Morocco's Trade, between Free Trade Agreements and Integration

into the African Union: Which Potential for Morocco's Foreign

Trade?

Oumaima Saadallah and Benaceur Outtaj

Laboratory of Economic Analysis and Modeling (LEAM), Research Center CIRPEC,

Mohammed V University of Rabat, Morocco

Keywords: Globalization, Free Trade Agreements, the African Continent, Trade Flows, Gravity Model, Trade Potential.

Abstract: In a context characterized by a remarkable consolidation of Morocco's efforts to effectively integrate the

globalization process, represented mainly by the signing of free trade agreements and the orientation towards

intra-regional trade with the African continent, this work aims at analyzing the trade flows of Morocco and

its two main trading partners; those of the African continent and those with which it has signed free trade

agreements, over the period 2000-2018. For this purpose, we use an augmented gravity model to estimate

trade between Morocco and these two groups of partner countries, and then simulate and calculate the trade

potential between Morocco and these countries. The results we generated demonstrate the existence of a trade

potential not yet exploited by Morocco in the two cases studied. The effective exploitation of the latter would

allow the Kingdom to boost its trade.

1 INTRODUCTION

In recent decades, the world economy has

experienced accelerated growth. This growth has

been largely sustained by the even faster growth in

international trade. Growth in trade can result from

technological advances as well as specific efforts to

promote trade and remove barriers. Thus, many

developing countries have opted to open up their

economies in order to take advantage of the

development opportunities offered by foreign trade.

However, the majority of these countries still do not

adopt this approach.

Morocco, as a developing country, has become

aware of the importance of trade openness as a key

factor in accelerating the development of its

economy. To this end, since the end of the 1990s, the

opening of the Moroccan economy has been

characterized by a remarkable and diversified

progress, particularly with the signing of free trade

agreements with the European Union, Egypt, Tunisia,

Jordan, the United States, Turkey and the United

Arab Emirates. This openness continues to develop

over time with the integration of Morocco into the

African Union and the strengthening of its relations

with its African neighbors by signing more than a

thousand agreements since 2000. The main objective

of this paper is to conduct empirical research to

analyze the trade between Morocco and its trading

partners, whether under free trade agreements or

those of the African continent. Such an analysis will

mainly allow to identify the potential of trade that the

kingdom has with its partners and the opportunities it

can get out of it to reduce its trade deficit. To do so,

we use a gravity model to estimate the magnitude of

trade between Morocco and the countries with which

it has signed FTAs on the one hand and Morocco and

countries on the African continent on the other. Based

on these estimates, it will be possible to simulate the

potential bilateral trade between Morocco and its

partners and to understand the weaknesses and

strengths of these trade relationships to finally

determine the countries with which it would be

beneficial to strengthen trade relations.

2 THE STRUCTURE OF

MOROCCO’S FOREIGN

TRADE

The openness rate of the Moroccan economy is

characterized by a growing trend: a remarkable

decrease from 2009 because of the global economic

Saadallah, O. and Outtaj, B.

Morocco’s Trade, between Free Trade Agreements and Integration into the African Union: Which Potential for Morocco’s Foreign Trade?.

DOI: 10.5220/0010447400800088

In Proceedings of the 3rd International Conference on Finance, Economics, Management and IT Business (FEMIB 2021), pages 80-88

ISBN: 978-989-758-507-4

Source: Generated by the author from UNCTADstat database.

Figure 1: Morocco’s opening rate during the period from

2000 to 2018.

crisis and a recovery since then to return to pre-crisis

levels.

Morocco's trade was multiplied by 4.5 from 1999

to 2018, rising from USD 17.5 billion to USD 80.1

billion according to the World Bank). The kingdom's

openness rate (calculated as the ratio (exports +

imports) to GDP) increased from 54.62% in 1999 to

87.99% in 2018.

Comparing Morocco to other middle-income

countries, the Moroccan economy is more open than

Brazil’s with a rate of 29.08%, Argentina with 30.7%,

India with 43.37%, Algeria (56%) or Turkey (60%),

but it’ less than Tunisia (99%) or Mauritania (126%),

and is almost at the average for the Arab world (89%).

Source: Generated by the author from UNCTADstat database.

