The benefits of USMFTA

The US-Morocco Free Trade Agreement (USMFTA) is a bilateral  trade agreement between the United States and Morocco. The agreement was signed on June 15, 2004, followed by U.S. President George W. Bush's signing of the USMFTA Implementation Act on June 17, 2004. 

This FTA is believed to have many benefits for both partners. I chose to represent some of them.

First, as a result of the U.S.-Morocco Free Trade Agreement (FTA), 95% of U.S. consumer and industrial goods exported to Morocco no longer need to pay a tariff. Tariffs on U.S. goods export to Morocco will be phased out entirely by 2024. Since the agreement entered into force on January 1, 2006, the value of U.S. exports have risen from $481 million in 2005 to $1.95 billion in 2010. This translated into a trade surplus with Morocco of $1.26 billion in 2010, a 3,505% increase over the $35 million trade surplus of 200. In the same year, 92 US comapanies, 12 franchises, 9 liaison offices, and 22 NGO's schools, and USAID contractors have opened for business in Morocco. Most of the companies are large ones such as 3M, BF Goodrich, Amirecan Express, Caterpillar, just to name a few.

Second, the FTA also expands the significant protections already afforded U.S. investors under a Bilateral Investment Treaty (BIT) signed in 1985. All forms of investment are protected under the FTA, including enterprises, debt, concessions, contracts and intellectual property. U.S. investors will enjoy in almost all circumstances the right to establish, acquire and operate investments in Morocco on an equal footing with Moroccan investors, and with investors of other countries. U.S. investment in Morocco stood at $233 million in 2009.

Third, U.S. companies that build production facilities in Morocco today will have an added advantage of exporting industrial products duty free to Europe by way of the Moroccan-E.U. Association Agreement signed in 2000. In addition, once the EU's Euro-Mediterranean Free Trade Area (EMFTA) is complete in 2010, additional duty free access will flow down to U.S. companies. This duty free access to the European market is of commercial and financial interest to U.S. businesses.

Finally, FTA with Morocco also has value for the US as a tool for stabilization and devvelopment and as a carrot in foreign-policy negotiations. An FTA with Morocco could aid the development of this poor country. 

Sources:

Bruce Arnold (July 31, 2003), The pros and cons of pursuing free trade agreements, Almanac of Policy Issues. Retrieved from: http://www.policyalmanac.org/economic/archive/free_trade_agreements.shtml

http://export.gov/fta/morocco/index.asp

http://en.wikipedia.org/wiki/Morocco%E2%80%93United_States_Free_Trade_Agreement#Benefits_of_the_USMFTA