By signing the association agreement with the EU, Morocco has taken another step towards integrating its economy. But will the advantages outweigh the sacrifices? By Philip Eade
A SUPPLEMENT TO EUROMONEY/JUNE 1996
Challenging times
For the past decade Morocco has followed imf programmes carefully. Now the country is bracing itself for a sterner test presented by its association agreement with the European Union.
The benefits for Morocco of the agreement signed last autumn are not immediately obvious. It provides only small increases in quotas for a limited number of agricultural products. It changes little for manufacturing products, the vast majority of which already have free access to the European market.
"It's more of a strategic thing, an anchor allowing us to adapt ourselves to international standards," says Brahim Benjelloun Touimi, a director of Banque Marocaine du Commerce Exterior (bmce). "Europe is already Morocco's number one trading partner [two-thirds of Morocco's trade is with the eu], but the agreement will import stability into our economy." A foreign banker adds: "What is important is that the link-up will necessitate further improvements in the quality of production and handling. At present the low cost of labour is too often offset by inefficiency."
The agreement represents a big challenge to Moroccan industry which will soon have to compete with an influx of European products.
