- The signing of the US-Moroccan free trade agreement last week is celebrated by the North American agricultural industry. Subsidised US grain producers are looking forward to strongly increase their exports to Morocco. For Moroccans, this will mean cheaper feed grains but also fiercer competition for non-subsidised Moroccan farmers.
The US Grains Council (USGC) - a grouping of American farmers and agribusiness organisations - today applauded the signing of the US-Morocco Free Trade Agreement on Thursday, 17 June, by US Trade Representative Robert Zoellick and Moroccan Minister-Delegate of Foreign Affairs and Cooperation, Taib Fass-Fihri. The Council urged the US Congress to "promptly pass the Free Trade Agreement this summer," so that it turns into effect.
Once approved, the US-Morocco Free Trade Agreement will immediately eliminate tariffs on 95 percent of bilateral trade in consumer and industrial products, with all remaining tariffs to be eliminated within nine years - the best market access package of any US Free Trade Agreement with a developing country signed to date, according to the USTR.
- The US Grains Council has been actively building markets in Morocco for US maize, sorghum and barley for many years, said USGC Chairman Terry Wolf. "The completion of a free trade agreement between the United States and Morocco will further benefit US feed grain exports," Mr Wolf added.
Morocco's expanding poultry sector is driving the country's demand for feed grains. While poultry is the fastest growing meat production sector in Morocco, the cost of chicken meat production is one of the highest when compared to other middle-income countries. "Costs to the Moroccan poultry producers will be significantly reduced through lower feed grain prices as a result of this agreement," USCG holds.
The reduction and elimination of tariffs on US maize, sorghum and barley not only provides for a further expansion of the Moroccan market for feed grains, but also will allow the United States to capture a larger portion of that important growth market.
In 2002, the United States accounted for approximately 60 percent of Morocco's total corn imports. However, due to stiff competition from Latin America, the US share decreased to only about 10 percent of the over 1 million metric tons Morocco imported last year. As the heavily subsidised US producers now also get the most favourable import tariffs, Latin American farmers will find it difficult to compete on the Moroccan market in the future.
While Moroccan poultry producers may look forward to lowered feeding costs, national farmers however have reason to fear the new prices on US imports. The Moroccan government cannot afford to subsidise its agribusiness and farmers in the same way and subsidised US imports may come at lower prices than Moroccan producers can compete with. Alternatively, the mostly impoverished Moroccan cultivators will need to lower their revenues.
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