WORLD TRADE  
ORGANIZATION  WT/REG208/M/1 
20 May 2008 
 
 (08-2310) 
Committee on Regional Trade Agreements 
Forty-ninth Session  
 
 
  
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN THE UNITED 
STATES AND MOROCCO, GOODS AND SERVICES  
 
Note on the Meeting of 21-22 April 2008  
 
 
Chairman:  Mr. D. Brauns (Germany) 
 
 
1. The meeting was convened in document  WTO/AIR/3164, dated 12 March 2008. 
2. Under Agenda Item C.II of its 49th Session, the Committee on Regional Trade Agreements 
(CRTA or the Committee) took up consideration of the Free Trade Agreement (FTA) between the 
United States and Morocco (hereinafter referre d to as 'the Agreement'), goods and services. 
3. The Chairman  said that the Agreement had been notified by the Parties to the WTO on 
30 December 2005 under Article XXIV:7(a) of the GATT 1994 and the Understanding on the 
Interpretation of Article XXIV of GATT 1994 as  an Agreement establishing a free-trade area 
(document WT/REG208/N/1) and under GATS Article  V:7(a) as an Agreement providing for the 
liberalization of trade in services within  the meaning of Article V of the GATS 
(document S/C/N/362).  The text of the Agre ement had been circulated to Members as 
document WT/REG208/1, dated 6 March 2006, and was al so available, together with its Annexes, on 
the Parties' official websites. 
4. The factual presentation on the goods and servi ces aspects (document WT/REG208/3, dated 
26 November 2007) had been prepared by the Secr etariat on its own responsibility in full consultation 
with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional 
Trade Agreements (document WT/L/671).  In a ddition, written questions and replies on this 
Agreement had been recently distributed in docum ent WT/REG208/4, dated 2 April 2008.  He said it 
had been drawn to his attention that a minor cha nge would be made to pa ragraph 20 of the factual 
presentation, the last sentence of which should read "T he elimination of tariffs by Morocco finishes in 
2030, except for tariffs on 100 lines which are not eliminated". 
5. He proposed to organize the consideration of the Agreement by asking first the Parties and 
then other Members to give any general comments.  The Committee would then turn to the specifics 
of the Agreement using the factual presentation,  document WT/REG208/3, to guide the debate.  
Given that the goods and services aspects of this Agreement were dealt with in a single factual 
presentation, he proposed to go through the fact ual presentation by section, and then through the 
questions and replies document. 
6. The representative of Morocco  started by congratulating the newly elected Chairman.  She 
wished him every possibl e success and good luck with the respons ibility that had been entrusted to 
him.  She welcomed the consideration by th e Committee on the Agreem ent and reiterated her WT/REG208/M/1 
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  delegation's commitment to the Committee's work in considering free trade agreements to ensure that 
they met WTO standards and contributed to the WT O's goal of closer economic integration between 
Members.  She informed the Committe e that the text of the Agreement was available with its Annexes 
on the official websites of both Parties, and the Moroccan website which had not been mentioned in 
the factual presentation was the following:  http //www.maec.gov.ma.  This could be found both in 
English and Arabic. 
7. She began by highlighting the most important asp ects of the Agreement.  Morocco's approach 
to free trade agreements was in line with its in terest in promoting and supporting the multilateral 
trading system.  Moroccan policy was to enter into free trade agreements which were fully consistent 
with WTO principles and rules, with preferential commitments in line with the WTO's most-favoured-
nation (MFN) principles, and which had a fairly wide  scope to ensure substa ntial liberalization across 
all sectors.  In Morocco's view, the Agreement fu lfilled these criteria since the Agreement set a high 
level of ambition for the achievement of in-depth in tegration of the two economies.  The WTO's strict 
requirement concerning substantial coverage was satisfied to the ex tent that the Agreement covered 
substantially all the trade between the two Parties (i.e. 72.7 per cent duty-free as of entry into force 
and 95.5 per cent duty-free by 2015).  Through th e undertakings made under this Agreement, 
Morocco hoped to send a strong signal of openness to  trade and investment.  The Agreement provided 
substantial advantages for businessmen and investors of  the two Parties as well as for those of other 
regional trading partners.  As a first result of the implementation of the Agreement, it had contributed 
to initiating a process for investment and for strengt hening fairly modest trade relations between the 
Parties in the area of goods and services. 
