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Morocco: modernisation and progress through logistics

• The strategic position as regards Europe
• Agricultural tradition and industrial modernisation
• Foreign trade regime
• Commercialisation, the role of intermediaries
• Spain, Morocco's second trading partner
• The Moroccan freight forwarder
• Port of Barcelona, a hub port for Morocco's foreign trade

The strategic position as regards Europe

The Kingdom of Morocco is located in northwest Africa. It is a mere 12 kilometres from the Spanish coastline across the Strait of Gibraltar. The approximate area of the country is 710,850 km2, including the 252,120 km2 of the Western Sahara, which is not officially recognised as belonging to Morocco.

Agricultural tradition and industrial modernisation

The Moroccan economy is currently struggling with a relatively modern industrial and services sector and a very traditional agricultural sector linked to weather conditions, which have exist side by side. The macroeconomic data for 2003 showed that the Moroccan agriculture and fishing sector accounted for 15.7% of GDP, while the industrial sector represented 29.3% of GDP. The public sector generated 17% of GDP and services 38.1%, with the latter sector showing continuous albeit slow development, with trade and tourism particularly noteworthy.

Although the Moroccan economy has significant potential for growth, there are factors that make its development difficult, such as an economic structure which depends excessively on sectors such as agriculture; a very large submerged economy, which is very harmful to public finances (according to a study published by Moroccan Statistics Office, there are over a million companies working in the submerged economy); the fragility of the industrial sector, in which the textile industry predominates; a bloated public sector; a very low per capita income (1,320 $/year in 2003); a high rate of national poverty (19% in 2003); a small middle class (representing only 8.5% of the population); a young and growing population; the low skill levels of the active population (especially in rural areas): a high level of illiteracy (affecting 49.3% of the population aged over 15), and high structural unemployment, particularly among young people.

Foreign trade regime

Despite the liberalisation process begun with Morocco's joining of the GATT in 1987 and the WTO in 1994, and the entry in force of the EU-Morocco Agreement in March 2000, the Moroccan market is still very protected, especially as regards agricultural products and locally manufactured products. There are tariff barriers to imports, which range from a minimum of 2.5% to a maximum of 40%; there are also non-tariff barriers, such as the application of minimum or benchmark prices which limit EU exports; health and phytosanitary checks are required for numerous food products; health reasons are given to justify the prohibition of imports of certain products; and there remain administrative barriers, problems with the commercial legal system, a lack of protection of Intellectual Property and an obvious impact by the contraband market.

However, three important events have taken place in recent years which suggest some degree of liberalisation - the new conditions concerning agriculture in the EU-Morocco Partnership Agreement, which gives better conditions for the importation of food and agriculture products in both markets; the signing of the Agadir Agreement (in February 2004) which provides for the creation of a free trade area between Morocco, Egypt, Tunisia and Jordan (Lebanon has also expressed interest in joining); and the signing of the Agreement creating a free trade area between the United States and Morocco.

As regards the Euro-Mediterranean free trade area, Moroccan trading relations tend towards a Maghreb – Europe or north-south direction, which has great potential for growth if the Euro-Mediterranean free trade area planned for industrial goods in 2010 and the subsequent expansion of access to agricultural markets is taken into consideration.

Commercialisation, the role of intermediaries

Foreign companies selling their products in Morocco usually use a representative or importer-distributor. Personal contacts are extremely important. Representatives may work on a commission basis or as factory agents. Because of the difficulties involved in distribution in Morocco, many companies prefer to use an importer-distributor. The Spanish Commercial Office in Rabat and the Official Chambers of Commerce have lists of Moroccan companies seeking representatives. As well as the high tariffs to which most imported products are subject, there is also the large number of intermediaries in trade, which increases the end price for the consumer. But even more than the extreme length of the distribution circuit, the problem lies in its poor operation, which is characterised by opaqueness and the absence of competition. Wholesale distribution, especially in the food sector, is based on wholesale companies, that are often family businesses with minimal operating costs, which receive commissions of between 3 and 4%. The main companies are in Casablanca and other large cities. There are some products (cement, tobacco) that are sold by the State. Retail distribution, which is normally independent and not specialised, has very varied structures, although in rural areas rather than in the cities, small family shops in which almost everything can be found predominate. Recently, especially in Casablanca and Rabat especially and to a lesser extent, in Marrakech and other cities, larger outlets have begun to open, although at the moment they only account for between 5 and 8% of sales.

