It is perhaps no surprise that a proposed new import tariff regime in Morocco has been slammed by an influential body representing vehicles shipped in from outside the EU.
GIVET (Groupment des Importateurs de Vehicules pour l’Equite Tarifaire) has positioned itself four square against government plans to zero rate tariffs for imports from the European Union (EU), which currently attract 6.5% duty.
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But Moroccan consumers think otherwise. As the economy in the Maghreb country heats up – despite all the difficulties of the previous two years – buyers are looking increasingly north across the Strait of Gibraltar to Europe.
As part of a free trade agreement, tariffs on imported EU cars could drop to zero, provoking the opprobrium of GIVET as non-EU countries have a 37.5% tariff.
Asian models nonetheless have a market share of around 40% in Morocco and GIVET fears this substantial slice could collapse if European competition kicks in under the deal slated to start in 2012.
Moroccan industry and trade minister Ahmed Reda Chami said he recognised the worries of Asian importers but his administration must abide by the free trade agreement.
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By GlobalDataAnd therein lies the rub surely. A free trade agreement is just that. It’s not a deal that you can pick and choose – it’s either a free trade contract or it’s not.
Of course the Asian importers don’t like it. But they’ve had a pretty good run in Morocco by all accounts despite the higher tarrifs imposed on them. Instead of complaining about the European tarrif, perhaps they should focus on the non-EU rate.
With government forecasts predicting car sales will rise to 250,000 per year in 2015 from 100,000 now, there is undoubtedly elasticity for EU and non-EU producers to grow market share.
Morocco is looking increasingly to Europe given its geography on the fringes of the continent, at the same time as placating its traditional Arab allies and Asian importer friends.
Europeans make classy cars as well as those from the Far East and have as much right to do business as those in Asia.
A free trade deal works both ways – there are bound to be concessions the EU has had to make that are maybe not so obvious to non-EU importers.
