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Morocco's free trade agreements boost industry but leave smallholder farmers behind

Thanks to its free trade policy, Morocco has undeniably become the economic bridge between Europe and Africa. While the results of this approach are well illustrated in the industrial sector, the contrasts they reveal in agriculture raise questions about the local distribution of these benefits.

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Morocco's free trade agreements boost industry but leave smallholder farmers behind
DR

In an in-depth analysis of Morocco's free trade agreements (FTAs) with major regional economic partners, the Friedrich Naumann Foundation recently assessed the local impact of this economic strategy on key sectors. The findings reveal that with over 54 treaties spanning Europe, Africa, and the Americas, these agreements have become pivotal in driving foreign investment and industrial modernization in Morocco.

However, the foundation warns that this openness can be a double-edged sword. While urban industrial zones have thrived, rural areas have not reaped the same benefits. Since Morocco's initial steps towards a free trade zone with the European Union in 2000, the commercial impact has been significant.

A Success for Industrial Trade

According to the Office des Changes, the share of trade in GDP surged from about 59% in 2000 to nearly 79% in 2019. The kingdom has emerged as a strategic automotive hub, exemplified by the Renault-Nissan factory in Tangier. Since its inception in 2012, the factory now produces 400,000 vehicles annually, elevating automotive exports from $300 million to $14.2 billion.

With a significant economic zone like Tangier-Med, the industry employs 220,000 workers and accounts for 22% of exports. This openness has also boosted the agri-food sector, particularly in regions like Souss-Massa, Larache, and Kenitra.

Yet, the economic success of the FTAs highlights disparities between major hubs and interior regions. «On one hand, agri-food giants dominate the majority of exports. On the other, smallholder farmers like Lalla Fadma—who make up 80% of the Moroccan agricultural workforce—remain marginalized», the Foundation notes, emphasizing that «the divide within the agricultural sector is widening».

This economic growth is largely concentrated in coastal areas. Despite increased agricultural exports, the growth is mainly driven by large agro-industrial groups in irrigated regions like Souss-Massa and Dakhla-Oued Eddahab.

«However, for the 1.4 million smallholder farmers in Morocco, many located in isolated, mountainous, or semi-arid regions such as Béni Mellal-Khénifra or Azilal, they remain excluded from these export circuits due to a lack of necessary infrastructure», the article notes.

Inclusive Trade for Better Territorial Impact

These structural exclusions raise critical questions about enhancing local capacities to support Morocco's FTA-driven trade strategy. They underscore a «lack of inclusive national policies to support these regions», which has «widened regional disparities instead of bridging them».

For instance, the article highlights that three-quarters of Moroccan farms are less than 5 hectares, «making economies of scale nearly impossible». The United Nations Food and Agriculture Organization (FAO) notes that «only 12% of smallholders have access to refrigerated transport, resulting in post-harvest losses of up to 30%».

Viewed through this lens, the geographical concentration of trade advantages underscores the importance of infrastructure, such as logistics corridors and export financing. According to the foundation, these elements are crucial «in determining the beneficiaries of free trade agreements», especially as only 37% of Moroccan companies eligible for FTAs utilize them, «mainly due to bureaucratic and logistical challenges».

To address these disparities, the article specifically recommends «simplifying and centralizing trade governance to enhance accessibility». Rather than blanket subsidy programs, it advocates for «targeted aid and support for smallholder farmers».

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