Note: Advance written questions by WTO Members and replies provided by the Government of
Morocco are reproduced in document WT/TPR/M/116/Add.1 and will be available online at:
http://www.wto.org/english/tratop_e/trp_e/tp_rep_e.htm.WORLD TRADE
ORGANIZATIONWT/TPR/M/116
18 August 2003
(03-4288)
Trade Policy Review Body
16 and 18 June 2003
TRADE POLICY REVIEW
KINGDOM OF MOROCCO
Minutes of Meeting
Chairperson:  H.E. Mrs Mary Whelan (Ireland)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3
II. OPENING STATEMENT BY THE REPRESENTATIVE OF THE
KINGDOM OF MOROCCO 4
III. STATEMENT BY THE DISCUSSANT 6
IV. STATEMENTS BY PARTICIPANTS 8
V. REPLIES BY THE REPRESENTATIVE OF THE KINGDOM OF MOROCCO AND
ADDITIONAL COMMENTS 13
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 18WT/TPR/M/116
Page 3
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The third Trade Policy Review of Morocco was held on 16 and 18 June 2003.  The
Chairperson welcomed the delegation of Morocco, headed by Minister Mustapha Mechahouri, and the
discussant H.E. Mr. Michel ADAM (Belgium).  As usual, the discussant spoke in his personal
capacity and not as a representative of his country.  In accordance with established procedures, he hadmade available in advance an outline of the main points he intended to raise (document
WT/TPR/D/95).
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures of the meeting.  The Report by the Government of Morocco was contained in
document WT/TPR/G/116 and that of the Secretaria t in document WT/TPR/S/116.  The delegation of
Morocco had received copies of advance written questions submitted by Chinese Taipei, Indonesia,
Japan, Argentina, Switzerland, Norway , European Union, Canada and Brazil.
3. The Chairperson noted that the documents prepared for the meeting emphasized the efforts
made by Morocco since its last Trade Policy Review in 1996 to reform its economy, contain inflation
and ensure economic stability despite the recurrent droughts.  Morocco had abolished virtually all
quantitative trade restrictions.  Price controls and marketing monopolies had been abolished on almost
all goods and services, and consumer subsidies were now limited to a few products.  Customs dutieshad been lowered on certain non-agricultural products.
4. However, she noted that the tariff reform, with the disaggregation of tariff lines, and the
application of rates resulting from the tariffication of quantitative restrictions and the incorporation of
the fiscal import levy (PFI) into customs duties, had increased the simple arithmetic average of rates
and resulted in more than one third of the tariff lines being higher than bindings.  Variable dutiescontinued to be applied.  In her view, Morocco would be able better to fulfil its multilateral
commitments by pursuing its trade reforms, in particular by simplifying tariffs (abolishing variable
duties, lowering the number and level of rates).
5. The Chairperson gave the floor to the Minister of Trade for Morocco for his opening
statement on behalf of his delegation.WT/TPR/M/116
Page 4
II. OPENING STATEMENT BY THE REPRESENTATIVE OF THE KINGDOM OF
MOROCCO
6. After thanking the Chairperson, the Minister stressed the importance of the TPRM.  It helped
Members to understand the trade policies of Member States and allowed the country under
examination to draw the appropriate conclusions.
7. After having observed that the meeting was taking place a few months before the Cancún
Ministerial Conference at a time when WTO Members were actively engaged in working towards a
balanced outcome that would specifically reflec t the "development dimension" of the Doha Round,
the Minister reiterated Morocco’s attachment to the multilateral trading system and its fundamental
principles, underlining that in 1989, Morocco was one of the first countries to agree voluntarily to the
TPRM under the GATT.
8. The Minister presented the main developments in Morocco’s trade policy since its last Trade
Policy Review in 1996.  The reforms drew on political and socio-economic objectives that aimed at
strengthening the rule of law and democracy, economic liberalization and building strong economic
growth.  Morocco had stepped up the process of liberalization, in particular by further tariff reduction,
simplifying foreign trade procedures, eliminating non-tariff measures, creating an environment that
favoured business and investment, broadening and diversifying its trade relations, and contributing tothe consolidation of the multilateral trading system.
9. The measures taken also aimed to bring domestic legislation in line with WTO rules, to
enhance institutional facilities for cooperation with the private sector, and to reinforce the private
sector’s role in economic development.  Morocco had thus set up a Charter to improve the investment
environment with the aim of stimulating economic development.  It had also simplified investment
procedures, promoted regional economic developm ent and set up Regional Investment Centres
(CRIs), which were single windows aiming to foster the creation of enterprises and provide support
for investors.  Morocco had continued the privatization programme first launched in 1993.  The partial
privatizations of Maroc Telecom  in 2000 and the Régie des Tabacs  in 2003 had been successful and
highlighted foreign investors’ confidence in Morocco.
10. Foreign Trade Law No. 13-89 and its implementing texts had been amended in order to bring
them in line with Morocco’s commitments under the WTO Agreement on Agriculture and Agreement
on Safeguards.  Customs procedures and foreign trade formalities had also been significantly
simplified since 1996, and the clearance of goods was now completed in less than one hour, compared
to five days prior to 1997.
11. Morocco had also continued its tariff reforms.  The aim of the different measures taken was to
comply with its WTO commitments, promote investment, improve the Moroccan economy’scompetitiveness, reduce the effects of droughts and combat smuggling.  In July 2000, the fiscal import
levy (PFI) was incorporated into the customs tariffs with the aim of simplifying imposition at the
border.  This integration had not affected Morocco’s tariff commitments; applied customs duties were
overall below bound rates.  With regard to tariff lines whose applied rates were slightly above bound
rates, reductions would be quickly instigated in order to meet Morocco’s commitments.