8. According to figures from the Moroccan Forei gn Exchange Office, the overall trend of 
merchandise trade between Morocco and the Unite d States had been positive between 2003 and 2005, 
increasing from 7,859 million dirhams (MDH) in 2003 to 8,638 MDH in 2005, equivalent to an average annual growth rate of seven per cent despite  the fall of 13 per cent that had been recorded 
between 2004 and 2005.  In 2006, the year in whic h the Agreement had entered into force, trade 
between the two countries had grown at a rate of 30.5 per cent, reaching 11,272 MDH.  In 2007 it had 
grown at a rate of 65 per cent in just one year , reaching 18,577.3 MDH.  For Morocco, imports had 
shown more rapid growth than expor ts.  This was reflected particul arly in the figures for 2006, during 
which imports from the United States had increased by 49.1 per cent compared to 2005, and for 2007, 
during which they had increased by 65.8 per cent.  Exports, on the other hand, had increased by an 
average five per cent per annum for the period 2005-2007, with a fall of -15.7 per cent in 2006.  
Between 2006 and 2007, Moroccan exports to the Unite d States had increased by 25.8 per cent from 
2,253.7 MDH to 2,835.7 MDH.  Investment by th e United States in Morocc o had recorded steady 
growth between 2003 and 2005.  In 2006, the year in  which the Agreement had entered into force, it 
had tripled, reaching 2,379 MDH or eight per cent of  total investment in Morocco.  In 2007 it had 
increased by 24 per cent, reaching 2,943 MDH or 7.3 pe r cent of total foreign investment in Morocco.  
She pointed out that more than 50 per cent of th ese investments had been portfolio investments. 
9. Turning to the scope of the Agreement, her de legation was of the opinion that the disciplines 
and commitments set out in the Agreement were comp rehensive.  They related to trade in goods and 
services, including financial and telecommunication services, investment, government procurement, intellectual property, electronic commerce, the envir onment and labour law.  It was important to note 
that for the agricultural sector, the Agreement provided for a temporal asymmetry in favour of 
Morocco due to the sector's sensitivity.  The aim of the Agreement was to ensure both improved 
market access and greater transparency, as well as  an enhanced business environment that was more 
attractive to investors.  Since its entry into fo rce, duties had been eliminated on 29.2 per cent of 
Moroccan tariff lines (or 67.4 per cent of imports from the United States) and 82.8 per cent of US tariff lines (or 80.3 per cent of Moroccan exports).  By  2015 – the tenth year of implementation of the 
Agreement – 97.1 per cent of Moroccan tariff lines and 97.7 per cent of US tariff lines would be  WT/REG208/M/1 
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  duty-free, which corresponded respectively to 94 pe r cent of total Moroccan imports from the United 
States and 99.9 per cent of US imports from Morocco. 
10. With regard to services, the Agreement pr ovided for an open and non-discriminatory 
environment for service providers of the Parties.  Liberal access for trade in services was bound across 
a wide range of sectors.  The "negative list" appr oach had been adopted in respect of services and 
investment, whereby all sectors were subject to co mmitments except those that had been included in 
the Annexes.  This had enabled the Parties to  undertake substantial commitments beyond their GATS 
commitments.  This approach had been adopted w ith an eye to controlled liberalization, so that 
benefits could accrue from opening up trade in services without giving up the power to regulate sensitive sectors.  The measures and sectors that woul d not be subject to liberalization had been listed 
in the Annexes for that purpose, either in acco rdance with existing legislation and regulations 
(Annex I) or in line with fu ture sensitivities for non-regulat ed sectors (Annex II).  In 
telecommunication services, the Agreement provided new entrants to the Mo roccan market with the 
opportunity to benefit from a healthy and benign  competitive climate.  In electronic commerce, 
Morocco had agreed to customs duty exemptions on  the imports of digital products from the United 
States.  These developments were in keepi ng with Morocco's accession to the Information 
Technology Agreement (ITA) and the tariff eliminati on which had been planned.  With regard to 
financial services, the Agreement accelerated the re form process which had been undertaken since the 
1990s in the Moroccan financial sector.  Its liberaliz ation and opening up to the international market 
would encourage competition and innovation in this  sector and therefore lead to lower prices for 
financial products and a wider c hoice for consumers in general and for investors in particular. 
