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Morocco denies a revision of free trade agreements with Tunisia and Egypt

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Econostrum | 20 January 2022

Morocco denies a revision of free trade agreements with Tunisia and Egypt

MOROCCO / TUNISIA / EGYPT. After several days of rumors fueled by the Moroccan and Tunisian press, Ryad Mezzour, Moroccan Minister of Industry and Trade, put an end to the controversy. Interviewed by media24, he denied, on Wednesday 19 January 2022, the information published according to which Rabat was working on a revision of the free trade agreements (FTA) signed with Tunisia and Egypt.

At the root of the matter is a circular issued on 3 January 2022 by the Moroccan Customs and Indirect Tax Administration. It was issued to comply with the recommendations of the World Customs Organisation (WCO) after the amendments on the Harmonised System HS 2022. Based on customs tariffs and trade statistics in 211 countries, it came into force on 1 January 2022.

Morocco therefore had to update the customs codifications on the lists annexed to the bilateral FTA between Tunisia and Egypt.

A precedent with Turkey

According to the minister, the media misinterpreted. "These changes have had no impact on the preferential treatment under the bilateral free trade agreement between Morocco and Tunisia," he said in the columns of our colleague. The products covered by the FTA continue to be imported free of customs duties and taxes of equivalent effect. With the exception, however, of products on a joint Moroccan-Tunisian list which are subject to a single tax of 17.5% on import into both countries. But also, those included in a common negative list (18 products) and thus provisionally excluded from tariff dismantling by the two countries. As for trade with Egypt, only six categories of products are in the same case.

The trade balance between Morocco and Tunisia is unfavourable to Rabat with 708 million dinars (216 M€) of Tunisian exports against 370 million dinars (112.8 M€) of Moroccan exports.

To protect the Moroccan industrial fabric and jobs, such a measure of revision of the FTA (signed in 2004 and entered into force in 2006) was, on the other hand, taken in August 2020 against Turkey to balance the trade deficit with this country (19.5 billion dirhams - €1.85bn - in 2019 up 22% on 2018). 1,200 products (textiles and clothing, leather, automobiles, metallurgy, wood, electricity) have been excluded from the FTA. An annual evaluation is planned to possibly revise this list. Since May 2021, these products have been subject to a customs duty equivalent to 90% of the common duty corresponding to their tariff heading, i.e. 36% of the value of the product. This is for a period of five years.

At the beginning of January 2022, Ryad Mezzour indicated that the free trade agreements concluded by Morocco with several countries over the past twenty years, represented 351.5 billion dirhams of foreign investment between 2011 and 2020, against 249 billion dirhams between 2001 and 2010 and 77.5 billion dirhams between 1991 and 2000.

 source: Econostrum