GENEVA — The many free trade agreements concluded by Morocco have helped boost the country’s exports, including apparel, in key markets such as the European Union and U.S., a World Trade Organization report said.
Morocco’s textile and apparel sector has also benefited from exemptions from direct or indirect import duties and favorable corporate tax terms for production based in export processing zones.
The apparel industry is one of the main sectors to benefit from the “export free-zone regime,” said the report on Morocco’s trade regime, which was used as the reference document for a two-day review by WTO trading partners that concluded on Thursday.
The apparel sector, notes the report, benefits from “the opportunities for refunding, by way of drawback, of the duties and taxes on the energy consumed in producing goods for export.”
The review also noted that domestic or foreign companies based in an export free zone are exempt from corporate tax for five years, and afterward are subject to a reduced rate of 8.75 percent for the next “20 consecutive fiscal years.”
Morocco’s apparel exports to the EU, which all entered duty-free, amounted to $2.7 billion in 2014, and export shipments to the U.S. reached $135 million, up from $56.1 million in 2005 prior to the establishment of the FTA in 2006, with women’s trousers and women’s and girls’ blouses, shirts, dresses, jackets and T-shirts among the main exports.
Overall, apparel shipments accounted for a 13.8 percent share of Morocco’s total merchandise exports of $23.9 billion, the WTO said.
“Morocco has negotiated perhaps the largest number of free-trade agreements of any country its size,” said Christopher Wilson, deputy chief of the U.S. mission to the WTO. “These efforts may have generated at times some measure of controversy within Morocco. In our view, however, the results are evident in the growing role of higher level manufacturing in Morocco’s export sector and in the growing interest among foreign firms in Morocco as an attractive investment destination.”