VZCZCXYZ0000
PP RUEHWEB

DE RUEHRB #1190/01 3581714
ZNR UUUUU ZZH
P 231714Z DEC 08
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 9481
INFO RUCNMGH/MAGHREB COLLECTIVE
RUEHCL/AMCONSUL CASABLANCA 4429
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS RABAT 001190 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR NEA/MAG, EEB/IFD/OIA AND EEB/TPP/BTA 
STATE PLEASE PASS TO USTR - PAUL BURKHEAD AND MARY LATIMER 
USDOC FOR ITA/MAC/ONE ROTH 
USDA/FAS ONA FOR CHUCK BERTSCH AND BARBARA CHATTIN 
USDA/FAS OCRA FOR CATHY MCKINNELL 
USDA/APHIS FOR CRAIG FEDCHOCK AND FAN-LI CHOU 
 
E.O. 12958: N/A 
TAGS: ETRD EFIN EAGR EINV MO
SUBJECT: MOROCCO'S PENDING FTA ISSUES 
 
¶1.  (SBU) Summary: Minister of Foreign Trade Abdellatif 
Maazouz convoked the Ambassador (accompanied by AgCouns and 
EconOff) on December 16 to discuss the evolving post-Free 
Trade Agreement (FTA) bilateral trade relationship and next 
steps to advance outstanding implementation issues.  Minister 
Maazouz raised Moroccan concerns about U.S. market access for 
Moroccan tomatoes and berries, areas of disagreement on 
administration of transshipment rules and wheat tariff 
quotas, non-conforming measures in services, and technical 
assistance.  Minister Maazouz expressed the Government of 
Morocco,s (GOM's) overall satisfaction with the FTA, but 
noted &small technical issues8 that need to be resolved as 
soon as possible.  The Ambassador highlighted the expected 
2009 visit of Assistant United States Trade Representative 
(USTR) Chris Wilson and the Second Joint Committee meeting as 
possible forums to address these issues.  End Summary. 
 
----------------- 
Proposed Meetings 
----------------- 
 
¶2.  (U) The Ambassador opened the discussion by presenting 
USTR,s proposal that new Assistant USTR Chris Wilson make an 
introductory trip to Morocco in early 2009.  The Minister 
stated his preference that the visit take place in early 
January, ideally before the Ambassador,s departure from Post 
on January 20.  He also noted USTR,s proposal to hold the 
Second Joint Committee Meeting in the spring or early summer 
¶2009.  Maazouz preferred a spring timeframe, stressing the 
importance of addressing unresolved FTA issues as soon as 
possible. 
 
-------------------------- 
Agriculture and SPS Issues 
-------------------------- 
 
¶3.  (U) Tomatoes:  Maazouz stated that the accreditation 
process to allow tomato exports to the U.S. from the 
Souss-Massa Region is almost complete after five years.  He 
observed that USDA's Animal and Plant Health Inspection 
Service (APHIS) has finished its technical review, but 
inquired about when the new final rules will be published in 
the Code of Federal Regulations.  The GOM is eager to know 
when producers from the Agadir region can begin to ship their 
tomatoes to the U.S. market, he concluded.  AgCouns told the 
Minister that the change of U.S. Administration might delay 
the publishing process of the rules until next spring.  The 
new regulations will require that APHIS visit and approve the 
tomato greenhouses eligible to export to the U.S.  AgCouns 
suggested that the GOM should very soon start identifying 
potential producers/exporters to expedite the APHIS 
inspections as soon as possible following publication of the 
regulations. 
 
¶4.  (U) Blueberries/Raspberries:  Maazouz acknowledged 
USAID,s technical assistance to Morocco regarding blueberry 
and raspberry exports to the U.S.  In September 2008, Maazouz 
recalled, the GOM submitted a technical proposal requesting 
APHIS to add these berries to the list of products eligible 
for entry to the U.S.  The GOM strongly desires that APHIS 
process the berry request more quickly than the ongoing 
tomatoes case, Maazouz said, and Morocco is ready to receive 
an APHIS risk assessment team as soon as possible to expedite 
the review process.  AgCouns informed the Minister that the 
Foreign Agricultural Services (FAS) stands ready to work 
closely with APHIS to facilitate the inspection process, and 
undertook to explore with APHIS the feasibility of the 
Ambassador,s suggestion to combine the APHIS visits to 
approve the tomato greenhouses and conduct the risk 
assessment for the berries. 
 
