As in many other developing countries, agriculture is highly important to the economy and people of Morocco. It contributes about 20 percent to GDP and 30 percent to export earnings and absorbs approximately 40 percent of the total active population and 80 percent of the rural workforce. Frequent drought has been the major problem facing agriculture over the last two decades. About 90 percent of the cultivated area is rainfed, and rainfall has fluctuated sharply over the years. Morocco's agricultural exports are primarily horticultural products, including fruit (particularly citrus fruit), fresh and canned vegetables (tomatoes, courgettes and beans) and cut flowers. The country is recognised in the WTO as a net food-importer - it imports substantial quantities of staples, particularly wheat, oils, sugar and milk. The European Union (EU) continues to be Morocco's main trading partner.
In common with many other developing countries, accession of Morocco to WTO had taken place at a time when trade liberalization was being undertaken both unilaterally and in the context of regional co-operation schemes. In the 1960s and 1970s, government intervention in various sectors of the economy was pervasive. Economic policy was characterized by import substitution, where agriculture was controlled through a multitude of price and other administrative measures. Since the 1980s, however, more market-oriented policy reforms have been implemented, notably trade and financial liberalization, privatisation and other measures of domestic deregulation. Reform measures have been supported by disciplined macroeconomic policies in the framework of structural adjustment programmes (SAPs). 2 The Government has been pursuing a liberal trade regime for the last two decades, and the development of the agricultural sector has been closely linked to overall national development policy. Accession to GATT in 1987 and results of the UR were responsible for additional reforms of agricultural policy and reaffirmed the commitment to the continuation of trade liberalization initiated in the early 1980s.
In the UR, Morocco bound all tariffs on agricultural products. Tariff equivalents were established for all agricultural products subject to border measures other than ordinary custom duties, i.e. for cereals, sugar, edible oil, milk, meats and their derivatives. The tariffication exercise was carried out using the actual difference between domestic and external prices for the base period 1986-88. The computed base tariff equivalents varied from 107.5 percent for cheese to 380 percent for mutton (Table 1). For the remaining agricultural products, tariffication was not adopted but ceiling tariffs were offered, typically at lower rates - in most cases at 45 percent, which used to be the maximum rate at that time under the SAP, plus a 15 percent fiscal import charge (the "other duties or charges").
For the tariffied products, the bound rates are to be cut by a total of 24 percent by the end of the implementation period. For non-tariffied products, the 45 percent rate will be reduced to 34 percent, while the 15 percent fiscal import charge will remain unchanged.
While the levels of tariff equivalent for food products were considered to provide adequate protection to domestic producers, it was feared that their application, which would allow full transmission of world price variations to domestic markets, might destabilize domestic food prices. Consequently, the Government decided to put in place an import system for cereals which, while respecting the tariff commitments (applied rates remaining below the bound rates), modulated import price fluctuations in order to avoid the possible undesirable effects for both producers and consumers (see Box 1 for a description of the system).3
Table 1: Tariff commitments for products tariffied in the UR
|
Product |
Base tariff (%) (1995) |
Final bound tariff (%) (2004) | ||
Cereals & flour |
Soft wheat |
190.0 |
144.0 | |
Durum wheat |
224.0 |
170.0 | ||
Soft wheat flour |
182.5 |
139.0 | ||
Sugar |
Raw and refined sugar |
211.0 |
168.0 | |
Oilseeds and products |
Oilseeds |
146.5/192.5 |
111.0/192.5 | |
Raw vegetable oil |
283.5 |
215.0 | ||
Refined vegetable oil |
311.0 |
236.0 | ||
Meats |
Bovine meat |
315.0 |
239.0 | |
Sheep meat |
380.0 |
289.0 | ||
Poultry |
132.5 |
101.0 | ||
Milk and derivates |
Liquid milk |
115.0 |
87.0 | |
Powder milk |
115.0 |
87.0 | ||
Cheese |
107.5 |
82.0 | ||
|
Source: Morocco's WTO Schedule. | ||||
The new cereal import system thus sustained the price stabilization scheme that had been in force when state trading was an important tool of intervention. However, with trade liberalization and deregulation, state trading practices had changed substantially. The Government no longer intervenes directly in the marketing and trade of agricultural products. Private traders are free to import or export without restrictions. During the first three years of the implementation phase of the UR, world cereal prices were high, and therefore actual import duties have been much lower than the corresponding bound tariffs.