Figure 2: the opening rate of a panel of emerging countries

in 2018.

The principal source of this openness to foreign

trade is the strong growth in imports, which has

resulted in a significant worsening of the trade deficit.

The trade deficit widens for the third consecutive

year, to reach 205.9 billion DH in 2018 representing

18.5% of GDP against 17.8% in 2017.

In 2018, Morocco's trade balance shows a deficit

with all continents except Africa, with which

Morocco records a trade surplus.

2.1 Foreign Trade between Morocco

and Its African Partners

Trade between Morocco and its African partners has

grown remarkably (from an average of US$342.78

million during the period 1995-1999 to an average of

US$1.08 billion in 2000-2018 for exports and

US$469.64 million to US$1.58 billion for imports

over the same periods), However, if we reason in

terms of weight, their share in Morocco's total trade

has remained almost the same for both imports and

exports, yet we note that the share of Morocco's trade

with the European Union still represents the largest

share of the kingdom's trade with the rest of the world

(more than 50% of exports and also imports). In

addition, the weight of North Africa remains

important in Moroccan trade with the African

continent. However, over the last two decades, North

Africa has ceded its position in favor of sub-Saharan

Africa in terms of exports with the Kingdom.

Table 1: Morocco’s exports to the African continent in

thousands of U.S. dollars.

Partner Average

1995-1999

Part Average

2000-2018

Part

World 7090602.33 1.00 16856013.81 1.00

Africa 342778.83 0.05 1082939.39 0.06

North of Africa 226326.65 0.03 314399.90 0.02

Sub-Saharan

Africa

118034.25 0.02 754652.98 0.04

EU28

(European

Union)

4752639.11 0.67 10713593.65 0,64

Source: Generated by the author from UNCTADstat database.

Table 2: Morocco’s imports from the African continent in

thousands of U.S. dollars.

Partner Average

1995-1999

Part Average

2000-2018

Part

World 10065480.81 1.00 32095669.11 1.00

Africa 469637.30 0.05 1583563.85 0.05

North of Africa 242532.78 0.02 379422.13 0.01

Sub-Saharan

Africa

227417.13 0.02 1204689.29 0.04

EU28

(European

Union)

5306733.78 0.53 16865816.36 0.53

Source: Generated by the author from UNCTADstat database.

The classification of Moroccan exports to the

African continent by country confirms that North

African countries are the most dominant, notably

Algeria, Tunisia, Libya and Egypt which still retain

their position among the top 10 preferred destinations

for Morocco's exports on average over the two

periods 1999-1995 and 2000-2018, with Libya as

100

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

Opness rate

Years

100

150

Brazil

Argentina

India

Perou

Bolivia

Algeria

South Africa

Turkey

Paraguay

Morocco

Tunisia

Moauritania

Opness rate

Emerging countries

Morocco’s Trade, between Free Trade Agreements and Integration into the African Union: Which Potential for Morocco’s Foreign Trade?

Morocco's main African customer in 1999-1995,

before being replaced by Algeria over the period from

2000 to 2018, Tunisia still retains its place as

Morocco's second largest customer. As far as sub-

Saharan Africa is concerned, countries such as

Senegal, Côte d'Ivoire and Nigeria are still among

Morocco's first partners over both periods. What

these countries have in common is that they have

signed trade agreements with Morocco dating back to

at least 1980.

2.2 Trade between Morocco and FTA

Morocco's trade under FTAs accounts for the

majority of Morocco's overall trade (more than two-

thirds of exports and imports are to or from these

countries).

The agreement with the European Union remains

the main free trade agreement with a very large share.

Exports benefiting from this agreement amount to

US$10.71 billion in the period from 2000 to 2018.

Reasoning in terms of share, we note that the weight

of Morocco's exports to the EU fell from 67%

between 1995 and 1999 to 63% in the period from

2000 to 2018. On the import side, we note a

stagnation of the share of EU countries with a

percentage of 53%.

The agreement with the Arab Free Trade Area

represents the second dominant group in the trade

carried out within the framework of FTAs, with a

very low share compared to the agreement with the

European Union (0.04 for exports and 0.11 for

imports in the period from 2000 to 1018). The

agreement with the United States ranks third before

the agreement with Turkey. For all the free trade

agreements signed by Morocco, it is noticeable on the

one hand that the level of exports over the periods

1995-1999 and 2000-2018 has decreased and on the

other hand that imports have increased. Over time, the

latter eventually outweighed exports to reach 74%.