¶5.  (SBU) Olives and Wheat:  The GOM is still waiting for a 
USG response to its request to accelerate the tariff 
reduction to the one olive line item, Maazouz stated. 
Recalling USTR,s March 2008 letter regarding wheat Tariff 
Rate Quotas (TRQs), Maazouz reminded the Ambassador that the 
GOM sent an official response to USTR last week.  AgCouns 
acknowledged that the response has been received and told the 
Minister that the USG is reviewing the letter.  Maazouz 
emphasized the GOM,s desire to change the common wheat TRQs 
year from a calendar year basis, as stipulated in the FTA 
text, to a marketing year basis to facilitate the use of the 
quotas. 
 
--------------- 
Customs Matters 
--------------- 
 
¶6.  (SBU) Transshipment:  Maazouz and the Ambassador reviewed 
the different U.S. and Moroccan interpretations of points of 
origin for goods that undergo transshipment.  Maazouz 
reiterated that the GOM believes only shipments that depart 
the U.S. following an order from a Moroccan customer (as 
reflected in an invoice or bill of lading) may benefit from 
the FTA provisions if they transit a third country. 
Bilateral Trade Director Souad Benanni stated that the text 
of the accord is clear on transshipment matters, and asserted 
that the U.S. was responsible for including provisions 
regarding direct shipment in the FTA.  Nevertheless, Minister 
Maazouz agreed that the U.S. position on transshipment is 
logical, but said the GOM is concerned that products entering 
Morocco from a third country would carry greater risks of 
disease or spoilage.  He urged the USG and GOM to find a 
&mutually agreeable solution8 to the disagreement.  The 
Ambassador noted that U.S. trade officials accord direct 
shipment treatment to Moroccan goods that are first exported 
to Europe before distribution to U.S. retailers and the USG 
does not expect or observe greater risks from these products. 
 
------------ 
Other Issues 
------------ 
 
¶7.  (U) Non-Conforming Measures in Services:  The GOM awaits 
a response to the revision in Morocco,s schedule of 
non-conforming measures in services, Maazouz observed.  He 
pointed to the April 2008 letter of former Assistant USTR 
Shaun Donnelly undertaking to finalize the issue through an 
exchange of letters within weeks.  Morocco hopes this issue 
could be resolved before Wilson,s visit to Morocco. 
 
¶8.  (SBU) Technical Assistance:  Maazouz expressed concern 
that MEPI funds for FTA technical assistance may not be 
available in 2009.  EconOff informed the Moroccans, as 
indicated by prior communications through USTR, that MEPI 
plans to fund the FY 2009 technical assistance work plan 
developed by the Commercial Law Development Program (CLDP) in 
consultation with the GOM and USTR.  However, she continued, 
the USG and GOM need to consider other possibilities of 
securing funding for FY 2010 and beyond.  The Ambassador, 
AgCouns and Econoff also reviewed other ongoing and potential 
USG-funded technical assistance programs, such as customs 
controls training, USAID programs, and technical assistance 
and capacity building programs through FAS. 
 
--------------------------------------- 
Hoping to Resolve Issues through Visits 
--------------------------------------- 
 
¶9.  (SBU) Despite specific implementation concerns, Minister 
Maazouz judged the overall results of the FTA in 
strengthening trade, market access, and investment as 
positive.  Total bilateral trade has more than doubled since 
the FTA entered into force and 2008 has been the best year 
yet for Moroccan exports to the U.S.  Moroccan exports for 
the first ten months of 2008 were 50 percent higher than 
total 2005 exports (USD 520 million in 2005 versus USD 749 
million in the first 10 months of 2008).   The outstanding 
issues are &small8 in comparison to the overall success of 
the FTA, Maazouz said.  Unfortunately, he opined, the USG and 
GOM have taken a stance on the remaining issues as if the 
discussion were a boxing match where each party must defend 
its stance and not back down.  Maazouz asserted that we must 
consider each other,s viewpoints in order to come up with an 
agreeable solution to the pending issues.  The Ambassador 
closed the meeting by promising to present to USTR the GOM 
concerns, in particular getting an update on the 
non-conforming measures in services and the exact dates of 
Assistant USTR Wilson,s trip to Morocco. 
 
 
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Riley