Casablanca: EU has sparked concern among Moroccan producers and policymakers in recent months.

A new entry price system for imported fruit and vegetables to the EU has sparked concern part Moroccan producers and policymakers in recent months.

As part of the new changes to Europe’s Common Agricultural policy, the new price-fixing regime – which will be applied starting in October this time– reforms Customs clearance rules with the aim of introducing additional transparency in Customs business collection for imported fruit and vegetables.

The move as well implements Customs valuations for the produce, raising the cost of exports to the region. Strawberries and garlic Although these changes will apply to all imports from third nations (non-EU members), Morocco will see a significant impact on its agricultural exports and has been particularly vocal about its worries over the new rules.

On the one hand, and according to various sector operators, the move will negatively affect the competitiveness of exported Moroccan produce due to tariff hikes, while on the other hand it conflicts with the multiple cooperation agreements signed between the kingdom and the bloc.

“The European Union retains the right to legislate on these issues, but Morocco finds itself deprived of a number of advantages it before benefited from,” explained Nabil Boubrahimi, economics professor at Université Bnou Toufail in Kenitra quoted in local media.

Europe has long been Morocco’s primary and major trade partner and has benefitted from advanced status with the EU since 2008. In 2000 the Association Agreement entered into force, followed in 2012 by the Agricultural Agreement establishing a free trade area between both parties for industrial and agricultural products.

Under this last arrangement, Morocco was granted new preferential export quotas allowing it to export 55% of its products – namely tomatoes, cucumbers and oranges – without paying Customs duties, as opposed to 33% under the previous agreement. The new entry price system, however, would invalidate the terms of Morocco’s transaction, taking away these fiscal advantages. In response to the discontent and lobbying from Morocco, the EU agreed in June to adjust entry prices for certain crops, notably strawberries, garlic, cucumber and cherry tomatoes.
Agricultural exports

Agricultural goods represent about 12% of the in general price of Moroccan exports and constitute a key source of foreign exchanges earnings. Exports to Europe comprise a significant portion of economic activity, and in spite of the economic difficulties faced in recent years, the continent remains Morocco’s major trade partner, accounting for 63% of total agricultural exports.

Boosting exports of high-revenue crops is one of the major pillars being implemented under the government’s ambitious Green Morocco Plan (Plan Maroc Vert, PMV), launched in 2008 to enhance sector performance and address issues constraining increase. The new entry conditions of Moroccan goods to European markets may, however, stand in the way of achieving this goal as the Moroccan Federation for Fruit and Vegetable Producers claims that the newly imposed regime could see the potential for Moroccan agricultural goods to Europe decline by 130,000 tonnes, resulting in the loss of up to 150,000 jobs. In 2013 the agricultural sector accounted for 39.4% of total jobs in the country and 72.7% of rural employees.
The tomato dispute

Tomatoes are one of the strategic crops to which the new EU import rules will apply starting from next October. A top revenue earner, tomatoes comprise Morocco’s major exported crop. Between 1998 and 2011, exports increased by 4.9% on average a year, with the EU absorbing the biggest share (90%).

EU tomato imports from Morocco are expected to reach 400,000 tonnes in 2014-15. While exports have evolved over the years, so have tomato varieties, ranging from the simple standard round tomato to include a broader, often higher-price selection, such as cherry tomatoes, of which the EU imported around 70,000 tonnes in 2013, up from 300 tonnes in the late 1990s.

European producers have therefore demanded that the Customs valuation system of tomatoes, the standard import price, which has remained unchanged for 15 years, be updated to take these new factors into account. This would mean higher costs for Moroccan producers who have by presently threatened to call upon the European Court of Justice to take legal actions against these measures, which they claim are in breach of World Trade Organisation rules.

A compromise satisfying both parties is still from presently on to be completed and the dispute is ongoing, putting a strain on other negotiations with the EU. One of these is the fisheries agreement – signed in 2013 – which still awaits ratification as the kingdom remains reluctant to allow European fleet back into its waters until the fruit and vegetable issue is resolved. Reaching a compromise will be vital in safeguarding jobs, securing the creation of 1.15m new opportunities planned under the PMV by 2020, and ensuring social peace in a context of regional instability stirred by rising unemployment