Table 3: Moroccan exports in the framework of FTAs in

thousands of U.S. dollars.

Partner Average

1995-1999

Part Average

2000-2018

Part

World 7090602.33 1.00 16874528.08 1.00

EU28

(European

Union)

4752639.11 0.67 10706101.84 0.63

AFTA 352872.25 0.05 655513.82 0.04

Turkey 55487.75 0.01 324059.04 0.02

USA 274914.86 0.04 682100.88 0.04

Others 68755.84 0.01 212007.75 0.01

FTAs 5435913.97 0.77 12367775.58 0.73

Source: Generated by the author from UNCTADstat database.

Table 4: Moroccan imports within the framework of the

FTAs in thousands of U.S. dollars.

Partner Average

1995-1999

Part Average

2000-2018

Part

World 10065480.8 1.00 32076261.8 1.00

EU28

(European

Union)

5306733.78 0.53 16860506.7 0.53

AFTA 870965.32 0.09 3656892.75 0.11

Turkey 89138.17 0.01 971340.30 0.03

USA 606946.28 0.06 2042314.97 0.06

Others 118559.58 0.01 316112.27 0.01

FTAs 6992343.13 0.69 23847166.99 0.74

Source: Generated by the author from UNCTADstat database.

The classification of Moroccan exports to the

European Union by country shows that France, Spain,

Germany, Italy, Belgium, Portugal and Poland are

still at the top of the list of preferred destinations for

Morocco's exports on average over the two periods

1999- 1995 and 2000 and 2018, with France and

Spain still holding their leadership as Morocco's first

and second customer respectively since 1995.

Germany was Morocco's third European customer in

1999-1995, before leaving its place to Italy over the

period from 2000 to 2018. The United States, in turn,

occupies a very important place in Moroccan trade to

the world; it is among the top ten preferred

destinations for Morocco on average during both

periods with a remarkable improvement; moving

from sixth position in the 1995-1999 period to fourth

in the following period. Such improvement is also

noticeable in trade with Turkey, from eleventh to

ninth rank in both periods respectively.

But it should be noted that the Kingdom has not been

able to take advantage of these agreements. In fact,

out of more than fifty countries with which it has

signed free trade agreements, it has a trade deficit

except with Jordan.

3 GRAVITATIONAL MODEL:

LITERATURE REVIEW

3.1 The Theoretical Foundations of the

Gravity Model

The International Trade Gravity Model is considered

to be the most effective model for forecasting and

explaining bilateral trade from an econometric

perspective. This model is based on the principle of

the Newtonian theory of gravitation; it highlights

trade between two economies as a function of their

GDP, which represents the economic power of the

FEMIB 2021 - 3rd International Conference on Finance, Economics, Management and IT Business

countries, and the distance between them, which

represents transport costs.

Anderson (1979)

was among the firsts to attempt

to provide a theoretical basis for gravity models.

Anderson's theory is based on a hypothesis that was

considered innovative at the time, namely, that each

nation produced a unique good that was only

imperfectly substitutable for the goods of other

nations.

The next set of theoretical foundations for the

gravity equation came when Bergstrand (1985)

sought to provide theoretical foundations based on

monopolistic competition; in particular, he develop

the idea discussed by Paul Krugman (1980)

, and

Helpman and Krugman (1985)

. In this model, similar

countries trade differentiated goods because each

consumer has a preference for variety.

This approach, which theoretically derives the

equation from the gravity model, is mainly used to

explain intra-industry trade. More generally, the

emergence of the "new trade theory" in the late 1970s

and early 1980s explained the volume of trade

between two countries by the size of the economies,

distance, price levels, and the exchange rate. In light

of this trend of studies, the gravity model has moved

from too few theoretical bases to too many. This

theory is particularly successful in approximating the

potential for trade between developed countries.