The Moroccan public sector has traditionally been the country's leading purchaser of goods and services and demand from it remains important, especially in the areas of infrastructure and public works.

Trade fairs and shows are held in Casablanca, and are generally organised by the Office des Foires et Expositions (OFEC).

Spain, Morocco's second trading partner

In 2003, Morocco's foreign trade was 19,805 million Euros, 1% more than in 2002 and the country had its traditional high trade deficit (imports account for around 60% of the total).

Two thirds of this trade takes place with Euro-Mediterranean countries, which with 13,602 million Euros are Morocco's leading trading partner. In specific terms, France is responsible for 25% of exchanges; the Mediterranean countries for another 25%, including Spain and Italy which together account for 21%; other EU (15) countries are responsible for the remaining 20%.

Spain is therefore Morocco's second supplier and client, after France. In 2003, trading links between Spain and Morocco accounted for 18% of Morocco's total foreign trade, or 3,475 million Euros, 13% more than in 2002, which continued the upward trend of recent years. Despite Morocco's trade deficit, its trading relations with Spain are quite balanced in terms of importation and exportation flows.

During the period January-October 2004, 36.1% of Spanish exports to Africa went to Morocco, a country which is a natural market for Spain due to its proximity and the complementary nature of their economies. Spanish exports to Morocco reflect the type of products that a country with an emerging economy needs. The entry into force of the EU-Morocco Association Agreement is benefiting Spanish companies, thanks to the elimination of gradual increase in tariffs which tax the importation of many products, especially industrial goods.

As far as Catalonia is concerned, the region accounts for 23% of these exchanges with 812 million Euros. It is therefore becoming consolidated as the leading region in exports to Morocco and increased by 10% compared to 2002. With the other areas in the Mediterranean region, they account for 50% of exchanges, and Madrid, with 9% of the trade, is in fourth position.

The Moroccan freight forwarder

There is at present no law specifically regulating the port sector, and as a consequence, the freight forwarder's role. The current regulation is based on a circular from the Merchant Marine Office, which is not legally enforceable.

Ahmed Zine has been president of the Association of Shipping Agents of Morocco in recent years, and held the post until very recently. An entrepreneur, he contributed to the modernisation of the Moroccan transport and logistics sector, first in his company and afterwards as President of the Association des Freight Forwarders du Maroc (AFFM), which was established in 1999.

Zine points out that "in 1999, transfers to or from Europe were prohibited, a decision which led to Morocco being less interesting for the multinationals”. Now it seems that this is beginning to change, thanks to initiatives like the Tanger-Med project, which Zine thinks "will be a completely different port from the other Moroccan ports; a port that can deal with new new 8,000 and 9,000 TEU container ships that will be operational in one or two years; a port ready for the major alliances between shipping companies that will take place in the near future. Tanger-Med is a unique opportunity for the new generations of Moroccan trade, logistics and maritime transport professionals”.

As far as Moroccan freight forwarders are concerned, Ahmed Zine feels that "in Morocco, like in France, the term "freight forwarder" is often confused with customs agents. Today, there are 15 companies in Morocco that want to work as pure freight forwarders, taking care of the process and documentary procedure that goods must follow from their source to their final destination. These companies, which account for 80% of the groupage that takes place in Morocco, are those that are members of the Association des Freight Forwarders du Maroc, and have passed a strict selection process in order that the AFFM becomes a FIATA member."

Port of Barcelona, a hub port for Morocco's foreign trade

The Port of Barcelona is currently linked by eight maritime lines with the main Moroccan ports (Tangiers and Casablanca), making it the main hub port for Morocco's foreign trade with the rest of Europe.

In 2003, the Port of Barcelona's traffic with Morocco exceeded 675,000 tonnes, 14% than the previous year. Exportation traffic accounted for 82% of the total. As regards container traffic, a total of 57,311 TEUs were exchanged with Morocco in 2003.

Editorial Staff

Port of Barcelona

	Ministry of Communications of Morocco
	Scheduled maritime groupage lines - Port of Barcelona
	Scheduled maritime lines from the Port of Barcelona
	Customer Service Department - Port of Barcelona