Wednesday, June 29, 2016

The Effect of Brexit on Morocco

If Britain eventually goes ahead and leaves the EU there will be implications for Morocco. The effect of Brexit, at the very least, will be the need to formulate new trade agreements and establish a new economic relationship with Great Britain

The relationship between the UK and Morocco has a long history. The UK is one of Morocco’s oldest partners with 803 years of diplomatic relations. UK links to Anglophone Africa and Morocco’s Francophone African links have created a platform for new business relationships over the years.

UK exports of goods to Morocco reached £573 million in 2014. Bilateral trade in goods and services is worth around £1.8 billion. Morocco's exports to Britain are estimated at 6.01 billion dirhams, while imports amounted to 7.99 billion dirhams at the end of 2015.

Top UK exports to Morocco include: mineral fuels, mineral oils and products of their distillation, vehicles (other than railway), iron and steel nuclear reactors, boilers, machinery and mechanical appliances, electrical machinery and equipment, aircraft, man-made staple fibres, knitted or crocheted fabrics, instruments and apparatus, beverages, vinegar and spirits.

In return, Morocco exports a variety of products to the UK including food, beverages, tobacco, crude materials and fuel, chemicals and related products, manufactured goods, machinery and transport equipment.

The UK is Morocco's 7th biggest customer, 15th biggest supplier and among the top 6 foreign investors in the kingdom. Morocco entered into a bilateral Free Trade Agreement with the US in 2006 and an Advanced Status agreement with the EU in 2008.

London Stock Exchange welcomes Moroccan delegates 

The impact on trade between Morocco and Britain will be most felt with the imposition of customs duties and in the opinion of the President of the Moroccan Institute of International Relations (IMRI), Jawad Kerdoudi, there will be an initial decline in trade.

"In principle there will be the issue of customs duties between Morocco and Great Britain and therefore it is feared some decline in trade between the two countries," Mr. Kerdoudi said. He suggested that Britain should start negotiations with several countries, including Morocco, in order to sign free trade agreements to restore exemptions from customs duties. A process, he points out, that may take some time.

The question also arises as to where Morocco sits among the priorities of the UK.

If Britain's exit from the EU causes economic decline in Europe, European demand for Moroccan goods will also decline.

Economist Omar Kettani says that after the exit of Britain from the EU, Morocco must renegotiate free trade agreements not just with Britain but also with the EU. "Morocco should have an open vision and be able to negotiate win-win agreements, especially since Britain will be a country free of European restrictions," says Kettani.

Uncertainties about the economic and political future of Europe will have repercussions on the relationship between the EU and Morocco. However, Morocco will retain its important role with the EU in relationship to anti-terrorism and security cooperation.

The chief of the Bank Al Maghrib, Abdellatif Jouahri, has downplayed the effect on the Moroccan economy of a possible exit from Britain to the EU, calling it "limited". "The exit of Britain from the EU will certainly effect Europe, but will not impact the Moroccan economy more than 0.1 points," he declared during a press conference after the second quarterly meeting of this year the Council of the Central Bank.

Former British Ambassador to Morocco Clive Alderton and his family at the Fez Festival

Undoubtably Morocco and the UK will forge new ties. Back in 2014, the then UK Ambassador to Morocco, Clive Alderton, summed up the relationship succinctly when he said "The Morocco/UK relationship has come a long way in its 800 year old history. That is no surprise: as Monarchies, we are used to planning for the very long term. While the rapid pace of change in the 21st Century imposes new risks and challenges, it also offers vast new opportunities. We have overhauled our relationship to ensure it is fit for purpose to meet these challenges, rediscovering old friendships and making new ones along the way.”

To which one can only say, "InshAllah".


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