A. Presentation of the gravity model :

The simple gravity model is written as

𝑋



=𝑐

𝑌







𝑌







𝐷







With:



: is the level of exports from country i to country j;

c : is a constant;



: is the volume of GDP of country i;



: is the volume of GDP of country j;



: is the distance from country i to country j;

We take this equation in logarithmic form so that we

can interpret the coefficients of each explanatory

variable in terms of elasticity:

log(𝑋



) = log(𝑐) + 𝛼



log𝑌



+𝛼



log𝑌



+𝛼



log𝐷



Anderson J. (1979) A Theoretical Foundation for the Gravity

Equation, American Economic Review, vol. 69, n° 1, 106-116

Bergstrand, J.H. (1985). The gravity equation in international

trade: Some microeconomic foundations and empirical evidence.

Review of Economics and Statistics num. 67

Krugman, P. (1980). Scale economies, product differentiation,

and the pattern of trade. The American Economic Review, n° 70.

This so-called simple model takes only GDP and

distance as explanatory variables, but in reality

foreign trade is not only influenced by these two

factors, hence the need for the augmented gravity

model that adds other potential determinants to

broaden the scope of the model and better capture the

effect of other characteristics of trading partners.

The first augmented gravity model emerged through

the work of Tinbergen, Linneman (1966)

including a single "population" variable as an

explanatory variable in the simple gravity equation.

Then, recent empirical studies (Frankel, 1997;

Frankel et al., 1995; Glick and Rose, 2002; Anderson

and van Wincoop, 2003; Carrère, 2004) have

attempted to add other variables that influence trade

in order to further increase the simple gravity model

such as: the level of economic development measured

by GDP per capita, cultural factors such as common

language and common colonizer; trade agreements;

common borders; etc. The first model of augmented

gravity was developed by Tinbergen, Linneman

(1966) by including a single "population" variable as

an explanatory variable in the simple gravity

equation.

Taking these improvements into account, the

logarithmically augmented gravity model can be

written in the following generalized form:

log(𝑋



) = log(𝑐) + 𝛼



log𝑌



+𝛼



log𝑌



+𝛼



log𝐷



+𝛾



log𝐵







+𝜀



Where:



: is the level of exports from country i to country j;

c : is a constant;



: is the volume of GDP of country i;



: is the volume of GDP of country j;



: is the distance from country i to country j;



: any other variables that influence trade such as

population sizes, trade agreements (Ghosh and

Yamarik, 2004; Carrère, 2004), common language

and common border, etc.

Helpman, E. & P. Krugman (1985). Market structure and foreign

trade: Increasing returns. Imperfect Competition and the

International Economy. Cambridge, MA: MIT Press

Linnemann, H. (1966). An econometric study of international

trade flows. Dissertation. Netherlands School of Economics.

Morocco’s Trade, between Free Trade Agreements and Integration into the African Union: Which Potential for Morocco’s Foreign Trade?

4 ESTIMATION METHODS AND

RESULTS

4.1 Data Base

Our estimates are based on two samples: a sample of

44 countries that includes Morocco's African partners

and the second sample of 43 countries that includes

the various countries with which Morocco has signed

free trade agreements (see Annex 1). Our study

analyzes the period from 2000 to 2018. The export

variable was collected from the UNCTADstat

database. GDP, GDP per capita, area and population

are available in the World Bank's database (WDI).

The distances between Morocco and each partner and

the common language and border dummy were

collected from the database available on geo-cepii.

Trade and investment agreements are extracted from

the UNCTAD database. All estimates were made

using Stata 15 and Eviews 9 software.

4.2 Expected Signs of the Variables

The expected signs of the variables give an idea of

their effects on trade flows.

The expected sign of GDP is positive because the

more developed countries are, the more they will tend

to trade. Weighted distance is a proxy for transport

costs and presents an obstacle to exchange, so it

negatively affects trade (negative sign).

The existence, or otherwise, of a common border

between two countries should have a considerable

effect on the volume of trade. The expected sign for

the coefficient on this variable is therefore positive.

Sharing a common official language in turn

considerably reduces trade barriers. This ease of

communication should also have a positive impact on

trade flows. To this end, we anticipate a positive sign

for this variable.

The presence of an investment agreement is often

followed by the establishment of trade agreements.

This variable leads to a reduction in resistance to

trade, which would then imply an improvement in

export flows. The expected sign of this variable then

is positive.