As part of its market access commitments, Morocco also undertook to introduce tariff rate quotas on certain agricultural products for which imports were less than 5 percent of domestic consumption. The TRQs were established for meat, oilseed meals and fresh milk, but were not filled for some years due mainly to lack of market demand. The administration of TRQs is automatic as it is based on the first-come first-served method.
Morocco reserved the right to use the special safeguard provision (SSG) of the AoA. However, it has not so far found it necessary to resort to this additional measure of protection.
Box 1: New import tariff system for cereals The new system of import duties based on threshold prices of cereals was put in place in 1996. It subjects individual grains to one or another of two levels of duty, depending on the import value compared with the threshold price. When the import price is lower than the threshold price, a high import duty is applied, in addition to a 15 percent fiscal import charge. When the import price exceeds the threshold price, a duty of only 1 percent is applied, plus the 15 percent fiscal import charge. The threshold prices are revised from time to time. The following example illustrates the working of the system for soft wheat, where the threshold price is set at 1 300 dirhams/tonne. A two-stage tariff is applied depending on the effective import price of wheat: - When the import price is lower than the threshold price: Applied tariff = 35% (duty) + 15% (charge) = 50% - When the import price is higher than the threshold price. Applied tariff = 1% (duty) + 15% (charge) = a total of 16% on the excess over the threshold price, plus the 50% applied to the threshold price Thus: - If CIF price = 1 100 DH/t, then applied rate is 1 100*0.50 = 550 Dh/t. - If CIF price = 1 700 DH/t, then applied rate is 1 300*0.50 + (1 700-1 300)*0.16 = 714 Dh/t. |
The main objective of support for agriculture has been to maintain a certain level of domestic production of basic foodstuffs and to enlarge the potential for exporting other agricultural products in order to finance food import needs of the growing population. This strategy is seen as vital to national food security largely because more than 40 percent of the population relies on agriculture as the only source of both income and food supply. Morocco has been a net food importer for a long time, principally of cereals (mainly wheat), sugar and vegetable oils.
As part of its SAP, the Government has progressively reduced its support to and involvement in agriculture since the early 1980s. All input subsidies were eliminated and output prices liberalized. The limited remaining support is mainly directed to public services with the objective to sustain agricultural development. The range and the level of Morocco's support commitments under the AoA should be seen in the context of the policy environment prevailing in the early 1990s, in the midst of the implementation of the SAPs. Previously committed reforms under SAPs have prevented Morocco from gaining sufficient flexibility in some of its domestic support commitments. Its WTO commitments reflect this situation.
Table 2 shows domestic support in the UR base period (1986-88) and outlays in 1995-1997. The following points emerge from this and other information:
Table 2: Total domestic support (million dirhams)
|
Support measures |
Base period (1986-88) |
|||
1995 |
1996 |
1997 | ||
Measures exempt from reduction: |
||||
Green box |
1 576 |
1 340 |
3 296 |
3027 |
SDT development programmes |
926 |
1 261 |
1 266 |
1 474 |
Sub-total |
2 502 |
2 601 |
4 562 |
4 501 |
Total AMS (as % of AMS ceiling) |
790 |
94 (12) |
250 (33) |
91 (12) |
Total support |
3 292 |
2 694 |
4 812 |
4 592 |
|
Sources: Morocco's WTO Schedule and notifications to WTO. | ||||
First, Morocco has not faced any undue difficulties in complying with the WTO commitments. The country bound its Total AMS and was committed to reducing it by 13 percent over the period 1995-2004. In 1995, 1996 and 1997, the AMS was well below committed levels (bound total AMS), ranging from 12 percent to 35 percent. The Total AMS consisted mainly of market price support forgone for supporting production and stockholding of cereals, mainly wheat;
Second, it is interesting to note that while Total AMS was reduced, total domestic support to agriculture has been on the increase, due to higher outlays in the green box and SDT categories. Such outlays, which are excluded from reduction commitments, apparently provide sufficient flexibility for supporting different agricultural programmes;
Third, domestic food aid represented the major component of the green box measures, accounting for 60-80 percent of the total support of this type during 1995-1997. Since most consumer subsidies were largely eliminated by the time the WTO Agreement came into force, the remaining subsidies on wheat flour were included in the domestic food aid category. In addition, a stockholding policy for food security purpose has been established for wheat, following agricultural trade liberalization;
Fourth, investment subsidies for hydro-agricultural development represented, on average, more than 70 percent of the SDT support. This may reflect the importance the Government attaches to the development of irrigation systems in order to reduce the heavy dependence on highly unstable rainfed agriculture. On average, drought occurs every three years.