12. To enhance the country’s business environment, Morocco had set up commercial courts for
trade disputes, including intellectual property. Legislation on government procurement and
competition entered into force in 1999 and 2001 respectively.  Morocco had also thoroughly
overhauled its intellectual property legislation by adopting three new laws on: the protection of
industrial property (whose implementing texts were in the process of being adopted); copyright andrelated rights; and new varieties of plants. These laws have been found to be consistent with the
TRIPS Agreement.WT/TPR/M/116
Page 5
13. All the reforms had met the anticipated objectives, as could be seen from the positive results
recorded despite an unfavourable economic environment caused in particular by four years of drought
(1996-01).  Overall, the Moroccan economy had recorded satisfactory results despite the fluctuations.
Annual average economic growth was buoyant at 3.9 per cent, and the macroeconomic balances had
been maintained.  Similarly, inflation had been contained and brought down to 0.6 per cent in 2001.Morocco had increasingly opened up to foreign trade, with 52 per cent in 2002 against 45 per cent in
1996, totalling 21 billion euros compared with 14 billion euros.  Investment had increased by an
annual average of 6.1 per cent, from 5.7 billion euros in 1996 to 9 billion in 2002.  Privatization and
concessions had boosted revenue from foreign private investments and loans, which had moved from
500 million euros in 1995 to 3.9 billion in 2001.
14. The process towards openness and liberalization had been furthered by the signing of a
number of bilateral and regional free trade agreements consistent with the principles and rules of themultilateral trading system.  Morocco reaffirmed its at tachment to the multilateral trading system and
trade liberalization which it considered beneficial for growth, development and prosperity.
Nonetheless, it underscored the urgent need for th e benefits to be equitably distributed among all
countries.
15. An ambitious work programme had been agreed at the Doha Ministerial Conference to meet
the concerns of developing countries.  However, the Minister observed that eighteen months later, the
results were below expectations, most of the deadlines having not been met.  With the Cancún
Conference approaching, there were still divergent viewpoints concerning development-related issues,
such as the implementation of the TRIPS declaration and public health, the reform of special and
differential treatment, and aspects relating to the implementation of WTO agreements and decisions.The Minister called on all parties to work together in a constructive and positive way in order to reach
even-handed results.
16. In conclusion, the Minister underlined that the economic reforms engaged by his country
were part of an ongoing process of adaptation to the changes and demands of the international
environment.  He also stressed Morocco’s determinat ion to join its efforts to those of the other WTO
Members in order that the multilateral trading system develop in a stable, predictable and equitable
manner.WT/TPR/M/116
Page 6
III. STATEMENT BY THE DISCUSSANT
17. The discussant welcomed Morocco’s continued economic reforms since 1996, despite the
persistence of the drought.  The efforts made to diversify the economy seemed however to have
helped Morocco circumvent the drought’s effects and register good levels of economic growth.  He
requested information on Morocco’s plans to combat the drought and to implement structural reforms.
18. Although there was an upward trend in foreign dire ct investment, it remained relatively weak.
It was to a great extent influenced by the privatization and restructuring of State enterprises.  The
discussant asked for details on how the role of these investments was perceived, and how the general
business environment — competition policy and governance — could influence the level of
investments.
19. Morocco was an original Member of the WTO and considered the multilateral trading system
and trade liberalization to be beneficial for growth and development, provided that the benefits wereequitably distributed among all countries.  Morocco therefore argued in favour of a reinforcement of
technical cooperation in the field of trade, provisi ons regarding special and differential treatment, and
measures in favour of LDCs.  The discussant asked Morocco to provide more details about its
experience of the multilateral trading system, and especially about its efforts to mainstream trade into
its development strategy.  He also asked for explanations concerning the way Morocco managed itsmembership of several trade agreements, whose geographical scope was substantially different; he
enquired whether the application of such agreements, which were sometimes reciprocal, did not make
Morocco’s trade regime more complex, and whether harmonization would not be beneficial to trade.
20. Commenting on trade policy instruments, the discussant welcomed the fact that the many
changes to the trade regime introduced since 1996 had put an end to quantitative restrictions on theimporting of most products, and substantially reduced customs clearance times with a view to
improving transparency.  Customs duties had been lowered on certain non-agricultural products.
However, the incorporation of the relatively high fiscal import levy (PFI) into customs duties together
with the application of rates resulting from tariffication and the disaggregation of tariff lines from
eight to ten digits in the Harmonized System had meant a rise in the average duty applied from 23.5per cent in 1995 to 33.4 per cent in 2002, with ad valorem  duties that could reach 339 per cent.  The
discussant asked for clarifications on the rationale of this policy, and for details about the mixed
escalation of customs duties and the various other duties and taxes on imported products.  He felt that
a simplification was necessary.
21. The discussant noted that the applied rates for over one third of the tariff lines were higher
than the bound rates.  Measures aimed to bring applied rates below this level and to simplify their
structure would be welcome.  He also questioned whether the imposition of variable duties, based on
reference prices, was in accordance with Morocco’s commitments as regards tariff binding and
customs valuation.
22. Some people might object to the high level of locally-made components that is required in the
automobile assembly industry in exchange for certain advantages.  Similarly, the continued existence
of certain subsidies — in particular for the promotion of exports of certain agricultural products by airfreight — could seem to be in contradiction with the levies applied to exports of certain products
including phosphates.
23. The discussant was pleased to note the rationalization of the various customs duties
exemption and reduction schemes introduced since 1996, and the lack of problems relating to
domestic taxes.  The fact that price controls and marketing monopolies had been virtually eliminated,with the notable exception of crude phosphates, wa s also a significant step forward, as was theWT/TPR/M/116
Page 7
coming into force of legislation on government procurement and competition.  The discussant asked
for more details on the methods used to award contracts and the thresholds used.
24. As regards sectoral policies, agriculture was the most protected sector in Morocco.  The
discussant requested additional information from the Moroccan delegation on their view of the State’s
role and involvement in this sensitive sector, particularly as regards food safety and self-sufficiency.He also called on the Moroccan delegation to rethink its position in the light of the ongoing
agricultural negotiations within the Doha Development Agenda.
