Morocco–United States Free Trade Agreement Overview

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The Morocco–United States Free Trade Agreement is a significant trade deal between the two countries. It was signed on June 15, 2004, and entered into force on January 1, 2006.

The agreement aims to eliminate tariffs and other trade barriers between the two countries. It also facilitates trade in services, investment, and intellectual property.

The agreement has been beneficial for American businesses, with exports to Morocco increasing by over 50% since its implementation.

FTA Basics

The Morocco–United States Free Trade Agreement (FTA) is a significant trade agreement between the two countries. It was signed on June 15, 2004, and entered into force on January 1, 2006.

The FTA aims to eliminate tariffs and other trade barriers between the two countries, increasing trade and investment. This includes reducing tariffs on goods such as textiles, agricultural products, and manufactured goods.

By reducing tariffs, the FTA has helped increase trade between the two countries, with Morocco's exports to the US growing from $1.4 billion in 2004 to $4.5 billion in 2019.

FTA

Explore the ancient ruins of Taza, Morocco with this stunning outdoor photograph.
Credit: pexels.com, Explore the ancient ruins of Taza, Morocco with this stunning outdoor photograph.

The rules of origin under the U.S.-Morocco FTA are straightforward: a good must be wholly obtained or produced in the territory of Morocco or the United States, or both, to qualify as originating.

To determine if a material originates, the producer typically relies on a certification or affidavit from the supplier. If the supplier won't provide this documentation, the producer should consider the material non-originating.

The importer is responsible for making a preference claim, which certifies that the good meets the terms of the agreement and that the necessary documentation will be provided upon request. Failure to do so may result in penalties if the good is found not to originate.

A tariff shift is required for non-originating materials used to produce a good, except for small de minimis values. This is specified in General Note 27(h).

The U.S.-Morocco FTA does not provide for Tariff Rate Quotas.

Morocco

Morocco has a comprehensive Free Trade Agreement (FTA) with the United States that entered into force in 2006, making it the only U.S. FTA on the African continent.

Person Taking Care of Donkey at Farmers Market in Marrakech, Morocco
Credit: pexels.com, Person Taking Care of Donkey at Farmers Market in Marrakech, Morocco

This agreement includes chapters on intellectual property rights, labor, and environmental protection, and requires Morocco to make its business environment more transparent and open to international companies.

The U.S.-Morocco FTA also prohibits bribery and grants protection to whistle-blowers, ensuring a secure working environment for international companies.

Morocco has FTAs with several countries, including Egypt, Jordan, Tunisia, Turkey, and the United Arab Emirates, and has advanced trade status with the European Union.

The EU-Morocco Association Agreement, which entered into force in 2000, provides duty-free access for limited quantities of some agricultural products, especially seafood products, fruits, and vegetables.

Morocco began FTA negotiations with Canada and several West African states, and has also applied to join the Economic Community of West African States (ECOWAS) and the African Continental Free Trade Area (CFTA).

Rules and Procedures

To make a preference claim under the U.S.-Morocco FTA, an importer must preface the tariff item on the entry summary with the Special Program Indicator “BH” (19 CFR 10.763) or file a PEA/PSC claim within one year of importation.

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The importer should provide a Declaration to CBP if the U.S.-Morocco FTA claim is based on the exporter's or producer's Declaration. This Declaration should include all the data elements in 19 CFR 10.764.

Although there is no official Declaration form or format required under the U.S.-Morocco FTA, a free-form Declaration with all the data elements may also be made. This can be done by the exporter or producer.

An exporter or producer Declaration signed after the date of the preference claim cannot have been in the importer's possession at the time of such claim. However, if the preference claim is based on importer's knowledge, no exporter/producer certification is required.

Tariff and Quotas

The Tariff and Quotas section of the Morocco–United States Free Trade Agreement is relatively straightforward. Morocco quotas ended January 1, 2015.

One important thing to note is that the U.S.-Morocco FTA does not provide for Tariff Rate Quotas.

