Address on U.S.-Morocco Trade Relations

Introduction

It is an honor to address this group of distinguished guests and business leaders. I want to thank Minister Alami and a special thanks to the U.S. Chamber for hosting this event. This is an exciting time for Morocco as it begins entry into the Free Trade Agreement. One of my earliest assignments was as an officer at our Embassy in Rabat. I have fond memories of drinking tea, and negotiating with the merchants … and am very confident that the businessmen, as well at the government officials here today, and the Moroccan people will meet this new challenge. In fact, I want to warn some of you here that these merchants have prospered and honed their negotiating skills at the crossroads of Europe, Africa and the Middle East for centuries and will give you a run for your money!

Morocco has been an anchor in the region and a strong friend of the United States. Our countries have had a long history of friendly relations. Morocco was one of the first states to seek diplomatic relations with America. In December 1777, Sultan Sidi Muhammad Ben Abdullah issued a declaration announcing that all vessels sailing under the American flag could freely enter Moroccan ports. By issuing this declaration, Morocco became one of the first states to acknowledge publicly the independence of the American Republic.

We are here today to discuss another historic event between our countries -- the entry into force for U.S.-Morocco Free Trade Agreement. We understand that Free Trade Agreements -- like the one we are celebrating today -- encourage the creation of employment opportunities, the transfer of technology, expanded manpower skills and training, and increased foreign direct investment.

Citizens of developing countries in the Middle East have a growing stake in the global economy because of greater economic openness and the rapid acceleration of technological change. However, despite significant concentrations of wealth in some countries, the benefits of globalization have largely bypassed much of the broader Middle East. Successive UN Arab Human Development Reports have made clear that for many in the broader Middle East, economic prosperity is still largely a dream. The United States is committed to helping bridge this divide by deploying its resources to assist the countries of the Middle East in their efforts to develop the institutional and legal frameworks, business skills and human capital, and other resources that will enable them to effectively harness the power of globalization and free trade.

We also shouldn’t forget that economic reform is a means of attaining political reform. They are inherently linked. A powerful and vital way to support political freedom and social opportunity is by generating economic opportunity that helps people build better futures for themselves. The Middle East Free Trade Area -- or MEFTA -- is one of the vehicles that President Bush envisions will generate prosperity throughout the region. I will leave those details to my friend AUSTR Shaun Donnelly. The State Department is working in tandem with the MEFTA through many programs and initiatives to support economic opportunities in Morocco.

Middle East Partnership Initiative

The State Department’s Middle East Partnership Initiative (MEPI) was created to in 2002 to bolster indigenous reform in the Middle East. In the last couple of years, MEPI has funded many economic programs in Morocco including:

FTA Support: MEPI provided funds to identify the changes required in Moroccan laws and regulations to bring it into compliance with its obligations under the FTA. It also supported a variety of classroom and on-the-job technical assistance programs:

• participation in an IPR Enforcement Academy in Washington;
• prosecutorial training on IPR issues; and
• implementation of an automated tracking system for Customs officials in Morocco.

Trade Support. In anticipation of the FTA implementation, MEPI helped Moroccan businesses identify market opportunities in the United States.

Partnership for Financial Excellence. The Financial Service Volunteer Corps with the help of MEPI funding has set up an office and is conducting a series of workshops with the commercial banking sector to improve risk management and SME access to finance; with the Central Bank to modernize commercial bank supervision and regulation; and with the Casablanca stock market to improve operations and pension fund management.

Entrepreneur programs. Morocco has sent a large number of participants to the "Meet U.S." program, which stands for "Middle East Entrepreneur Training in the U.S.", as well as the Business Internship Program. We are pleased that many of the "Meet U.S." participants from Morocco have been women. There have also been two Moroccan participants in the Business Internship Program -- one at Frito-Lay in Plano, Texas and a second at Procter & Gamble in Cincinnati, Ohio. An Entrepreneurship Center, which builds entrepreneurial skills through teaching, training, and hands-on mentorship with accomplished entrepreneurs is also slated to be established in Morocco.

MEPI Small Grants. MEPI has directly funded initiatives by Moroccan NGOs and civil society organizations that support Morocco's economic reform efforts, including the U.S.- Morocco FTA Website which was part of a public-private, Moroccan-U.S. partnership outreach effort to educate both U.S. and Moroccan businesses about the bilateral free trade agreement (FTA).