Morocco has not faced much questioning in the WTO CoA meetings on its domestic support commitments. The few queries that were raised mainly concerned the justification for including the support measures in the green box and SDT categories. Although Morocco may well have lost some support flexibility because its WTO commitments largely reflected a low level of current support as a result of the SAPs, the data in Table 2 show that Morocco has a considerable flexibility in providing AMS support, which are the only policies that are constrained under current AoA rules. Moreover, it has taken full advantage of the fact that there is no limit to green box and SDT expenditures. It is difficult to foresee the future, but as long as current rules and exemptions, including those allowing support for investment in irrigation, are maintained and Morocco's support portfolio continues along the current lines, no particular problems are foreseen.
In the UR, Morocco did not notify having agricultural export subsidies for the base period and so has no experience regarding reduction commitment in this area. However, the Government does provide aid to reduce transportation and freight costs for exports, as permitted for developing countries under the AoA.
Morocco also provides several other forms of assistance to exports. The temporary admission scheme constitutes the main incentive for different exports. In addition to these advantages, public institutions take promotional measures that fall in their sphere of competence.
In sum, Morocco has faced little difficulty in implementing its UR commitments.4 The imperative of economic reforms, including the previous SAPs, is far more important to the agricultural sector than the AoA.
Morocco has been a net importer of food for more than two decades. In an environment of SAPs and trade liberalization, food production continues to fluctuate, and at the same time the volume of food aid continues to decline.
As in most other developing countries, the decline was particularly sharp during 1995-97, by as much as 97 percent from the 1991-94 levels (Table 3). Consequently, while cereal food aid represented about 9 percent of wheat imports during 1991-94, the proportion was only 2 percent in the subsequent period.
Table 3: Food aid delivery to Morocco, 1991-94 and 1995-97 (average annual quantity, in thousand tonnes, and percentage change)
Type of food aid |
1991-94 Quantity |
1995-97 Quantity |
Change (%) |
Cereals (wheat equivalent) |
152.8 |
4.7 |
- 96.9 |
Non-cereals |
40.0 |
1.2 |
- 97.0 |
Total |
192.8 |
5.9 |
- 96.9 |
Source: Consultant's calculations. | |||
As a contingency measure, a prior import declaration (PID) system was initiated to limit possible injury to some domestic sectors. For example, following a request by the banana industry, a PID was required in 1995 to avoid dumping in the domestic market. This PID practice is provisional, and future anti-dumping and countervailing actions will be in conformity with the WTO rules.
Morocco also applies a number of other safeguard measures to protect and stabilize its domestic markets. The Trade Law provides for action against dumping and subsidies, but no such action has been taken during the past four years. For basic products, the new import tariff system has been an important factor in border protection.
The 1990s were marked by three major events that changed the nature of the agricultural sector. The first event was the implementation of the SAPs and the second was the revision of the co-operation agreement with the EU following the accession of Spain and Portugal to the EU. These two countries compete strongly with Morocco in the EU markets for fruit and vegetables. The third event was the UR itself, constituting the first round of multilateral negotiations to include agriculture.
