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Join on Telegram Doha – The United States Trade Representative (USTR) released its 2024 National Trade Estimate (NTE) Report on March 29, assessing significant trade barriers faced by US exporters in 59 key markets.
The report dedicates substantial attention to Morocco, a vital US trade partner since the 2006 implementation of the United States-Morocco Free Trade Agreement (USMFTA).
Under the USMFTA, Morocco immediately eliminated duties on 95% of industrial and consumer goods, with phased tariff reductions leading to complete duty-free treatment for most products by 2016. However, the NTE report underscores several persistent obstacles hampering US trade with Morocco.
A key sticking point is Morocco’s automotive standards. Morocco generally permits only vehicles complying with United Nations Economic Commission for Europe (UNECE) 1958 Agreement standards, effectively barring many US-made automobiles designed to meet Federal Motor Vehicle Safety Standards (FMVSS).
Although Morocco officially allowed FMVSS-compliant vehicle imports in 2016, US companies report Moroccan customs has yet to establish a regular process. “Over the coming year, USTR will continue its engagement with foreign governments and authorities on this issue, to ensure that US exports of FMVSS-compliant vehicles are able to access these markets, including… Morocco,” pledged the report.
The report also highlights inadequate intellectual property (IP) protection and enforcement in Morocco as an ongoing concern. While acknowledging Morocco’s efforts to tackle piracy and counterfeiting, it notes persistent challenges with digital piracy and the thriving counterfeit goods market.
The US urged Morocco to independently assess geographical indications (GIs) on their individual merits with appropriate due process, expressing concern about EU pressure on trading partners to adopt overly broad GI protections.
US insurance companies also face obstacles in Morocco. Though regulations appear nationality-neutral, in practice, US insurers say Morocco’s regulatory body “applies an authorization process that has impeded US insurance companies from introducing products that compete with Moroccan firms.”
Read also: US Congress Delegation Visits Morocco to Foster Bilateral Ties
Regulatory transparency and bureaucracy pose additional challenges. US businesses cite “irregularities with regard to certain government procedures, including a lack of clear and accessible information about new regulations and certifications relating to imports” as major hindrances. Rigid protocols, excessive red tape, and protracted delays in permitting and approvals, particularly with public entities, impede trade and investment.
Morocco’s foreign exchange policies also constrain trade. To conserve foreign currency, Morocco caps advance payment for imports at 30% of the shipment value, problematic for US exporters accustomed to full prepayment. Some resort to expensive letters of credit to mitigate this. Despite indicating in 2019 that it would phase out the limit, Morocco maintained the cap through 2023, with the US continuing to press for its elimination.
Beyond Morocco, the NTE report spotlights cross-cutting trade barriers affecting US exports globally. Agricultural trade is hampered by opaque facility registration requirements in Indonesia and China, unscientific sanitary and phytosanitary measures in India, Turkey, Mexico and the EU, and China’s failure to adhere to science-based standards on poultry. Inconsistent policies across EU member states create challenges in areas like customs, labeling, procurement, investment and IP.
The report sharply criticizes China’s “state-led, non-market approach,” which provides Chinese companies with “massive financial support and regulatory and other preferences.” USTR vowed to deploy all domestic trade tools and collaborate with allies to counter China’s “harmful policies and practices.” Problematic data localization policies enabling government surveillance and compliance issues were identified in China, Russia and elsewhere.
“The NTE Report has been, is, and will always be a work in progress, and we welcome input from all our stakeholders,” said Ambassador Tai. “We recognize that American trade policy must reflect the values of the American people.”
The report builds on USTR’s March 1 release of the President’s 2024 Trade Policy Agenda and 2023 Annual Report, with plans to issue the annual Special 301 Report on global IP protection within 30 days.
As the US strives to dismantle trade barriers and open markets, engagement with key partners like Morocco is crucial. While the USMFTA has spurred progress, the NTE report makes clear that substantial efforts are still needed to establish a level playing field for US exports. Ongoing dialogue and collaboration between the trade partners will be vital to effectively tackle identified obstacles and enhance mutually beneficial trade.