Tariff Rate Quota Goods

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The U.S.-Morocco FTA does not provide for Tariff Rate Quotas. Morocco quotas ended January 1, 2015.

Tariff Rate Quotas are not a feature of the U.S.-Morocco FTA.

In fact, the U.S.-Morocco FTA does not offer any Tariff Rate Quotas at all.

Does FTA Include Tariff Rate Quotas?

FTA agreements can be complex, but let's break it down. The U.S.-Morocco FTA does not provide for Tariff Rate Quotas. Morocco quotas ended January 1, 2015.

This means that if you're importing goods from Morocco, you won't have to worry about quotas. However, it's essential to understand the rules and regulations surrounding FTAs.

The U.S.-Morocco FTA requires importers to make a preference claim in a specific way. A U.S.-Morocco FTA claim is made by prefacing the tariff item on the entry summary with the Special Program Indicator “BH” (19 CFR 10.763) or by filing a PEA/PSC claim within one year of importation.

If you're planning to import goods from Morocco, it's crucial to follow these steps to avoid any issues.

U.S. Goods Returned

Beautiful tranquil beach in Morocco with turquoise water and clear horizon, perfect for a relaxing summer vacation.
Credit: pexels.com, Beautiful tranquil beach in Morocco with turquoise water and clear horizon, perfect for a relaxing summer vacation.

U.S. Goods Returned can be a tricky topic, but I've got the lowdown for you. U.S. goods returned cannot be claimed under the U.S.-Morocco FTA.

If you're shipping goods back to the U.S. from Morocco, you might be wondering if you can get a break on duties. Goods returned from Morocco are exempt from duty under HTSUS 9801.00.10.

This can be a big help if you're dealing with returns or overstock. Just make sure to follow the proper procedures to take advantage of this exemption.

Benefits and Exemptions

The USMFTA has brought numerous benefits to the Moroccan economy, including access to the large and rich US market, which has led to an inflow of US direct investment and the creation of a much-needed infrastructure.

Over 92 US companies, including 3M, American Express, and Caterpillar, have opened for business in Morocco, creating job opportunities and boosting domestic employment.

The agreement has also enabled Moroccan firms to expand into new high-tech manufacturing sectors, such as automotive and aeronautics parts, as well as electronics.

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This diversification of the economy has contributed to a steady increase in bilateral trade, with US-Morocco trade in goods and services growing to nearly $7 billion annually.

The US-Morocco FTA has also facilitated foreign direct investment, with investments in various sectors, including manufacturing, tourism, and renewable energy, creating jobs and developing the skills of the Moroccan workforce.

Benefits of USMFTA

The USMFTA has opened doors for US companies to establish themselves in Morocco, with 92 US companies, 12 franchises, 9 liaison offices, and 22 NGO's schools, and USAID contractors already operating in the country.

One of the most significant benefits of the USMFTA is access to the large and rich US market, which has already led to an inflow of US direct investment into Morocco.

This investment has helped build up a much-needed infrastructure in Morocco, creating job opportunities and boosting domestic employment. The automotive industry is a great example of this, with major companies like Yazaki, Delphi Technologies, Schlemmer, and Lear Corporation establishing operations in Morocco, creating thousands of jobs and generating over $10 billion in revenue.

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The USMFTA has also encouraged Moroccan firms to expand into new high-tech manufacturing, such as automotive and aeronautics parts, and electronics, contributing to a steady increase in bilateral trade between the two countries.

US-Morocco trade in goods and services has grown to nearly $7 billion annually, reflecting a deepening of economic ties between the two countries.

The USMFTA has also provided a framework that infused confidence in US and EU investors, leading to an inflow of investment in various sectors, including manufacturing, tourism, and renewable energy.

These investments have created jobs and developed the skills of the Moroccan workforce, positioning Morocco as a regional hub for automotive parts manufacturing and a global leader in the green energy industry.

Claiming Preferential Tariff Treatment

To claim preferential tariff treatment under the US-Morocco FTA, you need to make a preference claim on the entry summary with the Special Program Indicator "BH" (19 CFR 10.763) or file a PEA/PSC claim within one year of importation.