25. The discussant requested additional information from the Moroccan delegation on the
situation regarding phosphate exports, which remained a State monopoly, and on the State’s role and
involvement in the electricity and petroleum products subsectors, in particular with regard to
tariffication.  As a reform in the energy sector could help improve productivity, he requested
information on plans and deadlines.  He also asked for information on developments in the textile andleather industry, which the authorities were clearly intending to make competitive, since it was being
liberalized world-wide.  This industry had, moreover , suffered from difficulties in securing supplies
because of diseases and epidemics that had affected livestock in some countries.
26. Finally, the discussant noted that the services sector, where Morocco is a net exporter, was
benefiting from the many reforms that had been initiated.  However, Morocco’s commitments asregards GATS often seemed to fall short of a real opening up of the market.  It seemed justified to
invite Morocco to bind its commitments in order to build up confidence in the relevant sectors.WT/TPR/M/116
Page 8
IV. STATEMENTS BY PARTICIPANTS
27. Members welcomed the Moroccan delegation, led by Minister Mustapha Mechahouri, and the
discussant, H.E. Mr. Michel ADAM.  Members praised Morocco for its ongoing efforts to reform and
diversify its economy, its commitment to the multilateral trading system and its active participation in
current negotiations.  They encouraged Morocco to continue the good work.  Several Memberspraised Morocco’s work as coordinator of the African Group.  Some Members expressed the hope
that the recent bombings in Casablanca would no t slow down economic reform or have a negative
impact on tourism.
28. The representative of Chinese Taipei paid trib ute to Morocco for its commitment to liberalize
its trade and the success of its privatization programme launched in 1993.  He also noted the increase
of transparency in government procurement and customs procedures, and said that Morocco’s active
participation in the multilateral trading system was an example for all Arab and African countries.
29. The representative of Japan praised Morocco’s economic reforms in fields such as
investment, intellectual property and trade regulations, and hoped it would continue to promote such
reforms.  Japan hoped Morocco would consider re ducing the difference between its MFN customs
duties and its preferential duties, thereby increasing its trade relations with countries with which it had
not signed preferential trade agreements.  The representative believed that the positive results of theDoha Development Agenda would be beneficial to all WTO Members.
30. Argentina shared Morocco’s view that the bene fits of the multilateral trading system should
be shared in a more equitable manner, and more attention be given to Member countries’ domestic
concerns, especially concerning development.  Argentina stressed the need to cooperate in order to
reach positive results at the end of the current round of negotiations.  Argentina’s representativepraised Morocco’s efforts to improve the business environment, especially for SMEs, and the
investment environment, and urged Morocco to continue the good work.
31. The representative of Switzerland said that his country supported the measures taken by
Morocco to reform its tariffs, liberalize its trade, reduce customs clearance times, and overhaul its
legislation on intellectual property.  He also noted the fields in which efforts were necessary toconform with WTO rules, such as the respect of bound rates and customs valuation.  Switzerland
asked for clarification about the regime governing the production of locally-made components in the
automobile industries and the compensation mechanism based on the export of spare parts.
32. Switzerland had noted Morocco’s position in the current negotiations in favour of different
levels of reduction for customs duties for developing countries and LDCs.  The representative
wondered whether the average level of tariffs maintained by Morocco on manufactured products was
not such as to undermine its comparative advantages and dissuade certain investors.  He was pleasedto note that Morocco backed the proposal to extend the protection given by geographical indications
to products other than wine and spirits.
33. The representative of Norway asked whether Morocco was not concerned by the fact that
customs duties on industrial products were still particularly high for its southern partners as a result of
its free trade agreements with its main northern partners.  He also asked whether it was not inMorocco’s interest to support a generalized elimination of tariffs on industrial products, with
appropriate delays for developing countries.  The representative recalled that his country was still
waiting for Morocco’s initial proposal on services and asked for an outline of Morocco’s intentions,
especially in the insurance and maritime services fields.  He also asked for details on the projects for
abolishing the remaining legislative and practical obstacles to setting up foreign companies inMorocco, the way in which Morocco was considering facilitating the situation for foreign investors,
and its position on the WTO investment agreement.WT/TPR/M/116
Page 9
34. The representative of the United States no ted Morocco’s commitment to the multilateral
trading system and its role in highlighting the need to reinforce technical cooperation, capacity
building and policies in favour of LDCs.  She praised Morocco’s efforts to reduce its customs duties,
abolish non-tariff barriers, improve the investment climate, strengthen the legislative framework for
trade, and tackle reforms in the agricultural sector.  However, she noted that changes were necessaryin such fields as the application of customs duties to make them consistent with Morocco’s
commitments, and the application of taxes such as VAT and the wood tax, on a national treatment
basis.  She asked for clarifications on the development and application of industrial standards, the
protection of undisclosed information and adherence to various international agreements on
intellectual property.
35. The European Union (EU) congratulated Morocco on its efforts during recent years to
consolidate positive macroeconomic development, and noted with satisfaction the positive forecasts
on price stability and reduced unemployment.  However, the EU representative had the impression
that the Moroccan economy and its trade potential were still fragile.  He thus appreciated the reforms
undertaken in recent years, and encouraged Morocco to continue with them, notably those addressing
the public service, education and taxation.  The EU also encouraged Morocco in its intention to
develop and exploit its potential and its growth sour ces, particularly in agriculture, industry, tourism,
transport and communications.
36. However, the EU representative stressed that the abolition of the price reference system
should apply to all products, including used goods, and that customs values should be determined in
accordance with the WTO Agreement.  He regretted the fact that for two years Morocco had
maintained quantitative restrictions on leather and raw hides and skins exports.  The EU hadencouraged Morocco to continue with its reform  of the trade regime, focussing not only on the
liberalization of the agricultural sector,  but also on the simplification of tariffs by abolishing variable
duties and by reducing the number and level of rate s.  He praised the Agadir Declaration, signed on
8 May 2001 by Morocco, Jordan, Egypt and Tunisia, as a significant stage in the realisation of a Euro-
Mediterranean free-trade zone.