USAID

In 2005, USAID provided over $25 million in foreign assistance to Morocco, with 43 percent devoted to trade capacity building to help Morocco take full advantage of the opportunities of the more liberalized trading environment the FTA will provide. The remaining funds supported education, and democracy and governance programs to help build human capital and institutions that will enable Morocco to sustain economic growth over the long term.

MENA Investment Initiative

We have been doing other things that help strengthen Morocco’s economy. The State Department leads USG government efforts to enhance investment climates in the Middle East and North Africa, including through the OECD’s Middle East and North Africa (MENA) Investment Initiative. We welcome Morocco's strong participation in that initiative, and its submission of an investment reform plan as part of that process.

Millennium Challenge Corporation

The Millennium Challenge Account (MCA) is another way we are working to promote economic development. Morocco was among 23 countries selected as eligible to apply for Millennium Challenge Account funds in 2006 and is currently working to complete its agreement or compact with the United States. Secretary Rice chairs the Millennium Challenge Corporation which channels MCA funds to developing countries whose governments demonstrate a strong commitment to ruling justly, investing in people, and encouraging economic freedom. On his first foreign trip as the MCC’s new CEO, John Danilovich visited Morocco a few weeks ago and met with senior government officials and members of civil society and the private sector. He was impressed by the grass roots involvement; MCC places a high priority on country "ownership" and efforts to achieve measurable results to reduce poverty through economic growth. MCC looks forward to working with Morocco to achieve these goals.

Business Facilitation and Investment Fund

The State Department’s Business Facilitation and Investment Fund (or BFIF) provides grants to posts to promote commercial and business opportunities in countries such as Morocco that present clear strategic opportunities. BFIF funds have been provided to Embassy Rabat to support and promote the FTA to the Moroccan and American business communities. In 2004, BFIF along with the MEPI, partnered with American Chamber of Commerce to create an FTA website that recorded 1.25 million hits in its first year and is still going strong. You should go there too and learn how your company can benefit from the FTA! Last year, BFIF funds allowed the U.S. Embassy in Rabat to participate in an investment promotion tour of the United States. This year we are again teaming up with the American Chamber of Commerce in Morocco on further promotion activities.

Moving Forward

The hard work of translating the FTA into an economic success story for Morocco depends not only on policy-makers like me or Minister Alami… sad as that may be … or even great programs like MEPI, MCA or BFIF. It depends, in the end, on the many people in this room such as our business sponsors for today’s meeting, Boeing and CMS -- and their efforts to sell their products and services and establish businesses in Morocco.

While you have heard from Boeing and CMS, let me mention how just a few other U.S. companies are already taking advantage of the excellent opportunities that exist in Morocco. Fruit of the Loom has invested over $150 million in the textile sector and International Paper invested a similar amount in the agribusiness. Minco, a U.S. electronics company, is investing $1 million and creating as many as four hundred jobs in Casablanca. The benefits are not one-sided, though; many Moroccan companies and entrepreneurs have been positioning their products to take advantage of the U.S. market, manufacturing products like leather goods, marble sinks, palm leaf baskets, and children’s clothing. Since entry into the FTA, a Moroccan frozen fruit and vegetable exporter has negotiated a $2.6 million export deal to the United States.

This is just the beginning … As economic growth increases not only in Morocco but also in Bahrain, Oman and Jordan, the vision of President Bush’s Middle East Free Trade Area begins to take hold in higher standards of living, better education, and greater opportunity for all of our citizens.

In this way, our nation’s foreign policy and our commercial interests are intricately tied together. U.S. businesses have and continue to demonstrate a commitment to expanding investment in, and trade with, our friends and allies in the Middle East and around the world. In doing so, the U.S. business community has played a key role in creating and sustaining long-term economic growth, job creation, and a better quality of life for all involved.

Conclusion

As I said earlier: A powerful and vital way to support political freedoms and social opportunities is by generating economic opportunities that help people build better futures for themselves. Morocco is at the crossroads of Africa, the Middle East and Europe, and our hope is that the Moroccan FTA will provide these opportunities for its own citizens and become an example to its neighbors.

Ambassadors, Ministers, special guests, business leaders -- thank you for the opportunity to join you today.