Thus, for Morocco, agricultural trade liberalization has been taking place at three distinct but interacting levels, each of which is expected to have a significant impact on the agricultural sector: unilateral, regional and multilateral. However, it is difficult to fully assess their overall quantitative impact on agricultural trade and even more difficult to disentangle the effects of the AoA from the overall effect of trade liberalization. For these reasons, it would be useful to first describe (as is done in the first sub-section below) the policy environment facing Moroccan exports in their main export market, i.e. the EU market for fruit and vegetables. The subsequent sub-section reviews experience with total food and agricultural trade during 1995-98.
Contrary to imports, agricultural export performance depends largely on the policies of other countries, and for Morocco mainly on the policies by the EU. Agriculture has always played a special role in trade relations between Morocco and the EU. As a result of the close economic ties, historical links and geographical proximity, the EU market accounts for some 80 percent of Morocco's total agricultural exports. It is particularly important for fresh products such as potatoes (99.8 percent), tomatoes (92 percent) and oranges (83 percent). The accession of three new members (Austria, Finland, Sweden) to the EU in 1995 further enlarged the export potential for Morocco.
During the implementation period of the UR, Morocco's access to the EU fruit and vegetables market will be governed by the latter's entry price system as well as by its bilateral co-operation agreement with Morocco.
While the Common Agricultural Policy (CAP) of the EU has undergone a number of reforms since 1992, it appears that its post-UR trade policy has profound implications for the exports of third countries. Prominent are measures on fruit and vegetables, for which a new import regime, based on an entry price system, was adopted. It was generally felt that the new system was intended to perpetuate the level of protection maintained by the previous reference price system. The new system is applicable to 12 groups of agricultural products, including tomatoes, citrus, cucumbers, courgettes, grapes, apricots, and peaches. Three tariff levels were established for each group. The "normal" (ad valorem) tariff is charged on imports at or above the entry price level. For imports below that level, but not more than 8 percent below, an additional duty is charged which equals the difference between the entry price and the import price. If, however, the import price is more than 8 percent below the entry price, the full maximum tariff equivalent (MTE) 5 plus the ad valorem tariff is charged.
For a number of reasons, the new entry price system is more restrictive on the whole for Moroccan exports than the earlier reference price system. First, during the season when Morocco exports its fruit and vegetables, the system is more protective. Second, while the entry price system is basically applied to the same products, and for the same seasons, as the previous reference price system, for tomatoes it applies for a far longer period (an additional almost 2 ½ months) than previously. A similar situation exists for clementines, for which the month of November has been added. Entry prices in the post-November period are lower than the previous reference price for clementines, making access by foreign suppliers more difficult (Table 4).
Third, and as Table 5 shows, the MTEs established under the entry price system for the main exports are almost the same as the countervailing charges of the previous reference system, indicating that there has been no change in the level of protection. In the year 2000, these charges will be reduced to below their respective previous countervailing charges. However, they will still be prohibitive. Consequently, third-party exporters will be unable to compete in the European market, mainly because of the privileged position of Spain.