The surface area of importing countries is used to

express market size. The expected sign of this

variable is then positive.

4.3 Specification of the Model

We retain for our study an augmented specification of

the gravity model in the following form:

log(𝑋



) = 𝛼



+𝛼



log𝑌



+𝛼



log𝑌



+𝛼



log𝑃𝑂𝑃



+𝛼



log𝑃𝑂𝑃



+𝛼



log𝑆𝑢𝑝



+𝛼



log𝐷



+𝛼



𝐶𝑜𝑛𝑡𝑖𝑔



+𝛼



lang𝑜𝑓𝑓



+𝛼



𝐴𝐼



+𝑏



+𝑐



+𝑢



+𝜀



Where:

𝑋



: Exports of goods from the country to country j in

thousands of $US.

𝑌



𝑎𝑛𝑑 𝑌



The volume of GDP of country i and j in

constant US$ 2011;

𝑃𝑂𝑃



𝑎𝑛𝑑 𝑃𝑂𝑃



: The volume of the population of

country i and j;

𝑆𝑢𝑝



: The area of country j Km2;

log𝐷



: The weighted distance between countries i

and j;

𝐶𝑜𝑛𝑡𝑖𝑔



: The common border between i and j, takes

the two values 0 and 1;

lang𝑜𝑓𝑓



: The common language between i and j,

takes the two values 0 and 1;

𝐴𝐼



: Investment agreements between i and j (this

variable is devoted to the gravity model used to

estimate Morocco's trade with its African partners,

takes the two values 0 and 1);

𝑏



: Country specific effects i;

𝑐



: The country-specific effects j;

𝑢



: Individual effects specific to country pairs.

*These variables are in logarithmic form in the

model, which makes it possible to interpret their

coefficients in terms of elasticity.

4.4 Estimation Methods

Today, studies working on gravity models use panel

data estimates instead of time-series estimates. This

method makes it possible to exploit more

information-rich data with a greater number of

observations and a lower risk of collinearity, more

accurate and more efficient estimators.

In this study we use the following forms of panel

econometric models in order to find the best

estimates:

- Specific effects model estimation (fixed or random

effect) according to Hausman test results.

- The Generalized Least Squares model, in order to

be able to fill in the gaps of the fixed effects model

and the random effects model.

4.5 Estimation Results

The results of the estimation of the random-effect

model appear to be more relevant than the results

FEMIB 2021 - 3rd International Conference on Finance, Economics, Management and IT Business

estimated using the fixed-effect model. This model

takes into account dummy variables and assigns a

coefficient to each one. For comparison purposes, we

estimated the same equation using the Generalized

Least Squares Method; this model gives us better

results because it allows correlation and error

heteroscedasticity to be corrected.

The following summary table shows that the

variable Morocco's GDP and the GDP of importing

countries (whether African partners or those with

which Morocco has signed FTAs) have positive and

significant coefficients, in accordance with the

expected signs.

The distance variable is always negative and

significant. The values of these coefficients indicate

that exports are highly inelastic with respect to

resistance factors related to purchase costs.

Concerning the "common language", the coefficients

associated with this variable are positive and

significant. The values of these coefficients show that

exports are highly elastic in relation to the common

language (strictly greater than 1).

These results are robust because they are invariable

with the different estimation methods used, and in the

two different cases studied in our study (Morocco

with the African continent and Morocco with the

countries with which it has signed FTAs).

The coefficient of the surface area of the importing

country is not significant, and this is invariable with

the different estimation methods used.

With respect to trade and investment agreements,

used as a dummy variable in the case of gravity model

estimation between Morocco and African countries,

the coefficient of this variable is positive with all

three estimation methods and significant with the

random effect method.

All the signs of the coefficients of the gravity

models used for the two cases studied show their

conformity with the hypotheses formulated

previously. With the exception of the common border

between two countries, the expected sign is positive,

but the estimates show the opposite. This may be

justified by the fact that Morocco cannot cope with

the problems associated with tariff and especially

non-tariff barriers, such as the presence of complex

customs and administrative procedures and

regulations, inefficient and costly transport systems,

etc. The reason for this may be that Morocco is not

able to cope with the problems associated with tariff

and especially non-tariff barriers, such as the

presence of complex customs and administrative

procedures and regulations, inefficient and costly

transport systems.

