FY06 BFIF PROPOSAL - MOROCCO

UNCLAS RABAT 000104

SIPDIS

SIPDIS

STATE FOR EB/CBA DWINSTEAD

E.O. 12958: N/A
TAGS: ETRD BEXP MO
SUBJECT: FY06 BFIF PROPOSAL - MOROCCO


REF: 05 STATE 189815


1. Embassy Rabat seeks to use $11,000 of Business
Facilitation Incentive Funds (BFIF) funding to support the
U.S.-Morocco Free Trade Agreement (FTA) that was implemented
on January 1, 2006. This funding leverages funding from the
American Chamber of Commerce (AmCham) in Morocco. This is
the first FTA the USG has in Africa and only the second one
with an Arab country. This FTA is one of the first steps in
the Middle East Free Trade Area envisioned by the USG.
Therefore, it is imperative that the U.S.-Morocco FTA
succeed and act as a catalyst for other countries in the
region. The USG, through the Department of Commerce, USAID
and the Middle East Partnership Initiative (MEPI),has
already spent several million dollars to prepare the
Moroccan economy for the FTA. Now, we seek to build upon
these efforts by linking U.S. and Moroccan businesses to
take the final steps toward doing business with each other.


2. Post seeks to use BFIF funds, in conjunction with AmCham
funding, to bring five trainers from the U.S. to Morocco to
teach American and Moroccan companies how to use the
provisions in the FTA to their advantage to trade with one
another and therefore increase trade between our two
countries. The USG funding will pay for the travel and
interpretation service expenses of five trainers to come to
Morocco to conduct sector-specific training sessions in
selected Moroccan cities. This program will be further
leveraged by working with the American Chamber of Commerce
(AmCham) to help promote these training sessions by using
its well-established network of contacts and its own funding
for all other expenses including per diem, honoraria for
local experts, local transportation and advertising
(approximately $8,300).


3. Justification: The proposed sector-specific training
sessions will help to support post's MPP goals of increasing
trade with and investment in Morocco, reducing unemployment
by helping to encourage job creation, and increasing
economic growth and development. All of these features also
support the goals of the Millennium Challenge Corporation
(MCC),which is currently negotiating a compact with the GOM
for using USG assistance funds to stimulate economic growth
in Morocco and increase human development. Both of these
issues are extremely important in combating global terrorism
that finds a fertile breeding ground in impoverished lands
where people have little hope of a better future.


4. Planning milestones: Post and AmCham plan five sector-
specific training sessions in the automotive components,
agribusiness, chemicals, apparel and pharmaceuticals
sectors, which we deem likely to benefit from the FTA. Each
trainer will spend approximately one week in Morocco and
conduct several training sessions in various cities during
that time. Trainers will visit Morocco in the February to
April timeframe to help assure a quick start to FTA-related
business activities. AmCham, with input from post, will
select the trainers and cities, identify target audiences,
arrange local transportation and other logistics, and
perform management duties of the program.


5. Performance metrics or anticipated outcomes: Increased
trade between the U.S. and Morocco. Currently, bi-lateral
trade is under $1 billion per year and relatively balanced.
The U.S. accounts for only about 4 percent of Morocco's
foreign trade and post's MPP calls for a 10 percent increase
in bilateral trade in each of the next four years. In
addition to supporting the FTA, the proposed BFIF activities
should create domestic American jobs and boost the U.S.
economy by raising export levels. A successful FTA should
help encourage further economic liberalization in Morocco
and reinforce its western orientation and promote global
stability.


6. Estimated costs: $11,000. Airfare for each of the
five trainers will cost approximately $1,000 and
interpretation services should be about $6,000.


7. Point of Contact: David Schnier, Economic Officer
Tel: (212) 37 762265 ext. 2131
E-mail: schnierdm@state.gov


8. Leveraging funding from other DOS bureaus and/or
agencies: USAID and MEPI have already spent approximately
$7 million on various projects to support the FTA and
increase trade with Morocco in recent years. The proposed
BFIF activities reinforce the current USAID programs in
support of the FTA. In addition, AmCham will make a
significant financial and in-kind contribution to the
proposed BFIF activities.



9. Project outcome/success criteria: Increased levels of bi-
lateral trade and U.S. exports, improved business
environment in Morocco, and increased opportunities for
American businesses. In addition, the proposed program will
help modernization and development of the Moroccan economy,
create jobs, raise the standard of living, and help combat
terrorism.


10. Follow-up strategy: Post is currently planning a
business conference targeting the automobile sector in
Morocco. We are closely monitoring progress on the Tangier
Port facility that could become a major trans-shipment point
for goods destined to the European Union. Morocco is likely
to secure the largest grant in the MCC program that has
economic growth as its primary focus.