Table 4: EU reference and entry prices
|
Product/season |
Reference price (ECU per tonne) |
Base entry price (ECU per tonne) |
Change % | |
Tomatoes: |
||||
1 October to 20 December |
588 |
700 |
+19.1 | |
21 to 31 December |
750 |
|||
1 January to 31 March |
920 |
|||
Oranges: |
||||
1 December to 31 May |
227 |
372 |
+ 63.9 | |
Clementines: |
||||
1 November to 30 November |
675 |
|||
1 December to end February |
735 |
675 |
- 8.2 | |
|
Sources: Sous-Commission Mixte Agriculture (1994); Schedule LXXX-European Communities. | ||||
Table 5: EU Maximum Tariff Equivalents (MTE) and countervailing charges on selected fruits and vegetables
|
Product |
MTE (1995) (ECU per tonne) |
MTE (2000) (ECU per tonne) |
Countervailing charge (ECU per tonne) |
Tomatoes |
372 |
298 |
352/975 |
Cucumbers |
473 |
378 |
411/834 |
Oranges |
89 |
71 |
76/100 |
Clementines |
132 |
106 |
106/376 |
|
Sources: Schedule LXXX-European Communities; H. Grethe and S. Tangermann. "The EU import regime for fresh fruits and vegetables after implementation of the Uruguay Round". Proceedings of the FAO Expert Consultation on the Preparation for the Next Trade Negotiations on Agriculture, FAO Sub-regional Office, Tunis, 1999. | |||
While recognizing the primary importance of the benefits from multilateralism, Morocco has a bilateral relationship with the EU, which has been of considerable value.6 One of the understandings in the various bilateral agreements concluded was that in the event of reform or change in trade policy, the EU will take necessary measures to maintain its imports from Morocco. It is in this context that negotiations between the two sides were initiated and the EU/Morocco Euro-Mediterranean Agreement signed in 1996 and ratified by both parties early in 2000. The Agreement establishes a free-trade area over a transitional period of 12 years. Duties and other trade restrictions will be eliminated at the end of the period on "substantially all trade". While there is a specific timetable for the elimination of tariffs and quantitative restrictions on industrial goods, agricultural trade liberalization was defined less clearly.
Moreover, agricultural products were excluded from the free trade regime and were negotiated separately. Initiated in 1994 and continued until 1996, they proved difficult and complex. Ultimately, it was agreed to maintain Morocco's traditional trade flows, taking into account the accession of the new EU members. This outcome would be ensured by inter alia two measures: (i) determination of quantities to be imported annually from Morocco duty-free (Table 6); and (ii) negotiated reduced entry prices for the main Moroccan exports. In the latter case, the quantities are duty-free when they enter the EU market above the relevant negotiated entry price. Otherwise, an additional duty and MTE will be applied, as described above. The negotiated entry prices will be reduced by the same proportion as the entry price bound in the EU Schedule.
Imports under tariff rate quotas were set to enter the EU market duty-free when import prices are higher than the negotiated entry prices. Additional duty-free quotas were accorded to oranges (40 000 tonnes) and clementines (40 000 tonnes) without any reduction of the entry price. All quotas were to be increased by 3 percent annually from 1997 to 2000.
Table 6: EU base entry prices and negotiated entry prices for selected agricultural products from Morocco
Product |
Tariff rate quota (tonnes) |
Base entry price (1995) (ECU per tonne) (a) |
Negotiated entry price (ECU per tonne) (b) |
Tariff concession (a-b)/a (%) |
Tomatoes |
150 676 |
700-900 |
500 |
28.6/45.7 |
Cucumbers |
5 000 |
576-1200 |
500 |
13.2/58.3 |
Oranges |
300 000 |
372 |
275 |
26.1 |
Clementines |
110 000 |
675 |
500 |
25.9 |
|
Source: Consultant's calculations based on the EU/Morocco Euro-Mediterranean Agreement of 1996. | ||||
While these concessions granted to Morocco look high, ranging from 28.6 percent to 45.7 percent for tomatoes, it is worth noting that there were no entry prices for tomatoes during most of the period with preferences, and likewise for cucumbers for the period November 11 to February 10. For oranges, the entry price was negotiated to be at the level of the former reference price. Other products are subject to quotas with or without a calendar, and enter the EU market duty-free. The major export product exempt from entry price restrictions is potatoes with a duty-free quota of 120 000 tonnes during the period December 1 - April 30.
As regards the future, the EU/Morocco Euro-Mediterranean Agreement will markedly modify the character of the previous agreements. For the first time it requires reciprocity from Morocco, which has granted trade concessions on agricultural exports of interest to the EU (e.g. wheat).
Agriculture accounts for some 30 percent of total merchandise exports and about 20 percent of total merchandise imports. The exports consist mainly of fruit and vegetables, notably citrus, tomatoes, potatoes, cucumbers, apricots, peaches, fruit juice, canned vegetables and olive oil. (Citrus alone accounts for over 35 percent of the total). There has been little geographical diversification; industrial countries are the most important markets, with the EU accounting for 80 percent of the total.