Table 5: Estimation results of the gravity model.

Africa FTAs

Methods

Random

effect

GLS

Random

effect

GLS

log𝑌



1.01* 2.51** 1.66* 1.81*

log𝑌



2.52* 0.49** 1.31* 1.08*

log𝑆𝑢𝑝



-1.09 0.04 -0.15 -0.03

log𝐷



-2.51* -2.39* -1.70* -1.76*

𝐶𝑜𝑛𝑡𝑖𝑔



-1.96** -0.87* -0.61 -0.76*

lang𝑜𝑓𝑓





0.58** 0.39* 0.23*** 0.21*

𝐴

𝐼



0.49*** 0.07 - -

C -19.98* -21.91* -22.75* -22.1*

Source: Generated by the author from the eviews9 software.

Note: ***, ** and * refer to the significance of the

coefficients at the 1%, 5% and 10% thresholds

respectively.

5 ANALYSIS OF TRADE

POTENTIAL

Based on our previous estimates using the

Generalized Least Square Method, we calculate the

trade potential, which is the ratio of observed exports

to estimated exports.

A ratio that exceeds 100% means that there is no

untapped trade potential. On the contrary, a ratio

below 100 % means that there is trade potential to be

exploited and that the importing country should take

greater advantage of trade opportunities with the

partner country.

5.1 The Case of Trade between

Morocco and the African Continent

Table 6: Morocco’s trade potential with Africa.

Id export

estimated

export

trade

potential

CODE Export

estimated

export

trade

potential

BFA 1000.38

26525.53

3.77% SWZ 48.41 320.02 15.13%

CAF 1342.23 2182.72 61.49% SYC 321.20 427.50 75.13%

EGY 112.73

53061.59

0.21% TCD 5187.60 9004.10 57.61%

ETH 3568.57 3677.13 97.05% TUN

110003.16 125574.69

87.60%

LBY

62647.74 65723.74

95.32% UGA 2202.33 2222.36 99.10%

MWI 336.65 526.99 63.88% ZMB 18.44 1224.65 1.51%

RWA 1948.48 2954.31 65.95% ZWE 19.63 902.63 2.17%

Source: Author’s calculations using estimates

Estimating the ratios of Morocco's export trade

potential with these African partners allows the

following findings to be derived:

There is a category of countries with which

Morocco has no trade potential, where the ratio

calculated exceeds 100%. This group represents

almost 70% of our sample of African countries,

Morocco’s Trade, between Free Trade Agreements and Integration into the African Union: Which Potential for Morocco’s Foreign Trade?

including Algeria, Angola, Côte d' Ivoire, Kenya,

Mauritania, and South Africa.

A second category of countries with which

Morocco has a trade potential below 100%. In this

category, there is a group of countries with which the

kingdom has a trade potential that is below 50%, with

Egypt leading the way with the greatest potential for

adjustment (the lowest foreign trade potential),

followed by Zambia, Zimbabwe, Burkina Faso and

Eswatini. And a second group, countries with which

Morocco has a trade potential of more than 50%,

which are 9 of which: Central African Republic,

Ethiopia, Libya, Tunisia, and Uganda.

In general, we can see that Morocco manages to

exploit the full range of possible export potential with

African countries, with an average trade potential of

the entire sample exceeding 400 percent. This is

mainly due to Morocco's efforts to consolidate its

relations with the continent by signing more than

1,000 preferential agreements with its neighboring

countries. Moreover, when analyzing for each partner

country, the Kingdom needs to strengthen its efforts

to further boost trade with economies whose potential

is not fully exploited.

To boost Morocco's intra-African trade further, a

number of problems need to be addressed that impede

the exploitation of the continent's full export

potential. The problem of competitiveness of

Moroccan products relative to those of other countries

outside the continent is among the major problems

that need to be addressed. There are cases where

products that could have been supplied by Morocco

to other African countries are instead supplied by

other economies outside the continent because of

Morocco's lack of competitiveness. The latter is

associated in most cases with technical progress and

production processes, but there are other factors that

emerge particularly in the shipping and marketing

phase, such as the existence of complex customs and

administrative procedures and regulations, inefficient

and costly transport systems, differences in rules of

origin, and product and transport standards.

