Copyright 2011, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on International Trade & Investment, February 2011
Canada's Prime Minister Stephen Harper and Morocco's Prime Minister Abbas El Fassi recently announced the launch of free trade negotiations between their two countries. A Canada-Morocco free trade agreement (FTA) has the potential to expand Canada's commercial presence in Morocco, the Mediterranean and North African regions. With the World Trade Organization (WTO)'s Doha Round of trade negotiations still in flux, the impetus to pursue an FTA with Morocco can be viewed as part of the Canadian government's current strategy of focusing on bilateral and plurilateral free trade agreements with key strategic partners.
CANADA-MOROCCO TRADE RELATIONSHIP
Canada currently maintains a trade surplus with Morocco. Major Canadian exports include cereals, mineral fuels and oils, vehicles, vegetables and pharmaceutical products (valued at C$375-million in 2009), while major imports include fruits, woven goods and footwear (valued at C$138-million in 2009). Although exports have increased in recent years – Canada's exports to Morocco increased 22.9% from 2008 to 2009 – Canada lags behind other major trading powers in the region. As a result, Canadian businesses have identified Morocco as a priority market for an FTA. Morocco, a country of 32 million, has been widely viewed as the gateway to Africa and has therefore been courted by other major trading nations. Morocco agreed to an association agreement with the European Union (EU) in March 2000 and an FTA with the United States in March 2004. A Canada- Morocco FTA would provide an avenue to deepen Canada's commercial presence in the Mediterranean and North African regions. Morocco is a member of the Greater Arab Free Trade Area (GAFTA) and maintains strong economic ties with Tunisia, Egypt and Jordan (as signatories to the Agadir Declaration). A Canada-Morocco FTA would better position Canadian business vis-à-vis competitors, particularly those that benefit from current preferential trading arrangements with Morocco.
SCOPE OF THE FTA
Canada has indicated that it intends to pursue a "comprehensive" FTA that would cover a wide range of areas, including trade in goods and services, investment, government procurement, environment and labour cooperation. A comprehensive FTA would likely deliver commercial benefits for Canada across a wide range of sectors, including the manufacturing, agriculture and agri-food, and service industries. Canada has recently shown preference for the comprehensive FTAs over traditional FTAs (focused on tariff reduction). Canada is currently in the process of negotiating a Comprehensive Economic Trade Agreement with the EU and a Comprehensive Economic Partnership Agreement with India. Canada also has ongoing FTA negotiations with the Ukraine, South Korea, the Caribbean Community, the Dominican Republic, and the Central America Four (El Salvador, Guatemala, Honduras and Nicaragua).
CONCLUSION
Although no timeframe has been given for negotiations, the Harper government has committed to engaging all stakeholders to ensure that their interests and concerns are taken into account during the negotiations. Therefore, the early stages of the process will provide opportunities for corporations and stakeholders looking to increase their presence in Morocco and in the greater Mediterranean and North Africa regions, as well as for Moroccan corporations and stakeholders looking to establish their presence in Canada. Interested parties should take this opportunity to determine the best possible methods of influencing negotiation strategies and objectives of the Canadian and Moroccan governments prior to negotiations beginning in earnest.
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