BARRIER OF FREE TRADE BETWEEN THE UNITED STATES AND MOROCCO

Barrier of free Trade between the United States and Morocco

Abstract

The free-trade agreement with the United States opened new opportunities in a market that was not previously targeted. [...] t is also expected that US companies will soon begin to relocate their manufacturing activities in Morocco and are likely to raise their purchases there.

Introduction

Two hundred years after being the first country to recognize the U.S. as an independent nation, Morocco's free trade negotiations with the U.S. are well underway. When the U.S.-Moroccan Free Trade Agreement (FTA) is completed, it is expected to be the most comprehensive FTA that the U.S. has ever negotiated. Although congressional approval is required for ratification, it faces little political opposition. When ratified, Morocco will be the second Arab and first African nation to have an FTA with the U.S. (Leonard, 2007, 1085)

Barrier of free Trade between the United States and Morocco

A) Cultural differences

Morocco has constantly encouraged liberal economic choices along with the free circulation of goods and services. It is in that perspective that it hosted the Marrakech conference that led to the “Marrakech Declaration of April 15, 1994” which finalized the Uruguay Round and let to the establishment of the “World Trade Organization” [WTO] on January 1st, 1995. A new era for economic growth and commercial exchange was thus launched.

Morocco voluntarily adhered to this dynamic as one of the 149 member states of the WTO. (Leonard, 2007, 1085) It also launched a series of negotiation rounds that led to the signature, ratification and implementation of series of few “Free Trade Agreements” that define its new trade relationships with selected partner countries in America, Europe and the Middle East. Being located at the crossroads of these regions, Morocco has been aiming at using its geo-strategic position to draw massive interest of business operators from these countries and constitute an investment platform for a new generation of successful entrepreneurs. (Leonard, 2007, 1085)

In addition to opening Moroccan markets to greater American exports, the FTA will level the playing field with European competition and allow American corporations based in Morocco to export to Europe duty-free. Moroccan officials anticipate that the FTA will be the catalyst that accelerates and deepens the economic reform process. . . (Leonard, 2007, 1085)

B) International business ethics

Morocco is now steadily progressing internally toward greater modernization and globalization, with the creation of the country's first commercial courts, (Leonard, 2007, 1085) new streamlined customs departments and 16 new Regional Investment Centers dedicated solely to facilitating new business ventures. A new comprehensive labor code, protecting both the employer and employee, was finally passed in July 2003. By further reducing trade barriers, fomenting transparency, and by institutionalizing international business law, accounting procedures and standards, (Pugel, 2003, 117) the FTA will open Morocco up to increased U.S. business, direct investment and agricultural and service sector exports. . . With Morocco's main asset being its 11 million-person workforce, American manufacturers are expected to follow the lead of Fruit of the ...