37. Canada praised Morocco’s efforts to develop and apply the restructuring and privatization
programme and encouraged Morocco to go further.  The Canadian representative said he was in
agreement with Morocco on the importance of fundamental reform of agriculture, of addressing
developing countries’ needs and making tangible advances in the current negotiations.  Canada
appreciated Morocco’s abolition of subsidies and its commitment to liberalize the agricultural sector,
which nonetheless was still very protected.  He invited Morocco to consider the question of its high
ad valorem  customs duties during the ongoing agricultural negotiations.
38. The representative of Brazil noted Morocco’s efforts to reform its economy, combat the
drought, and diversify its economy.  In its capacity as a developing country, Brazil said it was aware
of the difficulties in reforming the financial and trade sectors in order to achieve full integration into
the world economy.  The representative said he was particularly interested in the information about
Morocco’s application of the agreements on anti-dumping measures, and on subsidies andcountervailing measures.  Brazil was in agreement with Morocco that their main partners could do
more to help developing countries to benefit from reforms and to ease the process of structural
adjustment.
39. The representative of Malaysia congratulated Morocco on its economic reforms in such fields
as trade and investment, and on its macroeconomic results, namely the low inflation rate or the
improvement in the balance of payments.  He nevertheless stressed that certain trends, such as the
high rate of unemployment, were cause for worry.  He asked for clarifications on the reasons why the
proportion of agriculture in GDP had decreased, the alignment of the application of customs dutiesWT/TPR/M/116
Page 10
with Morocco’s WTO commitments, and the reassessment of the use of variable rates.  He also urged
Morocco to trade more with coun tries other than EU countries.
40. Venezuela congratulated Morocco on the reforms of its trade regime, namely the
strengthening of the institutional and legal framework, the signing of bilateral and regional trade
agreements, and the acceleration of customs procedures inter alia.  The Venezuelan representativeshared the Moroccan view on the need to ensure that liberalization was a real development
opportunity for developing countries.
41. The representative of Egypt praised Morocco’s attachment to the multilateral trading system,
clearly manifested in its active participation in the WTO negotiations, and the fact that many free
trade agreements had been signed.  As regards the difficulties Morocco was experiencing to respect its
commitments with respect to bound rates, he said he was in favour of granting a margin of flexibility
for developing countries in order to protect certain sensitive sectors, especially when non-respect ofobligations is temporary and dependent on the economic situation.
42. The representative of Bahrain congratulated Morocco on its trade and structural reforms, the
reform of its customs procedures, the abolishing of subsidies, tariff bindings, and the adoption of new
legislation on intellectual property rights, government procurement, competition policy and
investment.
43. India said it was encouraged by Morocco’s strong economic performance, its ability to
diversify its economy and to cope with the recurrent droughts.  However, the representative
underlined that the Government should address the issue of applied rates being higher than bound
rates.  He also trusted that Morocco’s many preferential trade agreements were in compliance with
WTO rules.
44. The representative of Mauritania noted that Morocco’s determination to conform to its WTO
commitments could be seen in the promotion of investment, the control of government finance, the
tariff reform, the improvement of trade facilitation procedures, tariff bindings, the application since
1998 of the Agreement on Customs Valuation and the revision of legislation on intellectual property.
He underlined Morocco’s efforts to strengthen the regional dimension of its foreign trade by signing aseries of trade agreements.  Mauritania commended Morocco’s initiative in favour of LDCs, which
had been launched in 2000, and which showed its determination to contribute to making the
multilateral trading system more just and equitable.  The representative called on the international
community to strengthen its support for Morocco in order to contribute to the success of its economic
and trade policies.
45. The representative of Senegal underlined that the reforms undertaken by Morocco in order to
adapt its policies to WTO rules were an example of a developing country’s commitment to respect the
core principles of the WTO.  He appreciated the tariff reforms, the easing of foreign trade procedures,
or the dismantling of marketing monopolies in agricultural products, and stressed the importance of
Morocco’s free trade agreements with the developed countries which were a source of inspiration for
the ACP countries.  He appreciated the gesture of solidarity that Morocco had shown through its
initiative in favour of LDCs, and shared Morocco ’s view on the need to give all members of the
multilateral trading system the opportunity to benefit from world trade for their economic and social
development.
46. Turkey appreciated Morocco’s success in carrying out its reforms, resulting in a relatively
stable macroeconomic environment, a small current-account deficit and stable government finances.
However, the representative of Turkey raised the question of strong protection in the manufacturingand agricultural sectors, and urged Morocco to further liberalize its foreign trade.WT/TPR/M/116
Page 11
47. The representative of Kenya praised Morocco’s economic reforms, which had resulted in the
stability of the fundamental macroeconomic parameters, and commended its rate of economic growth,
despite the repeated droughts.  Given the role played by trade liberalization, Kenya encouraged
Morocco to pursue its efforts in this field.  Kenya shared Morocco’s position on such questions as the
need to distribute the benefits of the Doha Devel opment Agenda in an equitable way to all Members;
the importance of agriculture and its liberalization in such a way as to benefit developing countries
and LDCs; an immediate solution to the issue of TRIPS and public health; special and differential
treatment; and an increase in technical assistance and capacity building programmes for these
countries.
48. The representative of Indonesia commended Morocco’s success in bringing down its customs
duties on certain products and in incorporating the fiscal import levy (PFI) into the customs tariffs.
However, he asked Morocco to comment on the increase in the simple arithmetic average of its tariffs,and the application of rates higher than bound rates.  He also asked for clarifications regarding the
commitment to imports and whether this commitmen t was consistent with the Agreement on Import
Licensing Procedures, and whether the Single De claration of Goods (DUM) was consistent with
Article 2 of this Agreement.  The majority of the high customs duties were still applied in order to
protect domestic industries.  With regard to contingency trade measures, he asked whether theprovisional measures, such as the prior import declaration (DPI), were also applied to procedures
concerning anti-dumping and safeguard measures.