Therefore, it is essential to review and simplify

customs procedures to take full advantage of the

benefits offered by this market.

Infrastructure, in turn, is a major problem that

impedes such trade on the continent. Indeed,

inadequate and inefficient infrastructure is one of the

main causes behind the low level of trade between the

Kingdom and the African continent, and the lack of

competitiveness not only of Morocco but of the

continent in general. The establishment of solid

infrastructure (road, rail, and air) at the continental

level would undoubtedly lead to an optimization of

the costs and time required for the transport of goods.

The existence of appropriate financing

mechanisms is, for its part, a prerequisite for an

optimal and efficient exploitation of the trade

potential between African countries. The absence of

a common currency, regional institutions for

financing enterprises, and the lack of a continent-

wide currency are all factors that discourage many

enterprises and slow down the development of trade.

The development of continental financial institutions,

as well as regulatory frameworks to govern and

encourage trade and financial exchanges among

countries on the continent, are therefore necessary

conditions for African trade to begin to flourish.

5.2 The Case of Trade between

Morocco within the Framework of

Free Trade Agreements

Table 7: Morocco’s trade potential under FTAs.

Id Export

estimated

export

trade

potential

Id Export

estimated

export

trade

potential

ARE 89620.22 90631.17 98.88% IRQ 22642.95 84210.57 26.89%

AUT

184254.84 203603.54

90.50% ITA

1212853.3

1784329.7

67.97%

BEL

410076.78 504136.54

81.34% KWT 20769.57 34805.94 59.67%

BHR 6611.26 9832.33 67.24% LBY 62647.74 74190.20 84.44%

CYP 1919.67 5439.96 35.29% LTU 10197.99 20182.60 50.53%

CZE

128156.00 154389.20

83.01% LUX 4945.79 52295.07 9.46%

DNK 34560.13 98802.10 34.98% LVA 2823.26 10564.49 26.72%

EGY 112.73

407137.67

0.03% OMN 8604.60 15665.87 54.93%

EST 5103.07 7576.29 67.36% POL

290786.08 390329.98

74.50%

FIN 13731.12 47465.64 28.93% PRT

307833.95 1206630.5

25.51%

GBR

819553.47 1822898.90

44.96% SAU

148308.41 339048.62

43.74%

GRC 21400.30 101372.99 21.11% SWE

124708.36 134182.28

92.94%

HRV 19141.75 43495.10 44.01% TUN

110003.16 157639.52

69.78%

HUN 32175.81

102990.05

31.24% USA

1493148.111569362.01

95.14%

IRL 81596.83

200864.59

40.62% DEU

977399.41 2265120.77

43.15%

Source: Author’s calculations using estimates

According to this table, which groups together the

various countries with which Morocco has an export

trade potential of less than 100%, we can see that

Morocco exploits its full trade potential just with 13

countries in our sample of 43 countries, namely:

Bulgaria, Spain, Algeria, Malta, France, Jordan,

Lebanon, Netherlands, Qatar, Romania, Slovenia,

Sweden and Turkey.

The rest of the countries in the table with which

Morocco has a trade potential of less than 100 percent

can be subdivided into two categories: the one with

which Morocco has a high trade potential, which

includes 14 countries, including Denmark, and

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Germany, Egypt, Greece, Libya, and Portugal, and

one that brings together countries with which there is

a potential greater than 50% including: Austria,

Belgium, Kuwait, Tunisia and USA.

On average, we note that Morocco does not

manage to exploit all the potentialities of possible

exploitation with its partners within the framework of

the Free Trade Agreements, with an average trade

potential of the whole sample of 95%, which does not

exceed 100%. However, when analyzing in

individual terms, Morocco should focus more on

those countries with which it benefits from a partially

exploited trade potential.

The key to maximizing the trade potential that

exists between Morocco and the countries with which

it has signed FTAs is to first address the

competitiveness of Moroccan products vis-à-vis

products supplied by other developing countries such

as China, Turkey, and India. As already mentioned

above, to increase competitiveness, Morocco must

focus on simplifying customs and administrative

procedures in parallel with technical progress and

production processes.