11. In the investment field, the Agreement est ablished a legal framework under which modern 
legal instruments provided for the opening up of i nvestment to foreign capital, with guarantees and 
security for investors.  The principles of national and MFN treatment and the free transfer of income 
were retained.  Moreover, the introduction of th e compensation guarantee with no discrimination in 
the event of expropriation, and the possibility of r ecourse to arbitration in the event of any dispute 
were additional instruments likely to attract foreign investors. 
12. Morocco's intellectual property commitments had co nsolidated its adherence to the principles 
enshrined in the TRIPS Agreement and had provi ded a further opportunity to harmonize relevant 
national legislation and had accelerated its accession to a number of international intellectual property 
treaties.  Implementation had led to improvements in  the national legal system for the protection of 
intellectual property rights.  The objective was to increase business confidence and provide a more 
attractive environment for foreign investors. 
13. With regard to government procurement, the Agreement introduced a number of measures 
relating to transparency, ethics, modernization and competition to improve the system for awarding public contracts.  It also facilitated access to th e US government procurement market by according 
preferential treatment and enhancing the security of the business environment for Moroccan 
enterprises, while setting optimum procurement thres holds for the protection of national enterprises, 
in particular SMEs. 
14. With regard to transparency, the Agreement es tablished a mutual information exchange and 
notification system enabling interested parties to be informed of regulatory and legislative measures 
adopted or proposed which were likely to affect tr ade between the Parties.  With regard to the 
administration of the Agreement, a Joint Co mmittee had been established to supervise the 
implementation of the Agreement and to review trade relations between the Parties.  The first meeting 
of the Joint Committee had been held in Rabat in  March 2008.  The Parties had recognized that the 
Agreement had contributed to a considerable increase  in the flow of US investment to Morocco, thus 
confirming the attraction of the new modern trading framework.  The Parties also had noted that it had 
been too early to undertake a meaningful assessment  of the impact of this Agreement on bilateral WT/REG208/M/1 
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  trade.  However, the positive trend recorded in 2 007 predicted tangible results in the years ahead.  
Finally, she thanked Morocco's partner, the United States, as well as the WTO Secretariat, for their 
cooperation in having prepared the factual presenta tion and having set up this meeting.  Morocco 
would do its best to reply to any additional questions arising from the ensuing discussion. 
15. The representative of the United States
 extended her warm welcome to the newly elected 
Chairman and looked forward to working with him.  She said her delegation welcomed the 
consideration of the Agreement by the Committe e and thanked the Moroccan delegation for its 
thorough summary of the Agreement's disciplines a nd commitments.  It was her delegation's opinion 
that the Agreement was fully consistent with WTO obligations and built upon the Parties' WTO 
commitments.  As laid out in detail in the factua l presentation, the Agreement was comprehensive and 
reflected the Parties' commitments to free trade,  openness, and transparency, and to fostering a 
favourable climate for trade and investment. 
16. For the United States, the Agreement had already generated economic opportunities for 
business, farmers, service providers, workers and c onsumers, further reaffirming its commitment to 
open markets and economic liberalization.  Although the Agreement had only been in force for two 
years, US-Morocco trade had already grown substa ntially.  From 2005 (before the Agreement) to 
2007 (after the Agreement), bilateral trade in goods between Morocco and the United States had 
doubled.  In addition, foreign direct investment in Morocco had increased 74% from 2005 to 2006.  It 
was the US view that the growth in foreign invest ment which continued currently in Morocco was due 
– at least in part – to its commitment to open its market, as well as the transparent, predictable 
business climate resulting from enhanced intellect ual property rights protection, improved business 
services, and the pro-liberalization position wh ich had been signalled by the Agreement. 
17. She said that the Agreement was Morocco's first free trade agreement covering services, 
which represented more than half of Morocco's Gr oss Domestic Product (GDP) and an even larger 
proportion of the United States'.  Given the impor tance of services to each country's economy and 
growth, the Agreement accorded substantial mark et access across nearly the entire services regime, 
including new service industries which might emerge in the future.  Some key sectors covered by the 
Agreement included express delivery, financial ser vices, telecommunications, computer and related 
services, distribution, and construction and engineering.  The Agreement provided benefits for businesses to supply cross-border services (for instance, by  electronic means), as well as to establish a 
local presence in the other country.  The strong and detailed disciplines on regulatory transparency 
further supplemented the Agreement's cross-cutting tr ansparency provisions.  She highlighted that the 
Agreement provided for non-discriminatory treatment of goods and services of each Party in the 
other's government procurement market.  The Par ties had also both committed to high standards for 
the protection of intellectual property.  These standards recognized the importance of strong and effective intellectual property protection to the economies of the Parties. 
