the period 1992-96, but the European Parliament refused to approve Morocco’s protocol until October 1992, in protest of Morocco’s bad human rights record at home and in the Western Sahara. The main two innovations of the RMP consisted in giving preference to economic and structural reforms in the Beneficiary countries and putting the accent on regional cooperation and on environment.

2. Euro-Mediterranean Partnership

The MEDA Programme

The MEDA Programme is the main instrument to manage the aid under the Euro-Mediterranean Partnership, agreed in Barcelona in November 1995. The MEDA Programme was created to encourage and support the reform of economical and social structures of Mediterranean partners, in view of the establishment, by 2010 of a free trade area around the Mediterranean. The MEDA resources are attributed bilaterally, within the framework of the National Indicative Programmes while the regional Indicative Programme covers multilateral activities.

The Moroccan National Indicative Programme, accompanying the Association Agreement (signed in February 1996 it entered into force in March 2000) gives priority to economic reforms, particularly in the form of sectorial adjustment programmes; the development of the private sector through direct support for Moroccan companies; and support to the Moroccan government in its strategy for a better social balance and the fight against poverty. Under MEDA I Morocco received a total amount of €630 Million. Besides this amount, the European Investment Bank has been granting loans from its own resources, accounting for €500 Million.

Regional Cooperation

Morocco plays an important role in the regional co-operation conducted under MEDA. This second track of the Barcelona Process provides for a multilateral approach within the Euro-Mediterranean Partnership.

For example, within the framework of regional cultural co-operation, Morocco is a very active partner. It takes part in five out of the six Euromed Audiovisual projects financed under MEDA. These projects aim at new forms of co-operation between European and Mediterranean operators in the audiovisual sector.

Furthermore, Morocco participates in 11 of the 16 Euromed Heritage projects aimed at the preservation and development of the Euro-Mediterranean cultural heritage. From horizontal budget lines, Morocco participated in MEDA democracy, environment, LIFE Programme, fight against Aids, NGO co-financing and fight against drugs, benefiting from a total of €14 Million from horizontal budget lines.

Association Agreement

Following the establishment of the Euro-Mediterranean Partnership in Barcelona in November 1995 the Association Agreement between the EU and Morocco, concluded at the end of 1995, entering into force in March 2000. Replacing the 1976 cooperation agreement, the Association Agreement adds to the long standing economic cooperation new fields such as the political dialogue and cultural exchange, thus assembling the three chapters of the Barcelona Declaration.

Although every Euro-Mediterranean Association Agreement signed by the EU and its Mediterranean partners is agreed on bilateral basis, there are certain common aspects to all of them: political dialogue, respect for human rights and democracy, establishment of WTO-compatible free trade over a transitional period of up to 12 years, provisions relating to intellectual property, services, public procurement, competition rules, state aids and monopolies, economic cooperation in a wide range of sectors, cooperation relating to social affairs and migration (including re-admission of illegal immigrants and cultural cooperation.

The Agreements create two common institutions, the Association Council, at Ministerial level, and the Association Committee, at senior official level, which meet on a regular basis (1).

The respect of human rights and democratic principles are an important element of political cooperation between the partners. The Agreements foresee the possibility to be suspended in the event of major human rights violations.

The main points of the EU-Morocco Association Agreement economic chapter are the following:

  • Progressive establishment of a free-trade zone over a period of maximum 12 years starting from the date on which the agreement takes effect. Import taxes on EC products will diminish progressively in accordance with a calendar of listed products. Exceptional measures, limited to a maximum of 5 years, will allow the partner country to re-introduce or raise custom-duties to protect infant industries. This derogation will no longer be possible at the end of the 12-year transition period.
  • Free circulation of capitals will be instituted for direct investments in Morocco as well as the possibility to repatriate incomes from the capital and all profits.
  • The tariff calendar and quota systems have been maintained for the agricultural and fisheries sectors, but they might be reviewed by the Community from 2001; in the meantime, it has slightly raised the import quota on the following products: cut flowers, tomatoes, oranges, potatoes and sardines from Morocco.
  • Since the expiry of the fourth generation of protocols, the aid granted to the Maghreb countries in no longer fixed in bilateral agreements. The Commission has indeed established a new financial aid allocation system: it has €4,685 Billions at its disposal for the 1996-99 period which must be progressively distributed according to the needs, management and absorption abilities of every Mediterranean partner.

3. Trade Relations

More than half of Morocco’s trade is tightened with European Union member states. Morocco’s main exports to the EU are foods (fishery products, fruit, early produce), flowers and finished consumer products, accounting for nearly €6.000 Million. EU Member states have a trade surplus with Morocco of around €1.700 Million. Their exports to Morocco account for €7.700 Million, mainly on fabrics, machinery and equipment, chemicals, plastics and wheat.

** The discussion on fisheries are an important chapter of relations between the EU and Morocco. A special information sheet on this subject is available at EU-Morocco fishing agreement