It is also essential to strengthen the negotiating

team in the administrations. Especially when

negotiating with large nations, negotiators must have

the capacity to defend national interests. Transport

infrastructure is also a component that requires

development by Morocco.

6 CONCLUSIONS

The consolidation of trade relations between

Morocco and the rest of the world, in order to

integrate into the globalization process in an effective

manner, requires first and foremost the

implementation of reforms and sound and efficient

trade policies at the regional and global levels. The

results of the analysis of trade relations between

Morocco and the countries of the African continent

on the one hand and Morocco and the countries with

which it has signed free trade agreements on the

other, have shown the existence of a more or less

remarkable trade potential in both cases. Analyzing in

terms of Morocco's individual trade potential with

each group of partners, we find that:

The kingdom manages to exploit its full trade

potential with 70% of the African partner countries in

our sample. This result is satisfactory and shows that

Morocco manages to benefit effectively from the

relations consolidated with the African continent in

recent decades.

On the other hand, within the framework of free

trade agreements, Morocco has a trade potential with

32 countries. This result is not surprising and reveals

the weakness of relations between Morocco and these

partners. In fact, based on a logic based on the

Kingdom's trade balance, it can be seen that out of all

the countries with which it is linked by free trade

agreements, it records a trade deficit except with

Jordan.

These observations show that the Kingdom's trade

relations with its partners (from the African continent

and especially the countries with which it has signed

free trade agreements) can be pushed beyond their

current levels by focusing especially on economies

whose potential is not fully exploited.

In order to benefit from this trade potential,

Morocco must address several problems to increase

its international competitiveness, notably through the

substantial reduction of tariff and especially non-

tariff barriers (the presence of complex customs and

administrative procedures and regulations, inefficient

and costly transport systems, differences in rules of

origin and product and transport standards) in order

to significantly boost exports. Indeed, these problems

are very often identified as major barriers to

sustainable growth in Morocco's trade. The reduction

of these barriers will have to go hand in hand with the

development of a competitive and harmonized

business ecosystem to facilitate trade, as well as a

focus on the development of an integrated transport

infrastructure scheme to reduce transaction costs over

time.

ACKNOWLEDGEMENTS

Authors would like to thank the National Center for

Scientific Research (CNRST) of Morocco for its

support for this research through the excellence

scholarship.

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APPENDIX

Annexe 1: Code and name of the countries of the 2 samples.

FTAs Africa

Country Name

Country

Code

Country

Code Country Name

United Arab

Emirates ARE AGO Angola

Austria AUT BDI Burundi

Belgium BEL BEN Benin

Bulgaria BGR BFA Burkina Faso

Bahrain BHR CAF African Republic

Cyprus CYP CIV Côte d'Ivoire

Czech Republic CZE CMR Cameroon

Denmark DNK COD

Congo, Democratic

Republic of the

Algeria DZA COG Congo, Republic of the

Egypt, Arab

Republic of EGY COM Comoros

Spain ESP CPV Cabo Verde

Estonia EST DZA Algeria

Finland FIN EGY Egypt, Arab Republic of

France FRA ETH Ethiopia

United Kingdom GBR GAB Gabon

Greece GRC GHA Ghana

Croatia HRV GIN Guinea

Hungary HUN GMB Gambia

Ireland IRL GNB Guinea-Bissau

Iraq IRQ GNQ Equatorial Guinea

Italy ITA KEN Kenya

Jordan JOR LBR Liberia

Kuwait KWT LBY Libya

Lebanon LBN MDG Madagascar

Libya LBY MLI Mali

Lithuania LTU MOZ Mozambique

Luxembourg LUX MRT Mauritania

Latvia LVA MWI Malawi

Malta MLT NAM Namibia

Netherlands NLD NER Niger

Oman OMN NGA Nigeria

Poland POL RWA Rwanda

Portugal PRT SEN Senegal

Qatar QAT SLE Sierra Leone

Romania ROU SWZ Eswatini

Russian Federation RUS SYC Seychelles

Saudi Arabia SAU TCD Chad

Slovenia SVN TGO Togo

Sweden SWE TUN Tunisia

Tunisia TUN TZA Tanzania

Turkey TUR UGA Uganda

USA USA ZAF South Africa

Allemagne DEU ZMB Zambia

ZWE Zimbabwe

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