Lush green valleys and rugged cliffs in Akchour, Morocco show stunning natural beauty.
Credit: pexels.com, Lush green valleys and rugged cliffs in Akchour, Morocco show stunning natural beauty.

Importers must attest that the good is eligible for US-Morocco FTA preference and accept responsibility for the truthfulness and accuracy of the claim, as well as provide certification of origin and supporting documentation to CBP upon request.

You can make a post-importation preference claim using a 19 USC 1520(d) declaration, but be aware that you'll be attesting to the good's eligibility and accepting responsibility for the truthfulness of the claim.

Indirect materials are disregarded in determining whether a good qualifies as an originating good under the US-Morocco FTA, except that their cost may be included in meeting the value-content requirement.

Morocco no longer has Tariff Rate Quotas, a provision that ended on January 1, 2015.

FTA Preference Claim for Importers

To make a preference claim under the U.S.-Morocco FTA, you need to preface the tariff item on the entry summary with the Special Program Indicator "BH" (19 CFR 10.763) or file a PEA/PSC claim within one year of importation.

Credit: youtube.com, Qualify for Free Trade Agreement (FTA) Tariff Preference Metadata and Keywords

You can't use the fungible goods and material provision for the Morocco FTA, as there is no such provision.

By making a U.S.-Morocco FTA preference claim, you're attesting that the good is eligible for U.S.-Morocco FTA preference and accepting responsibility for the truthfulness and accuracy of the claim.

You'll need to provide certification of origin and supporting documentation to CBP upon request, as stated in 19 CFR 10.765.

Origin and Materials

To determine if a good originates under the Morocco–United States Free Trade Agreement (FTA), it must meet a rule of origin and all other requirements. This can be a bit complex, but essentially, a good is an originating good if it is imported directly from one party into the other, and meets certain criteria.

A good is considered originating if it is wholly the growth, product, or manufacture of one or both parties, or if it is a new or different article of commerce that has been grown, produced, or manufactured in the territory of one or both parties.

Credit: youtube.com, The Morocco-US free trade agreement (FTA)

For goods other than those covered by Annex 4-A or 5-A, the good must have a sum of the value of materials produced in the territory of one or both parties, plus the direct costs of processing operations performed in the territory of one or both parties, that is not less than 35 percent of the appraised value of the good at the time it is imported.

Indirect materials are to be disregarded in determining whether a good qualifies as an originating good, except that the cost of such indirect materials may be included in meeting the value-content requirement.

Here are some key terms related to origin and materials under the Morocco–United States FTA:

  • Accumulation: allows the producer to reduce the value of non-originating materials used in the production of the good.
  • De Minimis: allows the exporter to disregard a very small percentage of non-originating materials that do not meet a tariff shift rule.
  • Direct Shipment: goods that must be shipped directly from one FTA party to another FTA party.
  • Fungible Goods and Materials: goods or materials (components) that are interchangeable for commercial purposes and whose properties are essentially identical.
  • Indirect Materials: goods used in the production, testing or inspection of a good but not physically incorporated into the good.

Frequently Asked Questions

Is Morocco duty free to the USA?

Morocco is mostly duty-free to the USA, with most goods entering the country free of charge since 2006, and all goods expected to be duty-free by 2023.

What is the trade between USA and Morocco?

The trade between the USA and Morocco was estimated at $7.2 billion in 2024, with a significant increase in U.S. goods exports to Morocco. The majority of this trade consisted of U.S. goods exports valued at $5.3 billion, a 37.3% increase from 2023.

Clara Donnelly

Writer

Clara Donnelly is a versatile writer with a passion for crafting engaging content across various industries. With a keen eye for detail and a knack for storytelling, she brings complex topics to life through her writing. Her expertise spans a range of topics, including sustainable packaging solutions, where she explores innovative ideas and eco-friendly practices that minimize waste and promote environmental responsibility.

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