Imports are highly concentrated on basic food items. More than half of total imports consists of wheat and vegetable oil, which account for much of the increase in total food imports. While imports originate from diverse sources, the most important are the EU and the United States.
Against expectations, the implementation of the AoA and the continuation of domestic trade reforms have not seen an improvement in agricultural trade performance. The trade deficit was wider in 1995-98 than in 1990-94.
As may be seen from Figure 1 and Table 7, agricultural exports (excluding fishery and forestry products) in value terms rose significantly during 1995-98, when they averaged 38 percent more than in 1990-94 and 24 percent more over the extrapolated trend value for 1995-98.7 Performance of individual products, however, varied widely. While exports of citrus increased in line with production, exports of tomatoes and potatoes showed a slight decline. In general, for fruit and vegetables exported to the EU under the latter's entry price system there was no significant improvement. Total agricultural imports grew much faster than exports. The increase in 1995-98 was 55 percent in 1990-94, and in relation to the extrapolated trend value for that period it was 28 percent.
The agricultural trade balance has consequently been in constant deficit during 1990-98. In 1995-98, net imports averaged an annual US$780 million, which was about 78 percent higher than in 1990-94 and 32 percent higher than the level expected on the basis of the extrapolated trend.
Figure 1: Agricultural trade, 1985-98 (in million US$; thick lines are actual values, thin lines are trends for 1985-94 extrapolated to 1998)
Source: FAOSTAT
For food alone, imports over the period under review rose even faster than for total agricultural imports (Tables 7 and 8 and Figure 2). While net imports of all agricultural products rose by 78 percent over the 1990-94 average, net food imports increased by 160 percent. Following a bad production year, Morocco's food import bill increased sharply in 1995 and 1996, but decreased by 12 percent in 1997 largely because of a good cereal harvest.
The above trends and features point to a generally widening food gap. In future multilateral negotiations the Moroccan authorities will accordingly be greatly concerned over the implications for the country's agricultural and food sectors.
Figure 3 shows how food imports have varied annually in relation to total agricultural exports. In 1985-87, the ratio was about 1.2, i.e. food imports were 1.2 times agricultural exports. Thereafter, the ratio fell to about 0.8 in 1990-91, rose to 1.34 in 1992 and 1.7 in 1995 before falling slightly in 1996 and 1997. The average value for 1995-98 was 1.42, about 20 per cent higher than in 1990-94, but 47 percent below when compared with the trend. In other words, there was a clear deterioration in the balance between food imports and total agricultural exports during 1995-98 compared with the previous five years.
Table 7: Agricultural trade in 1990-94 and 1995-98 (annual average value, in million US$, and percentage change)
Period |
Imports |
Exports |
Net imports | ||
|
1990-94 actual (a) 1995-98 actual (b) 1995-98 extrapolated (c) 1
(b) - (a) 2 (b) - (c) 2 |
1 039 1 606 1 258 567 (55%) 348 (28%) |
601 826 665 225 (38%) 161 (24%) |
438 780 593 342 (78%) 187 (32%) | ||
1 Extrapolated value based on 1985-94 trend. 2 Numbers in parentheses are percentage changes over (a) and (c) respectively. Source: Computed from FAOSTAT data. Agriculture excludes fishery and forestry products. | |||||
Table 8: Food trade in 1990-94 and 1995-98
(average annual value, in million US$, and percentage change)
Period |
Imports |
Exports |
Net imports | |
|
1990-94 actual (a) 1995-98 actual (b) 1995-98 extrapolated (c)1
(b) - (a) 2 (b) - (c) 2 |
699 1 174 847 475 (68%) 327 (39%) |
523 718 567 195 (37%) 151 (27%) |
176 456 280 280 (160%) 176 (62%) | |
|
1 See note 1 to Table 7. 2 Numbers in parentheses are percentage changes over (a) and (c) respectively. Source: Computed from FAOSTAT data. Food excludes fishery products. | ||||
Figure 2: Food trade, 1985-98 (in million US$; thick lines are actual values, thin lines are trends for 1985-94 extrapolated to 1998)
Source: FAOSTAT
Figure 3: Ratio of the value of total food imports to that of total agricultural exports, 1985-98
Source: FAOSTAT
Morocco considers that the new negotiations on agriculture provide an opportunity to correct certain shortcomings that remain evident in world agricultural trade and which stem from practices that are in breach of the fundamental principles of the WTO, in particular the increasing use of certain forms of export subsidy and domestic support and more frequent recourse to unjustified measures that restrict market access. This section summarizes the issues that are likely to be of great concern to Morocco in this respect.
