The European Commission and the European External Action Service conducted a wideranging consultation with the people concerned in Western Sahara.

This consultation revealed a majority view in favour of amending the liberalisation agreement to extend its tariff preferences to products from Western Sahara. A majority of those consulted reported a positive impact on the population as a whole, emphasising in particular the decisive leverage effect of such trade preferences in terms of private investment. They claimed that privileged access to European markets would improve the business environment as well as European direct investment, thereby underpinning the new participatory and sustainable development model in Western Sahara. However, the majority also felt that persistent legal uncertainty affecting trade flows with Western Sahara would greatly undermine socioeconomic development, as already evidenced by the slowdown in trade relations between Western Sahara and certain Member States and in certain industries. According to those consulted, restricting Western Sahara’s access to foreign markets and investment would only hinder the development of domestic economic activities and jeopardise certain socio-economic and political changes just when the development of Western Sahara finally appears to be set for take-off.

The Polisario Front, which was also consulted, and a number of non-governmental organisations, expressed negative views. That said, these criticisms were not motivated by specific negative effects on the people concerned in Western Sahara from the application of the planned tariff preferences, but by a fear that the preferences would maintain the status quo in Western Sahara, which they consider to be under Moroccan occupation.

The assessment revealed that the granting of the tariff preferences set out in the EU-Morocco Association Agreement has a positive impact on the economy of Western Sahara and that this impact should continue and even be enhanced in the future. The fear that extending tariff preferences implies recognition of the status quo is not justified, as nothing in the Agreement implies recognition of Morocco’s sovereignty over Western Sahara.

Human rights

The human rights situation in Western Sahara is broadly similar to that in Morocco. The mechanisms and laws governing protection of human rights are the same. However, there are particular circumstances in Western Sahara associated with the political dispute, mainly relating to freedom of speech, of protest and of association. For example, anything that ‘undermines territorial integrity’, which includes pro-Polisario separatism, is banned and punishable by a fine or even a prison sentence.

Generally speaking, with regard to the expected impact on the human rights situation in the region of extending tariff preferences to products from Western Sahara, an analogy can be drawn with the impact of the EU-Morocco Association Agreement on the human rights situation in Morocco. Insofar as the Agreement encourages regulatory convergence with EU standards in various fields, there is evidence of a positive indirect impact, mainly on working conditions (for example safety measures), employment law (e.g. child protection), plant health measures and consumer protection.

Economic and commercial impact

The conclusions in relation to the various economic sectors are as follows.

There is an agricultural sector in Western Sahara, mainly producing early fruit (tomatoes and melons), for which there is a market in the EU. The production volume is estimated at 64 000 tonnes and accounts for some 14 000 direct jobs. Its import value is around €65 million. If there were no tariff preferences, these exports would incur customs duties of €6.6 million.

These economic benefits could be expanded if Western Sahara develops its production and its exports to the EU further in the future, as part of projects currently under consideration. This would also have an impact on the number of jobs, which some projections indicate could multiply five-fold. With regard to claims that the development of agricultural activities encouraged by the Agreement would have an impact on the use of natural resources, especially water, Moroccan estimates on the use of the water table - although doubted by some - indicate a modest impact on non-renewable groundwater reserves. Measures are also being taken to reduce the use of water from the water table (such as localised irrigation and seawater desalination). Overall, there appear to be few credible alternatives at present to allow the region’s economy to grow, and the disadvantages arising from the use of water resources are offset by the positive impact for Western Sahara.

As regards the fishery products sector, Western Sahara has a large processing industry, comprising 141 facilities authorised to export to the EU. Exports of fishery products from the region in 2015 and 2016 were worth between €100 million and €200 million. Approximately 45 000 jobs were directly or indirectly dependent on these exports to the EU. Extending tariff preferences to these imports would thus have a significant impact on the region’s economy and therefore on jobs. It would also be consistent with the EU’s efforts to lend financial support to sustain and develop the competitiveness of the sector, jobs and the quality of life of fishermen in Western Sahara, as well as the sustainable exploitation of natural resources. Conversely, refusing to grant these preferences would jeopardise jobs as well as exports and increase the likelihood of these processing activities moving to other locations, probably in Morocco. It would also run contrary to the objectives of the EU to support the development of this sector in Western Sahara.

European importers of fishery products from Western Sahara have stated that, given the high Common External Tariff (excluding preferences - non-preferential rates), it would be far less advantageous to buy these products if no preferential treatment were granted.

Finally, in relation to the phosphate industry, given its current status, it is not immediately and directly affected by Western Sahara’s exclusion from the Association Agreement. There are three main reasons for this: 1. Some products (phosphate rock) are subject to a zero rate (most-favoured nation clause); 2. No phosphates are produced for which a market exists in the EU; 3. If certain phosphates produced in Western Sahara were processed in Morocco (or in any other country with which the EU has a preferential agreement), this would be enough to give these products Moroccan preferential origin, so the benefit of the preferences for these products does not depend on the origin of the minerals.

At the same time, it appears that granting preferences to products originating in Western Sahara would have an impact on the future development of the production of certain phosphates. Indeed, the substantial investments that have been announced (of more than $2 billion) in the production of phosphate-derived products in Western Sahara (mainly phosphoric acid and fertiliser) would be jeopardised if exports to the EU of these phosphate products did not receive preferential treatment. If no preferences were given, it would be more attractive to make investments in other areas where production would benefit from preferences (e.g. Morocco) than in Western Sahara. An interruption of investment in Western Sahara would have an impact on production capacity, product diversity and therefore jobs in the region’s phosphate sector.

Generally speaking, the granting of tariff preferences should therefore have a significant impact on the economic development of the region. However, in order to monitor these effects, the Agreement specifically provides for a suitable framework and procedure to allow the parties to assess its consequences during implementation, via regular exchanges of information.

Despite the difficulty in obtaining consistently accurate data, it can be concluded from this study that there are economic and production activities in Western Sahara that would benefit greatly from the same tariff preferences as those granted to the Kingdom of Morocco. In fact, some of these activities - such as the fishery product sector and certain agricultural products - benefited from such preferences until 21 December 2016, leading to economic growth and job creation in Western Sahara. Extending EU tariff preferences to these products would allow these exports to continue.

The necessary diversification of Western Sahara’s economic potential involves incentives for outside investment, which will require greater legal security in particular and therefore clarification of the tariff conditions applicable to current and future exports from Western Sahara to the EU. Extending the benefit of tariff preferences to Western Saharan products will secure the conditions for investment and, given the region’s untapped economic potential and the current low level of direct foreign investment, foster substantial and rapid growth favourable to local jobs.

In contrast, not granting tariff preferences would significantly jeopardise exports from Western Sahara, especially those of fishery and agricultural products, and it is therefore likely that the already limited number of production activities would fall further still, placing an extra handicap on the region’s development. Indeed, if preferences were not extended to Western Saharan products, they would incur customs duties applicable in the Union under the mostfavoured nation system and would therefore not enjoy privileged access to the EU market. This would have only a very limited impact on exports of industrial products (phosphates), but a highly negative effect on exports of fishery and agricultural products to the EU.

More generally, the granting of tariff preferences should have a significant impact on the development of Western Sahara’s economy, by stimulating investment in these sectors. This is the case, for example, for certain phosphates (such as phosphoric acid and fertiliser), where investments are already planned, for agriculture, where development projects are also underway, and for fishing. However, if these preferences were not granted, investment, growth and the diversification of economic activities, as well as jobs, could be adversely affected.