49. The representative of Tunisia praised Morocco for the efforts made to liberalize its economy.
He noted the Moroccan Authorities’ resolve and determination to continue working along these lines,
as could be seen from the different institutional and legislative measures, such as the establishment ofthe National Foreign Trade Council (CNCE), the refo rm of the Customs Code, the adoption of a law
on competition and three new laws on the protection of intellectual property, or the updating of the
legislative framework for government procurement.  He also stressed the need to work together to
further the emergence of a free-trade zone between Arab Maghreb Union (AMU) countries.
50. Nigeria noted the remarkable reforms that Morocco had undertaken to open up its economy
and improve the standard of living of its people.  The representative congratulated Morocco on this
liberalization which had generated economic growth, and hoped that this success, together with
Morocco’s prominent position, would continue to further economic growth and African integration.
51. The representative of Singapore praised Morocco for its years of strong economic growth,
despite the droughts, and for its structural and legisl ative reforms, notably with regard to intellectual
property, competition, and government procurement.  She also underlined the importance of
discussions with the private sector before drafting legislation on foreign trade, and noted Morocco’ssubstantial commitments in the field of services.  As regards trade in goods, Singapore was waiting
for complete application of commitments, and the simplification and further reduction of tariffs on
non-agricultural products.
52. The representative of Uruguay praised the economic reforms, which had introduced different
changes into the trade regime, such as the binding of all the tariff lines at  ad valorem  rates, and hoped
that the necessary reforms would be pursued in order to ensure that the application of variable rates
was in conformity with Morocco’s commitments.  She appreciated the role that Morocco had played
in the current negotiations on the concerns of developing countries.
53. The representative of Jordan welcomed the fact that Morocco, one of Jordan’s important
trading partners, was moving towards progressive liberalization and fully participating in the
multilateral trading system.WT/TPR/M/116
Page 12
54.  Mauritius appreciated the fact that Morocco had been very active in fine-tuning the African
position on different subjects during the negotiations and had organized interactive work sessions with
the main trading partners.  The representative noted the reforms undertaken by Morocco, namely the
simplification of customs procedures, the abolition of subsidies on several products, and the
introduction of incentives to invest in free export zones, or the structural reforms.  She was pleasedthat economic diversification had allowed Morocco to limit the effects of drought.
55. The representative of the Czech Republic noted the positive macroeconomic developments in
the Moroccan economy, with the application of a so und development strategy, the structural reforms
and the improvement in the trade regime.  She encouraged Morocco to continue with its trade
reforms, by simplifying the tariff structure, abandoning variable tariffs and reducing the number and
level of its tariff rates.  She hoped that Morocco would make its investment environment more
transparent and predictable.
56. Panama congratulated Morocco on its work as coordinator of the African countries, and
especially for its work in the fields of cooperation and institution building.
57. The representative of the Republic of Korea stressed that Morocco’s commitment to trade
liberalization could be seen in its active participation in the multilateral trading system and in its
economic reforms.  He congratulated Morocco on having improved the foreign investmentenvironment.  However, he noted that more than two weeks were necessary to obtain a visa and asked
if the Government could simplify the procedure for foreign investors.
58. The representative of Kuwait, speaking on behalf of Oman, Qatar, Kuwait and the United
Arab Emirates, noted that Morocco had made all the necessary efforts to bring its trade policy into
conformity with the rules of multilateral trade and the WTO agreements.  He also expressed hissupport for Morocco’s trade policy.
59. The representative of Romania stressed the need for developing countries to preserve their
customs tariffs within the multilateral framework, and hoped that Romania might work with Morocco
in such fields as agriculture or trade-related measures.WT/TPR/M/116
Page 13
V. REPLIES BY THE REPRESENTATIVE OF THE KINGDOM OF MOROCCO AND
ADDITIONAL COMMENTS
60. After having thanked the speakers for their encouragement and support for his Government’s
economic reform programme, aiming to create the conditions for stronger growth, the representative
of Morocco recalled that this programme came within the framework, inter alia, of a continual processof adaptation to the demands of the international environment.
61. The representative noted that as there could be no strong and lasting growth outside a
framework preserving the main macroeconomic balances, during recent years Morocco had
implemented policies allowing it to consolidate these balances and create conditions more conducive
to the revival of growth.  Over and above the results presented in the Reports by the Government and
the Secretariat, the results obtained in 2002 and those expected in 2003 would confirm that Morocco
had succeeded in stabilizing its macroeconomic framework.  Thus in 2003, GDP growth should beabout 5.5 per cent, inflation below 2 per cent and for the third consecutive year, the current account
should show a surplus of about 2.5 per cent of GDP (against 4.9 per cent in 2001 and 3.7 per cent in
2002).  The Government deficit should be contained within the limits stipulated by the 2003 Budget
Law, namely 3 per cent of GDP.
62. The representative emphasized that Morocco had made great efforts to lessen the effects of
the drought by implementing a programme to combat drought, costing 700 million US dollars in
2000-2001.  The programme mainly focussed on bringing drinking water to the rural sector and
protecting livestock.  At the same time, measures had been taken to speed up the implementation of
sectoral programmes aiming to foster the diversified and sustainable development of rural sector
activities, through further efforts to improve irrigation, reforestation, the hydraulic infrastructure andelectrification, and to improve access to rural areas and build social facilities.
