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Viewing cable 09RABAT276, US-MOROCCO FTA STUDY REVEALS "TO WIN THE LOTTO,

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Reference ID Created Released Classification Origin
09RABAT276 2009-04-03 10:26 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Rabat
VZCZCXYZ0003
RR RUEHWEB

DE RUEHRB #0276/01 0931026
ZNR UUUUU ZZH
R 031026Z APR 09
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC 9904
INFO RUCNMGH/MAGHREB COLLECTIVE
RUEHCL/AMCONSUL CASABLANCA 4549
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS RABAT 000276 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR NEA/MAG, EEB/TPP 
DEPT PLEASE PASS USTR CHRIS WILSON AND PAUL BURKHEAD 
 
E.O. 12958: N/A 
TAGS: ETRD ECON ECIN EAGR MO
SUBJECT:  US-MOROCCO FTA STUDY REVEALS "TO WIN THE LOTTO, 
ONE MUST BUY A TICKET" 
 
REF: A. RABAT 00271 
     B. RABAT 0190 
 
1. (SBU) Summary: A study of Morocco,s Free Trade Agreements 
(FTAs) commissioned by private enterprise and released in 
late March, concluded that Moroccan firms are not seizing 
opportunities that exist in the U.S. market. The report 
formed the backdrop for Assistant United States Trade 
Representative Christopher Wilson's March 19-20 visit to 
Morocco to lay the groundwork for the second annual Joint 
Committee Meeting in May, and generated a lively public 
debate of the impact of the U.S.-Morocco FTA.  While arguing 
that most benefits of the FTA have gone to U.S. exporters, 
the report largely attributed this lopsided outcome to the 
failure of Moroccan businesses to take advantages of the 
available opportunities, as well as the failure of the 
Moroccan Government to ensure that the agreements were 
accompanied by a coherent export strategy. End Summary. 
 
------------------- 
FTA REPORT UNVEILED 
------------------- 
 
2. (SBU) The USTR visit coincided with the release of the 
General Confederation of Enterprises (CGEM)-commissioned 
report on "Free Trade Agreements: Opportunities Offered to 
Morocco."  The study authors, from the French consulting firm 
Roland Berger, presented the results on March 24 to a meeting 
that grouped CGEM, the National Council of Foreign Trade, 
including Ministry of Foreign Trade Secretary General El Aid 
Mahsoussi, and Embassy officers (A/DCM and Econoff). The 
report concluded that the FTA has strongly benefited U.S. 
exports, which have tripled since the FTA went into force in 
2006, while Moroccan exports to the U.S. have grown at an 
annual rate of 22 percent through 2007.  The authors 
concluded that the lopsided outcomes are due to Moroccan 
exporters failing to seize opportunities in the U.S. market 
for largely internal reasons. 
 
----------------------- 
RESULTS AND CONTROVERSY 
----------------------- 
 
3. (SBU) The top reasons, according to the report, as to why 
Moroccan exporters are not taking advantage of the FTA 
include lack of knowledge of the market and its norms; 
limited capacity by Moroccan exporting companies to meet the 
demands of U.S. importers;  lack of an effective export 
promotion strategy; and weak internal logistics. The study 
did identify a number of Moroccan products that are export 
competitive for the U.S. market, however, including clothing, 
essential oils and perfumes, shoes, animal and vegetable 
lubricants and oils, and canned foods. While participants 
welcomed the positive message, they urged that it be refined 
to be of practical utility. The report's general export 
promotion advice for broad sectors, they argued, is not 
useful to help market individual products in an unknown 
market. They also urged greater attention to the fact that 
the value added in Moroccan exports constitutes only 30 
percent of the headline figures, given that much of the total 
is made up of re-export of goods that were temporarily 
admitted to Morocco for processing. This reality, some 
present argued, reflects Morocco's greatest "handicap:" the 
sub-contracting model it has adopted to meet the demands of 
European partners is not in high demand with potential U.S. 
importers. 
 
--------------------- 
FURTUNATE COINCIDENCE 
--------------------- 
 
4. (SBU) The results of the CGEM study generated massive 
press coverage during the week of Wilson's visit and focused 
attention on the need for Moroccan businesses to more 
aggressively exploit the opportunities offered by the 
agreement. French language daily Le Soir recently summarized 
this message noting that "To win the lotto, one must buy a 
ticket."  Wilson used the press interest generated by the 
study to highlight the positive achievements of the FTA to 
date, including an increase in bilateral trade from USD 1 
billion in 2006 to around USD 2.5 billion in 2008. He also 
acknowledged throughout the visit the work the GOM and 
business community is doing, by commissioning such studies 
and formulating recommendations and support for industry, to 
take full advantage of the opportunities the FTA has to 
 
offer. 
 
5. (SBU) Comment: The conclusions and recommendations offered 
by the study were not groundbreaking. The GOM has been well 
aware of Moroccan exporters' concerns with the U.S. market 
and has already started taking action to hone its export 
promotion strategy (Ref B). Despite a sometimes defensive 
response to the report during the March 24th presentation, 
all agreed with its underlying conclusions, while suggesting 
that a more detailed sectoral examination would be even more 
useful.  Widespread recognition that Moroccan businesses must 
step up their efforts to take advantage of the FTA marks a 
welcome step forward in public discussion of the agreement 
and its benefits. End Comment. 
 
 
***************************************** 
Visit Embassy Rabat's Classified Website; 
http://www.intelink.sgov.gov/wiki/Portal:Moro cco 
***************************************** 
 
Jackson