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05RABAT1144 2005-06-02 17:10:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Rabat
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1. (SBU) Summary: In a very friendly June 2 meeting with
Moroccan Minister of Commerce and Industry Mezouar, CODEL
Smith discussed FTA implementation, Moroccan economic
reform, support for small businesses as an engine for growth
and job creation, and the importance of judicial reform to
attract investment. After congratulating Morocco for
pursuing the right track on reforms, CODEL Smith raised WTO
Doha Round market access and intellectual property rights
concerns. Specifically, Senator Smith (R-OR) relayed Nike's
interest in including tariff reduction on sporting goods in
the WTO market access negotiations. They also discussed
efforts to combat counterfeiting and trademark infringement.
End summary.

2. (U) On June 2, Senators Gordon Smith (R-OR), Patrick
Leahy (D-VT), Jeff Sessions (R-AL), and Mike Enzi (R-WY) met
with Moroccan Minister of Commerce and Industry Salaheddine
Mezouar. The Senators were accompanied by staffers
Elizabeth Stewart, Kevin MacDonald, and Col. Art White.
Mezouar's Chief of Staff Karim Taghi, Patent and Trademark
Office (OMPIC) Director Aziz Bouazzaoui and Director of
Industrial Production Jamal Jamali joined the the Minister.
The Ambassador and EconCouns also attended.

3. (SBU) Underscoring the importance of the bilateral
relationship, Senator Smith welcomed imminent implementation
of the bilateral FTA - a sign of the U.S.-Morocco
partnership. Smith said that as a member of the Senate
Finance Committee he hears from a large number of countries
seeking FTAs, but Morocco got one, because it has embraced
reform, transparency, and economic growth. Agreeing that
the FTA reinforces strong bilateral ties, Mezouar called the
FTA a "real window of opportunity" to adopt a new Anglo-
Saxon approach to economic management. He reported that
Moroccan officials were working day and night to complete
the necessary legal and regulatory changes necessary to
fulfill all the FTA's obligations, especially with regard to
intellectual property rights (IPR) protection. The Minister
insisted that IPR protection was itself an important
component of Morocco's development. The Government of
Morocco (GOM) was defending these property rights not only
due to FTA considerations, but also out of conviction and
because these efforts will benefit Moroccan economic and
cultural development. Mezouar proudly noted that Customs
will now be empowered to seize counterfeit goods at
Morocco's borders, and changes to commercial laws will
accelerate court cases. As a former businessman, Mezouar
added, he understands the importance of investing in a brand
and reaping a return on a trademark's use. Smith thanked
Mezouar saying he hoped Morocco would be the "shining star"
seen in its national flag for the Middle East region.

4. (SBU) Expressing hope that the WTO Doha Round would end
successfully, Senator Smith noted Nike - an Oregon company -
was anxious to secure the reduction and elimination of
tariffs on sporting goods in the non-agricultural market
access (NAMA) talks. Such reductions could result in
increased investment in sporting goods production in
Morocco, he argued. Mezouar warmed the atmosphere by
recalling that Nike had sponsored the Moroccan national
basketball team on which he played, adding that he had also
played summer league basketball in Minnesota.

5. (U) Senator Enzi told Mezouar he was impressed not only
with Morocco's microcredit programs and efforts to promote
small businesses, but with the private sector's obvious
commitment to good labor practices. Mezouar agreed that
promoting SMEs was central to the King's commitment and GOM
efforts to bridge the gap between current reality and the
global situation in 2005. Mezouar said the GOM is
concentrating its efforts on new SMEs which are at the most
vulnerable in the first few years. Enzi noted that small
businesses create jobs and added that simplified rules and
regulations help businesses big and small. Mezouar agreed,
adding that new businesses in Morocco are being created in
an environment of free markets and competition, not in
"sheltered waters." Senator Enzi congratulated Mezouar on
the GOM's SME efforts, noting that today's small business is
tomorrow's Nike.

6. (SBU) Minister Mezouar explained the challenges facing
Morocco. The GOM is nurturing economic opportunity and
freedom because together they will accelerate needed
reforms. Mezouar noted that the GOM lacks adequate
resources, capacities, and personnel to realize the full
range of needed reforms now. "We know that our friends who
want us to succeed will want to support us," so that Morocco
will be a positive example to the region, not a negative
one. That said, Morocco remains committed to economic
reforms, he added. Mezouar said that economic reforms and
job creation would take precedence over democratic reforms,
however. Senator Enzi, responding to Mezouar's comments,
agreed that job creation is a more immediate need: "People
need to have work before they can concentrate on democracy."
Senator Enzi added that judicial reform was critical to
attracting foreign investment. Noting that in his judgment
Morocco was on the right trend for democracy, freedom, rule
of law, and economic growth, Senator Sessions conceded that
Morocco is obviously "taking some chances." Senator Enzi
agreed that change is never simple, but it can be done
without disruption.

7. (U) Finally, Mezouar's Chief of Staff Karim Taghi
shared information on a German shoe company's investment in
Larache, a city in Morocco's interior. The investment
employs 1500 - 400 in a factory and nearly eleven hundred
who work out of their homes and village community centers.
There is incredible flexibility in wages, work hours, and
personnel management, he said. Taghi suggested that the
senators might know of interested U.S. investors (not so
subtly mentioning Nike in Senator Smith's home state).

8. CODEL Smith cleared this cable.