63. Alongside horizontal reforms affecting the administration, the law, public education and other
social issues, many reforms had been instigated to improve the environment and investment, and to
revive economic activity.  These reforms included the reform of the financial sector, aiming to bring it
into line with international practice; the reform of the transport sector with the liberalization of road,
maritime and air transport; the revitalization of the privatization process through the sale of new
companies and incentives to open up certain state in stitutions to private capital; the commitment to a
substantial programme to strengthen infrastructures around several projects, including the Tanger-
Mediterranean port, the extension of the motorway network, and the Coastal Plan (Plan Azur) to
develop tourism; the rationalization of investments by public establishments (performance contracts
for the Moroccan Navigation Company (COMANAV), the National Railway Board (ONCF) and
Royal Air Maroc (RAM)); the tax reform, with the restructuring of local taxes and the reduction ofincome taxes, and the agreement signed by all the social partners on 30 April 2003 at the end of
discussions.  The agreement could herald rapid moves towards the adoption of new labour legislation
and social peace.
64. The representative reminded Members that as far as the instruments of trade policy were
concerned, the changes in customs tariffs reflected the trade liberalization policy, namely theelimination of non-tariff measures and the progressive reduction of tariff measures.  Generally
speaking, the tariff policy aimed at: the progressive reduction of the tax burden; the harmonization
and simplification of customs tariffs by applying the same level of tariffs to products of the same type,
the reduction in the number of duty rates and the number of taxes applied to imports; the
rationalisation of customs tariffs through the application of the lowest rates to capital goods, inputsand accessories, and to non-locally produced spare parts to encourage investment and improve the
competitiveness of domestic production.WT/TPR/M/116
Page 14
65. Current customs tariffs were thus the result of this policy, whose key measure was the
reduction of duty rates from 13 to 7 with the exception of tariff equivalents applied to agricultural
commodities; the integration of the fiscal import le vy (PFI) into import duties since 1 July 2000; the
application of the minimum import tariff rates to capital goods, equipment and tools; the introduction
of the amendments to the Harmonized System (the 1996 and 2002 amendments) into the tariff; thereduction of the gap between MFN rates and preferential rates, in accordance with the diversification
of trading partners and regional integration.
66. The representative reminded Members that during the Uruguay Round, Morocco had bound
its customs tariffs at 40 per cent for industrial products and 45 per cent for agricultural products
(excluding commodities), and the fiscal import levy (PFI) to 15 per cent, with the exception of the list
of tariff concessions drawn up at the time of its accession to the GATT in 1987.  Thus for industrial
products, the maximum bound rate was 55 per cent whereas the maximum applied rate was 50 percent.  Consequently, the reform simplifying tariff s by automatically merging customs duties and the
fiscal import levy did not give rise to any increase in applied rates.  Similarly, the rates applied to all
the tariff lines of non-agricultural products were between 2.5 and 50 per cent, and consequently below
bound rates.  Accordingly, maximum bound rates had not been exceeded.  The report by the
Secretariat was based on 50 per cent tariffs, including the fiscal import levy, instead of 40 per centwithout the fiscal import levy.
67. Morocco applied regular tariff reductions to agricultural products.  However, it had only been
possible to start the reduction programme towards the end of 1996 following the dereglementation of
the domestic market and the abolition of import licences and the variable levies applied to agricultural
commodities.  During the last two years, and in order to make up for this small delay, Morocco hadopted for a quicker rate of reduction, allowing it to reach bound rates in 2004.  The latest reduction
came into force on 5 June 2003.
68. The 0.25 per cent parafiscal tax on imports was neither a tax of equivalent effect, nor a budget
receipt for the Treasury.  The revenue from this tax was earmarked to cover the expenditure arising
from services rendered by certain institutions aiding SMEs.  The representative finally noted that thetax burden on imports had gone down from 13 per cent in 1998 to 9.5 percent in 2002, thanks to tariff
modifications and the implementation of free trade agreements.
69. Morocco had signed a number of free trade agreements, mainly on the regional and sub-
regional levels, in accordance with its policy of opening up its economy and diversifying partners.
These agreements were consistent with WTO provisions, notably Article XXIV of GATT 1994.
Morocco was aware of the need to reduce the gap between MFN tariffs and preferential tariffs.  A
process of tariff reform had been instigated to lessen the shift from trade from other sources topreferential origin, and to encourage the diversification of trade with other partners.
70. The export licence on hides and skins was introduced in April 2001 to meet the serious
problems in supplies of finished or raw skins on the local market that the processing industries,
industrial tanneries and handicraft sector were encountering.  The problems came about in particular
because of weak supply on the international market, brought about by diseases and epidemics, and bya significant increase in foreign demand for unfinished skins and hides of Moroccan origin.  This
measure was taken in accordance with the provisions of Article XI of GATT 1994, on a non-
discriminatory basis.  It was thought necessary to maintain this measure, given the disruption in this
sector.  However, since September 2002 exports of finished hides and skins were no longer subject to
export licensing, and discussions were under way with economic operators to draw up a timetable inorder to lift this measure.
71. Regarding trade-related investment measures, in 1981 Morocco passed a law regulating the
automobile assembly industry, the aim being to develop the industry of automobile parts andWT/TPR/M/116
Page 15
components.  Thanks to this legal framework, Morocco benefited from a substantial parts industry
employing more than 20,000 people.  Morocco was considering cancelling the specific regulation
which had allowed this activity to be launched and to flourish.
72. Standards were set by technical committees after three-month public enquiries, in accordance
with the provisions of the WTO Agreement on Technical Barriers to Trade.  Standards were generallyoptional.  Approval orders (“arrêtés d’homologation”) may, however, make them mandatory for
reasons to do with health, security, hygiene and environmental protection.  When a standard was
mandatory, it applied without discrimination to imported and locally-produced goods; the procedures
were the same.  In order to harmonize its procedures with those laid down by WTO agreements,
Morocco had revised the relevant laws and regulations.
73. The representative addressed the issue of whether the provisions of Law No. 13-89 on foreign
trade were consistent with the provisions of the Anti-Dumping Agreements, the Agreement onSubsidies and Countervailing Measures and the Agreement on Safeguards, pointing out that this Law
had been drawn up in 1989 and entered into force in 1992, well before the adoption of the agreements
resulting from the Uruguay Round.  At that time,  Morocco had not signed the Tokyo Round codes.
