Taking EU-Moroccan relations to the next level

Chakib Alj, President of the General Confederation of Moroccan Enterprises, speaks to The Parliament Magazine about the potential benefits of a stronger, deeper relationship.
Caption: EU and Moroccan flags | Source: Adobe Stock

By General Confederation of Moroccan Enterprises

General Confederation of Enterprises of Morocco (CGEM) is the voice of the private sector in Morocco. Founded in 1947, it represents more than 90,000 direct member and affiliated companies.

01 Oct 2021

Welcome to Brussels Mr. Chakib Alj. Why did you make the trip here? And how would you describe Morocco’s relations with the EU more generally?

Thank you, I’m very happy to be here. It is a challenging time for Europe and Morocco, due to the pandemic, but it is also a moment of opportunity. We recently had elections which brought in a modern coalition that supports improved EU-Morocco relations. The pandemic also revealed how vulnerable and intertwined we are. We share the EU’s strategic interests on many topics, from regional security to the green transition. We share the same Mediterranean challenges – climate change, migration, energy challenges. And we are aligned on the solutions needed to address them: deeper trade, further economic integration and more sustainable development.

As the EU’s largest trading partner [i][1] in the Southern Neighbourhood, we firmly believe that we must modernise our trade and investment ties. This is why I am here: to call on the EU institutions for a modernisation that is fully supported by both the Moroccan and the European business communities. This call has been answered through the ‘Modernisation Pact on Trade and Investment between the EU and the Kingdom of Morocco[2]’, adopted last week by CGEM, Business Europe and EuroCham Maroc.

 

You mentioned Morocco is already the EU’s largest trading partner in the region. Can you elaborate on this?

Currently, 25% of EU trade in the region is with Morocco, worth €35.3bn and producing an EU surplus of €5bn[3]. This means that our agreement with the EU has boosted trade on both sides, and our companies are already doing a great deal of business together.

“The people of the Sahara deserve to enjoy their right to development. This is why we want to move forward and push our trade and investment relationship to the next level”

However, our agreement dates back to 2000[4] and needs to consider today’s fast-changing needs: shorter and more resilient value chains, the digital economy and the green transition. There is enormous untapped potential in EU-Morocco relations, especially investment opportunities. Morocco could serve as a financial hub for the whole African continent, and businesses could benefit from synergies in agri-food trade and liberalised digital services. While our potential for renewable energy, notably hydrogen, could support the EU’s transition. All this is just one negotiation away.

 

The Court of Justice of the EU has just published its ruling on the applicability of Morocco’s agreement with the EU. The Court has been asked several times to rule on the legality of the EU-Morocco agreements and their applicability to Western Sahara. What can you tell us about this?

As businesses we only want clarity, visibility, and a solution as soon as possible. As businesses, we can only promote and support sustainable socio-economic development in the region, which now is only possible through Morocco’s trade and investment agreement.

The Polisario Front’s requests for annulment of the agreement have been repeatedly rejected. In all final instances, the armed group was alone against the Council of the EU and the European Commission, as well as Member States and businesses. The 2019 update of the EU-Morocco agreements[5] was already made to fulfil the CJEU’s requirements, and the Commission reported that it is working well and benefiting everyone. We can only hope to stay on this positive path, and I believe our pact with BusinessEurope[6] [ii] shows that European and Moroccan businesses are on the same page. We hope that the appeal that will be launched against today’s decision will go in this direction and thus welcome the provisional application of the agreements and shared EU-Morocco focus on maintaining stability of trade.[7]

 

How do businesses feel about this ruling?

As mentioned, businesses need legal certainty and stability, something an armed group like the Polisario Front will never be able to provide. Therefore, businesses will continue to cooperate with authorities to ensure that the agreement is protected.

For example, thanks to the agreement, the Commission is able to track all imports to the EU and their exact provenance, while Moroccan authorities are recognised by EU certification for the quality of their exported products. Commission estimates show that roughly 14,000 jobs in agriculture and 45,000 in fishing, about 1/10 of the population[8], depend on exports to the EU. These are solid foundations to build on.

