Morocco has just made an important announcement for the national economy. The Kingdom confirms that, from now on, new tariffs will be imposed on imports from Turkey. This is a new amendment agreed in October 2020 following a review of the treaty under the Free Trade Agreement (FTA) signed by the two countries.
From now on, the Alawi kingdom will officially impose new taxes on some Turkish products arriving in the country and entering its market. This new measure comes after years of complaints about trying to limit the trade deficit between the two nations and is finally becoming a reality. This update brings with it the introduction of tariffs on around 1,200 products of Turkish origin. These generally belong to certain economic sectors such as textiles, automobiles, metallurgy, wood and electricity.
The news was announced by Morocco's Administration of Aid and Indirect Taxes (ADII). The organisation issued legal document no. 6328/222 and made official the entry into force of this new update, which amends the Morocco-Turkey FTA.
It is expected that, over the next five years, if there are no changes and if it follows what has been established, the measure will be effective. It has also been announced that at the time of its termination, it will be renewable. Economic experts predict that customs duties on imports of some Turkish products will reach 90% of the value of the products.
This new measure has been welcomed by some economic experts. For some years now, they have been warning about the emerging problem with Turkish products. Many claim that the tariffs, in this way, weaken and put out of competition many of the country's businesses and minority shops.
This is the case of the Turkish shop chain Bim, which was heavily criticised in 2020. Many experts and traders in the field went so far as to claim that its presence poses a danger to small retailers, as it has more than 500 shops in Morocco alone and is the company's second largest shop network worldwide. Some even described the company's expansion as an invasion of Moroccan products.
This created a wave of criticism of the Moroccan administration. For many, the Moroccan brand was being left unprotected against imports from other countries, and this would seriously damage the economy. During this tide of discontent, the former Moroccan Trade Minister, Moulah Hafid Elalami, had to clarify the matter in order to alleviate the situation. According to him, his ministry would take a series of measures to protect local traders and businesses from the arrival of foreign multinationals.
The Morocco-Turkey Free Trade Agreement was made official in 2006, although the idea dates back to 2004, when documents were signed prior to its implementation. It is an agreement that has always sought to promote the expansion of trade and relations between the two countries, removing any obstacles in a harmonious manner and which will intensify mutual cooperation. This was established through equal conditions of competition for both parties.
Although at first it seemed to bring good benefits, over time Morocco has thought several times about breaking this contract with Turkey. Over the years, a trade deficit with Turkey of 1.2 billion dollars has emerged, and there has already been talk on several occasions of it not being beneficial for the Kingdom.
"We are ready to put an end to certain agreements that harm our economy and Morocco's interests," Elalamy said in 2018, when a trade deficit of 16 billion dirhams was obtained.
In 2020, the former minister already declared that negotiating the treaty with Turkey is one of Morocco's plans, as it is seriously affecting the national economy. With these new tariffs, it is hoped that the situation will be restored to the first years of the treaty and the relationship can be beneficial for both parties.