Thus, Article 15 of the Law had simply reiterated the principles laid down in the 1947 GATT
provisions, in particular Articles 6, 15 and 19.  However, when Morocco signed the MarrakeshAgreements, these Agreements had become binding, and their provisions took precedence over
national legislation.  If Morocco were brought to  implement these measures, implementation would be
consistent with WTO agreements.  This was the case for the safeguard measures applied to banana
imports, where Morocco had acted in compliance with the procedure laid down in the Agreement on
Safeguards, from the opening of the investigation to its implementation.  A draft law on trade remedyactions, based on the provisions of the WTO Agreements, was currently being passed.
74. As regards investment incentives, the regime in force aimed at transparency, harmonization,
the integration of certain advantages into ordinary law and the simplification of administrative
procedures in all sectors.  The expected benefits included employment opportunities, the
modernization of infrastructures and production capacity, together with access to new technologiesand the promotion of exports.  However, it was difficult to measure the quantitative impact of the
investment regime sector by sector, as a large number of factors influenced the development of the
various sectors.  Moreover, State aid to freight for air transport of fresh products aimed to reduce
marketing costs, in accordance with Article 9.4 of the Agreement on Agriculture.  This aid only
concerned fresh agricultural products.
75. With regard to government procurement, new regulations had been introduced in 1998,
instigating significant modifications to improve transparency and the fight against corruption; inparticular each administration had obligations: to publish its programme at the beginning of each
calendar year; to organise open invitations to tender for works exceeding 100,000 US dollars; to open
envelopes in public; to publish the decisions of the Bids Commission within 24 hours of their
adoption; and to give bidders the right to approach the contracting authority to ascertain the reason for
their elimination.
76. A vast programme to combat corruption, involving the administration and NGOs, had been
launched.  It was centred on safeguarding ethical standards in public life; modernizing public
administrations by using information technology, simplifying administrative procedures, and
promulgating the law on the obligation to justify administrative decisions; improving the information
system on administrations’ activities and procedures through guides to procedure and orientationservices; encouraging administrations to put information on procedures online; and setting up courts
for administrative and legal actions.WT/TPR/M/116
Page 16
77. The representative pointed out that Morocco had reviewed its legislation on intellectual
property and brought it into line with the TRIPS Agreement.  The TRIPS Council had found it to be
consistent with the Agreement during the review held in Geneva in June 2001.  The Law on the
protection of new varieties of plants and the Law on copyright and related rights had been in force
since 2002 and 2000 respectively.  The implementing Decree of Law No. 17-97 on the protection ofindustrial property should enter into force before the end of the first quarter of 2004.  This Law
extended protection to other fields such as pharmaceutical products, layout-designs of integrated
circuits and service marks, and introduced the urgent applications procedure when an action for
infringement is brought.
78. With regard to the protection of undisclosed information, pharmaceutical and chemical
products for agriculture could benefit from pa tent protection as soon as Law No. 17-97 was
implemented.  Moreover, a technical commission, whose members would be bound by professionalsecrecy, would examine applications for marketing authorizations.  A national committee of experts in
the field of intellectual property was engaged in an  ongoing review of all the issues surrounding the
TRIPS Agreement.
79. Questions on services related to the movement of natural persons, tourism, financial services,
transport and telecommunications.  The movement of natural persons involved Moroccan legislationon employment and immigration, and requirements in professional qualifications and vocational
training.  This was a key issue for Morocco because of its strong potential for exports.  Morocco
reiterated its call to WTO Members to make greater efforts to be more open and flexible when it came
to visas and qualification requirements.
80. A new development strategy for tourism for the current decade, known by the name of
“Vision 2010” had been set up to promote the sustainable development of tourism, with the aim of
totalling 10 million tourists per year.  The sector offered key opportunities for economic growth,
employment and investment, particularly foreign investment.  Moreover, the sector was the country’s
second source of foreign currency.
81. Morocco had undertaken commitments under the General Agreement on Trade in Services
(GATS).  This was considered to be a liberal offer as there were no limits on access to the tourist
market, apart from exercising the profession of tourist guide, for which Moroccan nationality was
required.  However, foreign tour operators were granted the opportunity of sending “tour leaders”
with their groups, whatever their nationalities.  There was no discrimination between Moroccan and
foreign companies for travel agencies; since 1997, foreign operators had been subject to the same
regime as Moroccan operators for access to the market.  For agencies set up outside Morocco, the
obligation to go through a Moroccan or foreign tourist agency operating inside Morocco had beenabolished.
82. In the 1990s Morocco had already implemented a substantial reform programme for financial
services, in order to liberalize and diversify economic players’ sources of financing.  In June 2003, the
Government Council adopted a series of draft laws amending and perfecting current laws.  Two
further draft laws would shortly be put before the Government, modifying the Bank Law and thestatus of the Central Bank.  The representative of Morocco stressed that his country offered very
liberal conditions of access to the financial services market.
83. Even in the field of insurance, where there were restrictions on capital, the latest insurance
code had lifted these restrictions and the sector was open to investors wishing to set up in Morocco.
The only remaining restrictions were mainly linked to foreign exchange regulations, as Morocco had
not yet totally liberalized the capital account, in particular for residents.WT/TPR/M/116
Page 17
84. Morocco intended to pursue the recently begun liberalization and professionalization of
freight transportation by road and the demonopolisation of chartering previously run by the National
Transport Board (ONT).  Law No. 16-99, which legislat ed in this matter, entered into force in March
2003.  At the same time, the reform of road passenger transport was under consideration, the aim
being to introduce rational criteria for access to the profession and to improve the organization andfunctioning of this activity.