18. Given that there were no general comments a nd no questions on sections from the factual 
presentation, the Chairman
 then opened the floor to Members for any comments and questions on the 
responses provided by the Parties in document WT/REG208/4. 
19. The representative of Brazil  followed up on two related questions posed by Australia and 
Chinese Taipei - questions 1 and 17, respectively.   While Brazil appreciated the responses provided 
by the Parties, his delegation was still not convinced  that the Parties had provided an explanation for 
the 24 year phase-out period, other than stating th at this period had been "deemed necessary and 
appropriate".  He asked for further details, if possible. 
20. The representative of Australia  thanked the Parties for their replies to its questions and looked 
forward to the response on the follo w up question raised by Brazil.  WT/REG208/M/1 
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  21. The representative of Japan  thanked the Parties for the comprehensive overview of the 
Agreement, and raised a question regarding questi on 30.  It was her delegation's view that the 
question posed by Japan had not been fully answered .  Its question was based on a supposed situation 
where the MFN duty became lower than the duties provided for under a FTA, and exporters not fully 
aware of the situation utilised the rules of origin certificate based on the FTA instead of the MFN rate.  
Assuming this happened under the US-Morocco Ag reement, she wondered whether there was any 
scheme whereby the customs authority of a Party would notice the error of the exporter and apply 
MFN duties instead of the preferential duties which the exporter had declared, or whether the customs 
authorities would apply duties based on whatever the exporter declared. 
22. The representative of Chinese Taipei  congratulated the newly elected Chairman and thanked 
the Parties for having responded to its questions.  He did not have any specific follow-up questions, 
but was interested in hearing the answ er to the question raised by Brazil. 
23. In response to the question about whether the Pa rties could explain the reason for the 24 year 
phase-out period, the representative of Morocco  said the period was justified since it would make 
Morocco really implement the national programme for the enhancement of its agricultural sector.  
This transition period concerned quota-free duties (paragraph 8 of the Annex of Morocco on this 
phase-out) and concerned only the tariff lines 0207. 13.0029 and 0207.14.9291, which were chicken 
products, and chicken legs or wings, either fresh or  frozen.  The reason for a longer transition period 
was that as far as Morocco was concerned, the Agreement envisaged a temporary asymmetrical 
approach in favour of Morocco in order to take in to account the sensitivity and the social weight of 
the agricultural sector, especially for a limited number  of agricultural products.  However, in spite of 
the length of this period, it was her delegation's opinion that the commitment  for liberalization was 
true and effective.  As from 2015, which would be the ninth year of the implementation of the 
Agreement, only 2.4% of Morocco's tariff lines co rresponding to 0.3% of Moroccan imports coming 
from the United States would remain to be phased out. 
24. In response to the question raised by the re presentative of Japan requesting information on 
what would happen if a WTO agreement resulted in more favourable tariff treatment than FTA rates, 
the representative of the United States  reiterated the Parties' original answer referring to Article 1.2 of 
the Agreement.  With respect to the practical cust oms implications, she requested that Japan submit its 
question in writing, perhaps with greater specificity as  to the particular situation and circumstances, so 
that the Parties' customs and legal authorities c ould reply in writing.  The representative of Japan  
agreed to do so. 
25. The Chairman  noted that the consideration of the go ods and services aspects of the Free Trade 
Agreement between the United States and Morocco had allowed the Committee to clarify a number of questions and oral discussion of the Agreement coul d be concluded in accordance with paragraph 11 
of the Transparency Mechanism.  If any delegations  wished to ask follow-up  questions they were 
invited to forward submissions in writing to the Se cretariat by 28 April and Parties were asked to 
submit replies in writing by no later than 12 May 2008.  In accordance with paragraph 13 of the 
Transparency Mechanism all written submissions , as well as minutes of this meeting would be 
circulated promptly, in all WTO official langua ges, and would be made available on the WTO 
website. 
26. The Committee took note
 of the comments made. 
__________