"We should now negotiate a more modern agreement and welcome how the EU and Morocco came together after the CJEU ruling, ensuring continuity of trade pending the appeal”"

The people of the Sahara deserve their right to development. This is why we want to move forward and push our trade and investment relationship to the next level. This is also why we want to focus on what we are saying with our European counterparts. We have no time to waste.

 

And what exactly are your priorities when you talk about ‘modernising’ EU-Morocco relations?

Our pact calls on the EU institutions to unleash the untapped economic potential of this partnership by pursuing an integrated, and eventually free, trade area, focusing on eight working priorities that can help achieve this objective, three in particular.

First, investment: we would like to see an agreement with the EU on the protection and promotion of foreign direct investment, to allow green investments, especially in renewable energy. This would empower both of us and allow the EU to meet its sustainability targets. Second, integration: more resilient value chains are a key shared objective. As the EU’s “open strategic autonomy”[9] plans confirm, we should work on non-tariff barriers to allow more integration, for instance cross-border power purchase agreements and renewable energy supply. Third, sustainability: we must ensure that what we do is framed within a wider green agenda. Morocco is a global pioneer for green policies, and the “Maroc Plan Vert[10]” has many similarities with the EU Green Deal.

So where do we go from here? After the update of the agreements in 2019, our relations gained new momentum, and the joint declaration[11] confirmed a new alignment of EU-Morocco cooperation. With this CJEU ruling out[12], we finally have more clarity, so we can now negotiate a more modern agreement.


[1] European Commission, EU-Morocco Trade Picture. Available at https://ec.europa.eu/trade/policy/countries-and-regions/countries/morocco/ . Last accessed: September 2021

[2] CGEM, BusinessEurope and EuroCham Maroc (2021) Modernisation Pact on Trade and Investment between the Kingdom of Morocco & the European Union. Available at https://www.businesseurope.eu/sites/buseur/files/media/position_papers/rex/2021-09-21_joint_statement_on_the_modernisation_of_the_eu-morocco_association_agreement.pdf . Last accessed: September 2021

[3] European Commission, EU-Morocco Trade Picture.

[4] Ibid

[5] OJEU (2019) Agreement in the form of an Exchange of Letters between the European Union and the Kingdom of Morocco on the amendment of Protocols 1 and 4 to the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Kingdom of Morocco, of the other part. Available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.034.01.0004.01.ENG . Last accessed: September 2021

[6] CGEM, BusinessEurope and EuroCham Maroc (2021) Modernisation Pact on Trade and Investment between the Kingdom of Morocco & the European Union

[8] European Commission (2020) 2020 Report on the benefits for the people of Western Sahara on extending tariff preferences to products from Western Sahara. Available at https://ec.europa.eu/taxation_customs/system/files/2020-12/2020-report-benefits-preferential_access.pdf . Last accessed: September 2021

[9] European Commission (2021) Trade Policy Review - An Open, Sustainable and Assertive Trade Policy. Available at https://trade.ec.europa.eu/doclib/docs/2021/february/tradoc_159438.pdf . Last accessed: September 2021

[10] FAO, Plan Maroc Vert : les grands principes et avancées de la stratégie agricole marocaine. Available at http://www.fao.org/family-farming/detail/en/c/416258/ . Last accessed: September 2021

[11] CGEM, BusinessEurope and EuroCham Maroc (2021) Modernisation Pact on Trade and Investment between the Kingdom of Morocco & the European Union

[12] CJUE (2021) Judgments of the General Court in Case T-279/19 and in the joint Cases T-344/19 and T-356/19. Available at https://curia.europa.eu/jcms/jcms/Jo2_7052/en/ . Last accessed: September 2021


Brought to you by the General Confederation of Moroccan Enterprises


This article reflects the views of the author and not the views of The Parliament Magazine or of the Dods Group

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