As shown in Section II above, Morocco has not faced any major problems in adapting its agricultural policies to WTO commitments. Based on its commitments and given the current AoA rules and exemptions on domestic support, it has considerable flexibility in providing support to agricultural production. Generally, if the exemptions currently given to all countries under the green box and the SDT provisions are maintained unchanged, Morocco is unlikely to be constrained in its domestic support to agriculture, including support to irrigation. If there should be any major difficulty in the future it is likely to arise in connection with its AMS and the highly variable rate of cereal production. Past experience suggests that committed AMS levels might at some point limit ability to deal with such fluctuations. Increased government intervention, in the form of higher producer prices and storage subsidies, is particularly needed during years of good harvest. The sudden sharp increase in Total AMS, from DH 94 million in 1995 to DH 250 million in 1996, after introducing a storage subsidy to deal with a moderate increase in production, illustrates the nature of the problem.
As regards border protection, bound tariffs for most basic food products are relatively high. At the same time, the discrepancy between bound and applied tariff rates has been large, which suggests that Morocco can easily cope with any further moderate reduction of bound rates. These relatively high tariffs, together with the SSGs reserved for about 374 product lines and the new import system for cereals introduced in 1996, seem to provide adequate protection for its basic agricultural products.
All-in-all, and despite the generally favourable experience in this area, it would be prudent to examine closely current border and domestic support commitments, with a view to identifying their advantages and drawbacks in the light of national experience with domestic policy reforms and of questions that have been raised in WTO by Morocco's trading partners.
Morocco places great hopes on the prospects for its agricultural exports as a result of the UR. The major constraints that the AoA has imposed so far on Moroccan agriculture stem from commitments of developed countries, and in particular from the new EU import system for fruit and vegetables that locked in earlier protection accorded the domestic sector. It is clear that the provision in the AoA for improved access for agricultural products of export interest to developing countries was not taken into consideration in this case.9 As shown in the previous section, post-UR experience suggests that there has not been any improvement in market access for Moroccan fruit and vegetable products. That is likely to be an important issue for Morocco.
In its statement at the Seattle Ministerial Conference, it called attention to the need to include horticultural products (fresh and processed) in the proposed multilateral negotiations and emphasized that special consideration should be given to the importance of dismantling the non-tariff barriers facing these products.10
As discussed in Section II, Morocco has not benefited from the Marrakesh Decision, although the need for assistance was clear. The difficulty resided principally in the requirement to provide proof that the need for assistance resulted from the reform process under the UR. WTO members are not all in agreement on this issue. Morocco, together with a number of other NFIDCs and LDCs, has called for a comprehensive revision of the Decision in order to make it more effective and responsive to their needs.
Morocco values the SDT provisions because of the flexibility they allow in assuring the developmental and food security needs of the country. More than half the population is rural and highly dependent on agriculture for a living and the country has a high import dependency on basic food commodities.
Another important food security concern is the stability of domestic production, which is heavily dependent on weather conditions. By virtue of the high variability of its cereals production, the AoA exemptions on stockholding are important for Morocco. It is likely that Morocco would also be interested in raising and supporting proposals relating to stockholding and stability in domestic food supplies.
