increased from 18.2 to 46.2 percent (Figure 2.21). Between 2000‐2007 and 2008‐15, these shares have changed on average from 56.3 to 41.3 percent, and from 23 to 40.7 percent (Figure 2.22). For exports of medium‐technology products, this has reflected the increase in foreign sales of phosphate derivatives, cars, and electric equipment and apparel. However, between the same two periods, the share of exports of high‐technology products has actually fallen, from 10.2 to 6.1 percent, reflecting a drop in exports of electronic components. At the same time, the share of low‐technology products in total exports (as well as total value added of the manufacturing sector), despite falling significantly, remains high. By and large, therefore, Morocco’s exports remain insufficiently diversified and concentrated mainly on a limited number of low value‐added products. This lack of diversification is well illustrated also by formal indices such as the Index of Export Quality (IEQ) and the Economic Complexity Index (ECI).<sup>1</sup> In particular, Morocco has the lowest ECI among resource poor countries in MENA. In addition, only about 20 percent of the country’s exports are integrated in global value chains (GVC) compared to around 30 percent for Jordan and Lebanon (Hoekman, 2016. This lack of dynamism acts as a major constraint on the Moroccan economy’s ability to reduce unemployment, improve living standards, and achieve high‐income status.

# _Lack of Geographical Diversification_

Despite some notable changes in the geographical structure of Morocco’s external trade, it remains highly concentrated. Figure 2.23 and Figure 2.24 show changes in that structure between 2013 and 2017. France and Spain, and other European Union (EU) countries, remain the main destination on the export side. The predominance of exports to the EU over a longer period of time (2001‐2017) is well illustrated in Figure 2.25. On the import side; this is also the case for France and Spain, but China has taken the third position – ahead of the United States. Indeed, imports from China have increased at a very rapid pace since 2003, while Moroccan exports to that country have lagged behind; as a result, Morocco has developed over time a sizable deficit with China (Figure 2.26). While China is likely to continue to grow at a rapid pace in the coming years, the growth prospects of the EU (and thus the expansion of Morocco’s exports to that region) remain bleak. Moreover, trade with China needs to be rebalanced in some form, in order to reduce what has become a structural deficit for Morocco.

**Figure 2.23 Morocco: Geographical destinations of exports, 2003 and 2017 (in billions of US $)**

|**Rank 2013**||**Rank 2017**|
|---|---|---|
|France (39.8 billion MAD)|1<br>1|Spain (58.8 billion MAD)|
|Spain (35.1 billion MAD)|2<br>2|France (56.8 billion MAD)|
|Brazil (11.5 billion MAD)|3<br>3|Italy (11.4 billion MAD)|
|United States of America (7.2 billion MAD)|4<br>4|United States of America (9.8 billion MAD)|
|Italy (7.0 billion MAD)|5<br>5|Brazil (7.3 billion MAD)|
|India (6.4 billion MAD)|6<br>6|Germany (7.0 billion MAD)|
|Netherlands (5.5 billion MAD)|7<br>7|Turkey (6.9 billion MAD)|
|Germany (5.1 billion MAD)|8<br>8|India (6.4 billion MAD)|
|United Kingdom (7.2 billion MAD)|9<br>9|United Kingdom (5.9 billion MAD)|
|Belgium(4.8 billion MAD)|10<br>10|Netherlands(5.4 billion MAD)|

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