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EU-Moroccan agricultural trade deal running into trouble in European Parliament

In September 2010 the European Commission forwarded a draft agreement on further reciprocal liberalisation of agricultural trade with Morocco to the Council and the Parliament, and ultimately the member states, for approval. This draft agreement has nothing to do with responding to the Arab Spring, although its ratification now takes place in that context.

The agreement springs from the authorisation given by the EU Council in 2005 to open negotiations under the 2000 Euro-Mediterranean Agreement which provides that the Union and Morocco will gradually implement greater liberalisation of their reciprocal trade in agricultural products, processed agricultural products and fishery products. The negotiations were concluded in December 2009 and the Commission forwarded the agreement for approval in September 2010 with the hope that it would come into effect in 2011. The agreement is in line with the Barcelona Process and the European Neighbourhood Policy.

However, the agreement has run into opposition in the Parliament from a mixture of motives, including foreign policy issues related to Morocco’s claim over Western Sahara and traditional agricultural opposition to further trade liberalisation, strengthened on this occasion by the after-effects of the e.coli outbreak in Germany which led to severe losses for Spanish vegetable producers.

The European Parliament’s Opinion will be formulated by its International Trade Committee which has chosen José Bové as its rapporteur who has already made clear his opposition to the agreement. In February this year, the Trade Committee decided to delay the ratification process because of legal uncertainties over how the agreement would apply in the Western Sahara and whether it would benefit the people there. Morocco currently occupies the territory of Western Sahara despite many UN resolutions calling for self-determination for the people living there. According to Western Sahara Resource Watch, both the USA and EFTA states have explicitly excluded Western Sahara from the scope of their FTAs with Morocco.

Earlier this month, the Agricultural Committee passed on its opinion to reject the agreement to the Trade Committee. The Opinion, drafted by rapporteur Lorenzo Fontana, highlighted the risks of negative consequences for Community regions specialised in vegetable production. It argued, although without providing any evidence, that high Community standards in environmental protection, working conditions, trade union protection, anti-dumping rules and food safety are not reciprocated in Moroccan products imported into the EU (it is worth observing that the major exporters are EurepGAP certified and are required to meet demanding supermarket standards). It noted that protection of GIs has been put off for further negotiations. It underlined that labour cost differentials between the EU and Morocco led to serious competitiveness problems for EU producers, not least in a context where quota increases have already been agreed for other Mediterranean exporters.

The agreement would allow the EU immediate duty-free access to Morocco for 45% of its agri-food exports, rising to 70% over ten years. In return, Morocco would be given immediate duty-free access for 55% of its agri-food exports to the EU, plus improved tariff rate quotas for some of its remaining fruit and vegetable exports. In the case of tomatoes, a key sensitive product, the volume of preferential exports would be increased from 233,000 to 285,000 tonnes over four years, although Morocco would still have to observe calendar periods and the EU entry price system (though with a preferential entry price which gives additional rents on these preferential imports).

Three observations can be made. The first is that the EU has a huge interest in encouraging economic development and employment creation in North Africa – some estimates suggest that up to 40% of people in Morocco between 15 and 34 years of age are unemployed. Lowering EU barriers to trade with Morocco will make a positive contribution to this goal.

Second, the unresolved status of Western Sahara is clearly unsatisfactory and the EU needs to encourage a solution to this problem – not least, it has led to the border between Algeria and Morocco becoming one of the world’s most hermetically sealed which itself frustrates the operation of the Barcelona process. The use of trade agreements to pursue foreign policy and human rights goals can be defended in particular circumstances, but it can be a self-destructive weapon that should only be used in extreme circumstances. The EU has other means of making its views known to the Moroccan authorities and, on balance, now is probably not the time to refuse to ratify this trade agreement on foreign policy and human rights grounds.

This leaves the third issue of the additional competition for southern European vegetable producers. It is clear that Morocco has an advantage in low labour costs and the absence of social benefits – this is the nature of a less developed economy. We cannot demand that Morocco improve its labour conditions without providing it with the means to raise its productivity to support these better conditions by selling goods and services where it has a cost advantage.

Insofar as the benefits from increased trade accrue to the Union as a whole, while the costs of adjustment are borne by particular farm groups in southern Europe, there is a case for transitional support to those farmers adversely affected. There is a role for the EU’s Globalisation Fund here to support job creation and training in areas likely to be damaged by increased exports from across the Mediterranean. With that proviso, the Parliament should support the trade agreement when it comes to a vote later this year.

Photograph courtesy of www.freshplaza.com

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