Stability of domestic food prices is another issue of high priority. Price stabilization formerly took the form of price controls, with annual reference prices based on past world prices and enforced through variable levies. With the implementation of the AoA, this system was abandoned. However, the Government was reluctant to subject basic foodstuffs to the volatility of the world market without some sort of intervention to stabilize prices. In this spirit, it reserved the right to trigger SSGs for some of its basic food products and introduced a new tariff system in 1996 for cereals (described earlier in Box 1). It is accordingly very likely to support the continuation of the current SSG system and the introduction of any new safeguard measures in favour of the developing countries.
As a net exporter of products where high quality is demanded, such as fruit, vegetables and fishery products, Morocco has faced several difficulties in the area of food quality and safety standards. At the WTO Ministerial Conference at Seattle, it called for greater transparency in the sphere of application of the SPS and TBT Agreements and stressed the importance of ensuring the active participation of developing countries in all stages of standard-setting, within a specialized international institution, so that the standards did not constitute new forms of non-tariff barriers detrimental to the developing economies.
Maritime fishing is a major economic activity in Morocco and of great importance in the context of social and development plans. The Government considers that the fisheries sector should be included in future negotiations. It favours a substantial reduction, or even elimination, of export subsidies, viewed as the root cause of international trade distortions in this sector. It also supports the creation of a WTO working group on subsidies to the fisheries sector.
All these issues are likely to have profound implications for agriculture and food security in Morocco. The Government has indicated that it favoured continued study of these topics by the relevant WTO working groups, under their terms of reference established at Singapore. It believes these questions need further analysis in order to gain a precise understanding of their linkages to trade, as well as of their implications for international trade. It prefers to see these matters included in the WTO work programme, rather than in any new round of multilateral trade negotiations.
1 Based on a background study prepared for the FAO Commodities and Trade Division by Lahsen Esslimi, Morocco.
2 For a succinct analysis of the Moroccan SAPs during the 1980s see Esslimi, L. 1990. "Economic liberalization and structural adjustment: the Moroccan sugar policy", Ph.D. Dissertation, Purdue University, and FAO, "Selected Issues in Agricultural Policy Analysis in the Near East", Economic Development Paper No. 130, Rome, 1995.
3 WTO, 1996. Trade Policy Review: Kingdom of Morocco, Geneva.
4 For more detailed analysis of the various commitments made by Morocco under the AoA see Britel, A., Houmy A. and Lhaj A. 1998. "Expérience Marocaine Relative à l'Execution des Régulations de l'Uruguay Round". Paper presented at the Expert Consultation on the Preparation for the Next Trade Negotiations on Agriculture, Rabat, December 1998; Esslimi, L. 1996. Impact des mesures d'ajustement des prix et des incitations sur l'agriculture marocaine, FAO Final Report of Project TCP/MOR/443(A); Esslimi, L. 1996. "Réformes economiques et leur impact sur le secteur céréalier au Maroc". Paper presented at the International Symposium on GATT Implementation and Structural Adjustment in the Mediterranean Region, Rabat, Morocco, June 1996; and Hag Elamin, N. 1999. "Implementation of the UR AoA in the context of emerging issues in the food and agriculture sector in the Near East". Proceedings of the FAO Expert Consultation on the Preparation for the Next Trade Negotiations on Agriculture, FAO Sub-regional Office, Tunis.
5 MTE is a bound specific tariff based on the price gap between the highest reference price (among the seasonally variable reference prices) and an EU internal price.
6 Morocco is also involved in a number of other regional trade agreements in North Africa and the Middle East. See The Impact of the Uruguay Round Agreement on Intra-regional Agricultural Trade in the Near East. FAO Regional Office for the Near East, Cairo, Egypt, 1998.
7 While the value of exports increased by 38 percent, there was no change in volume terms. The value growth having been entirely due to higher export unit values.
8 Food excludes fishery products.
9 The issues facing countries in the Mediterranean region receiving preferential quotas for fruit and vegetables are presented in some detail in the case study of Egypt in this volume. See also Grethe and Tangermann (1999), op.cit.
10 Statement by H.E. Mr. Alami Tazi, Minister of Commerce, Industry and Handicrafts.