85. The telecommunications sector had gone through fundamental changes since the adoption of
new regulations in 1998, aiming to liberalize the sector, followed up in 1999 by the introduction of
competition, with the allocation of several licences for mobile telephones, GMPCS and VSAT
satellite communications and trunked radio networks, and by the partial privatization of the state-
owned operator.  The National Telecommunications Regulation Agency (ANRT), an independent
regulation body, was entrusted with the organizing the liberalization.  It was entrusted, inter alia, withexamining applications for licences, negotiating w ith telecom operators, in particular arbitrating
disputes concerning interconnection and allocating frequency bands.  Thanks to liberalization,
substantial foreign investment had been attracted, roughly 6,000 direct and indirect jobs created, and
telephone density increased from 5 to about 20 per cent.  Telecom operators’ turnover had increased
by more than 80 per cent in 3 years.  Internet had also benefited from this upward trend and recordedpromising results.
86. Further liberalization, with the introduction of competition for the fixed network, had proved
to be necessary to develop infrastructures and guar antee Morocco’s entry into the information society.
To this end, an international tender had been organised for a fixed network licence, but no tenders
were submitted.  A new action plan to open Morocco’s fixed network to competition would beexamined at ANRT’s next Board meeting.
87. Agricultural policy in previous years had been geared to self-sufficiency, aiming at gradually
meeting the population’s needs in commodities thanks to local production.  All imports were
systematically submitted to quantitative restrictions and prohibitive tariffs.  For the last twenty years,
and in particular since joining the multilateral trading system, Morocco had firmly chosen greater
integration into the world economy, notably through the liberalization of its foreign trade for all
products, including commodities.  The contribution of agriculture and sea fishing to food security
were among Morocco’s priorities.
88. Domestic prices of petroleum products were fixed every two weeks in accordance with an
index based on international quotations of refined products.  After having set up the tariffication
system in 1995, the State no longer supported petr oleum products, except for butane gas for domestic
use.  However, consumer prices of petroleum products had remained unchanged since September
2000.  The State had supported consumer prices to lessen the impact of the rise in global prices during
1999 and 2000.
89. At least 51 per cent of equity interest in pharmaceutical companies must be held by
pharmacists, of which at least 26 per cent must be held by pharmacists authorized to work in
Morocco.  The Government had already stated that it would abolish this constraint.
90. The Moroccan delegation undertook to provide the Secretariat of the WTO with written
answers to all the questions within the deadline set.WT/TPR/M/116
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VI. CONCLUDING REMARKS BY THE CHAIRPERSON
91. This third Trade Policy Review of Morocco has led us to a far better understanding of
Morocco's economic policies, with emphasis on its trade policies and practices, and of the challenges
it faces. Our dialogue has been comprehensive thanks to the full and open engagement of Morocco's
high-level delegation, led by Minister Mustapha Mechahouri, the perceptive comments by thediscussant, and the active involvement of many Members. I would like to thank Minister Mechahouri
for the committed approach he has taken to this TPR.
92. Members were appreciative of Morocco's macroeconomic performance and of the structural
reform it has undertaken; this, by further diversifying the economy, has helped it to contain the effects
of recurrent droughts and to promote sustainable growth. The dirham has been somewhat stabilized
and inflation kept low. Members commended Morocco on its active participation in the multilateral
trading system and recalled that the WTO Agreement was concluded in Morocco. They weresupportive of Morocco's initiatives towards regional and bilateral agreements to expand its trade; they
hoped that the regional agreements would conform to WTO principles and would avoid overlapping
and other difficulties. Members stressed the importance of diversification of trading partners by
Morocco, particularly toward southern countries. Some Members sought clarification on Morocco's
position with respect to the ongoing multilateral negotiations and encouraged Morocco to furthermainstream trade into its development strategy.
93. Members urged Morocco to simplify its tariff structure, notably with a view to addressing
escalation. They also noted with concern that some one third of Morocco's applied rates exceed
bindings and that variable duties are still used. Some Members also expressed concern about
Morocco's local-content requirements.
94. Further information was sought regarding procurement (methods, procedures, and preferential
margins), trade facilitation, rules of origin, import monopoly, import and export licensing, tariff
quotas, and internal taxation. Members noted that regular notification of trade policy measures and
related legislation to the WTO would improve the transparency of Morocco's trade regime.
95. Some Members encouraged Morocco to pursue its liberalization reform with a focus on
agriculture, its most protected sector, and to eliminate remaining quantitative restrictions on exports of
skins. Members mentioned that Morocco would improve its business environment in the services
sector by strengthening its commitments under the GATS. This would unquestionably reinforce the
predictability of its trade regime; make its economy  more attractive for foreign investment; facilitate
privatization; and consolidate reforms in areas where Morocco's multilateral commitments are
somewhat lagging behind the liberalization efforts already made. Such an improvement is necessary
in the current international economic context, where a lack of buyers has forced Morocco to delayprivatization, particularly in the areas of telecommunications and air transport.
96. Clarification was also sought on the following issues:
- Incentives, including subsidies and selective exemptions;
- contingency trade remedies;- standards and other technical requirements;- intellectual property rights;
- sustainable capacity-building in agricultu re, for small-scale farmers in particular;WT/TPR/M/116
Page 19
- the rural electrification programme;
- manufacturing (production and processing methods, textiles and clothing,
pharmaceutical products, automobile industry);  and
- services (tourism, insurance, banking, telecommunications, and transport).
97. Members appreciated the interventions by the Moroccan delegation, and look forward to
receiving written replies to the questions.
98. In conclusion, this meeting has given Members a further insight into Morocco's trade policies
and practices, and identified areas where further reforms could enhance transparency and
predictability of its trade regime. We were all very appreciative of the reforms being undertaken byMorocco. In this supportive context, Members urged Morocco to accelerate its trade reforms with a
view to improving efficiency and fully benefiting from its participation in the multilateral trading
system. I would encourage all Members to support Morocco in its efforts to take up its challenges,
guaranteeing market access for its products and assisting it to improve competitiveness.
__________