Remarks by the Chargé d’Affaires a.i., Robert P. Jackson
AmCham Business Briefing

Hyatt Regency Hotel, Casablanca
March 27, 2009, 9:00 AM

 

 

Mr. Minister,
Ladies and Gentlemen,

It is my pleasure to be here with you this morning to talk about trade and investment between the United States and Morocco.  I plan to keep my comments brief in order to provide greater opportunity to exchange thoughts on how we can further support and improve U.S. – Morocco trade and investment relations.

In the three years since its implementation of the U.S.-Morocco Free Trade Agreement on January 1, 2006, two way trade has more than doubled, a greater number of U.S. investors in numerous industrial sectors have established a presence in Morocco, and the U.S. Government has invested heavily in targeted technical assistance and capacity building in order to ensure that Morocco also benefits from the commercial partnership.

Although we often talk about free trade as if it was something FREE …meaning free of complications and risks, it is in reality something that requires a lot of hard work, sacrifice, adaptability and adjustment, renewed investments, and an entrepreneurial spirit. 

Both trading partners have come a long way to adjust to each other’s cultures, languages, laws, regulations, and technical specifications.

The learning curve has been very steep, especially in the beginning and especially for the country that is trying to enter the U.S. market because while the U.S. is the largest consumer market in the world (I think we can still say this), it is also among the most competitive, saturated, and challenging because manufacturers from around the world have been producing the highest quality goods at the lowest prices and have established their distribution networks and niches in the U.S.  Moroccan firms have had to compete with the rest of the global trading community for a share of the U.S. market, and some have achieved this very well.

You may ask, “Why bother exporting to the U.S. when you already have established markets in Europe?”  I offer three principal reasons:  1) you should never keep all your eggs in one basket, that is to say diversification of buyers and sellers makes sense, 2) the European market is increasingly saturated with low priced goods from Asia and other Middle East North African countries (especially in the textile sector) that may win market share away, and 3) we have seen a growing trend of both Moroccan and U.S. companies figuring out how to trade successfully with each other and we believe that success follows success, which indicates that the trend will continue, albeit under more challenging conditions as a result of the global crunch.

Slide 1:  This first slide demonstrates the rise in combined bilateral trade.  A positive and significant increase according to U.S. Census Bureau figures.  Total bilateral trade was averaging about a billion U.S. dollars, or roughly a half billion dollars in each direction. 

Slide 2 shows the growth in U.S. exports to Morocco.  After the FTA was implemented, we notice a significant increase, in part due to the sale of numerous Boeing airplanes, as well as wheat and cereals exports due to the relatively small harvests.  However, other sectors also benefitted.  A weak dollar contributed to making U.S. priced goods more attractive.

Slide 3 shows just U.S. agricultural exports, making it clear that they account for only part of the picture.

Slide 4 reflects Morocco’s exports to the United States.  The trend beginning in 2006 was not as steep and not as positive as the U.S. trade figure.  Nevertheless, in 2008, Morocco’s percentage change in exports to the U.S. grew at a significantly higher level.  Yes, in part this resulted from OCP’s exports of phosphates/fertilizer to the U.S.  However, other sectors also grew!

Slide 5 highlights Morocco’s agricultural exports to the United States, and you can see there has been a steady growth.  Morocco’s agricultural and food exports have achieved excellent receptivity in the U.S. market since 2006.  Early 2009 Ag trade data shows that the bilateral trade trend is in Morocco’s favor.

Slide 6 highlights Moroccan agricultural imports for the first 11 months of 2008.

Slide 7 shows the trend in U.S. investment in Morocco.  This is a direct result of U.S. confidence in the government’s liberalization of its trade and investment regime, of Morocco’s stability and future growth potential.  New U.S. investments were in multiple sectors (listed on the slide with examples), including mining (Emerging Capital Partners and Truffle Capital), auto-parts (Delphi), and high tech (Tessera).  In addition, U.S. firms support the franchise sector (TGIFridays), tourism (Colony Capital), packaging (International Paper), and expansions in out-sourcing (DELL).

We know that success is not automatic and that is why the U.S. Government through a number of different agencies has supported targeted programs to help support and ensure the success of the FTA.  In addition to technical programs with the Moroccan government, many of these have been specifically targeted at providing practical help to Moroccan companies to access the American market. 

USAID through the New Business Opportunity Program (NBO) has developed business-to-business (B2B) contacts between Moroccan and U.S. businesses that potentially represent over $32 million in business deals.  As of today, NBO program assisted Moroccan firms in manufacturing (textile and leather) achieved $41,440,239 million in export sales to U.S. markets.

NBO has undertaken an extensive U.S. marketing campaign to promote Moroccan firms and demonstrate advantages of doing business in Morocco.

USAID has facilitated numerous buyer's visits to Morocco for American businesspeople in the textiles, shoes and food processing sectors.

USAID has worked in a wide variety of policy reform areas to improve the business enabling environment which would, to some extent, make doing business in Morocco expeditious, transparent and professional for US companies:

Strengthen capability of commercial courts to adjudicate cases in a timely and judicious manner.

Bankruptcy reform

Streamlined the bureaucratic processes and significantly reduced the time it takes for US investors to start a business in Morocco

Improved processes dealing with property transfer and construction permits

Supported the creation of  viable alternative dispute resolution centers and established the first public-private commission on mediation and arbitration

Building capacity to understand and enforce intellectual property rights thru training of judges assigned to commercial courts 

The Integrated Agriculture and Agribusiness Program was instrumental in helping the American company "Mustapha's Fine Foods" based out Seattle (WA) to navigate through the intricacies of obtaining credit to finance a factory in Meknes. 

A Moroccan vendor of high quality Moroccan olive oils has sold over $115,000 in the U.S. market.

To summarize, it appears that the private sector, supported by the U.S. and Moroccan governments, is in general benefiting from the Free Trade Agreement. This may not be a benefit that is felt across the board by all firms, however, our governments remain committed to supporting your efforts, and we remain fully engaged on the policy and practical level to resolve outstanding issues.  I’ll take this opportunity to announce that in May we will hold the second FTA Review in Washington, and in June, we are planning to support a business oriented forum in Morocco to discuss how the benefits of the FTA can reach a broader audience.

In closing, I would like to thank Minister Chami for his time and insights, I would like to thank Rabia El Alama and her team at the U.S. American Chamber of Commerce for organizing this breakfast briefing, and I would like to warmly thank all of you for coming.  I look forward to your questions and comments.