TRADE MINISTER AGREES TO POSTPONE FTA JOINT

UNCLAS RABAT 000647

SIPDIS
SENSITIVE

STATE FOR EEB/TPP/BTA AND NEA/MAG
STATE PLEASE PASS TO USTR FOR C WILSON AND P BURKHEAD

E.O. 12958: N/A
TAGS: ETRD EAGR ECON MO
SUBJECT: TRADE MINISTER AGREES TO POSTPONE FTA JOINT
COMMITTEE MEETING, SPELLS OUT REMAINING ISSUES

REF: RABAT 0271


1. (SBU) Summary: Minister of Foreign Trade Abdellatif
Maazouz replied to the July 7 letter of Assistant U.S. Trade
Representative (A/USTR) Christopher Wilson, agreeing to a
delay in the Joint Committee Meeting (JCM) and outlining
areas for continued work. The Ministry of Foreign Trade also
sent a list of requested areas of technical assistance to the
Embassy. The text of Minister Maazouz's letter is included
in this message. End Summary.


2. (SBU) On July 20, Minister of Foreign Trade (MFT) Maazouz
sent a reply to the July 7 letter from A/USTR Wilson,
indicating Morocco's willingness to delay the U.S.-Morocco
Free Trade Agreement (FTA) JCM and suggesting that it could
be rescheduled in October 2009. Maazouz also outlined six
groups of outstanding issues on which the Government of
Morocco (GOM) would like to continue to engage with the USG.


3. (SBU) The six areas that Maazouz identified include:

-- Customs Issues: Maazouz stated that Morocco's position on
"direct transport" (transshipment) is clear, but indicated he
is willing to continue discussions.

-- Agricultural Issues: The Minister asserted that Morocco's
administration of wheat tariff rate quotas is not responsible
for the difficulties that U.S. suppliers have had in filling
the quotas, stating that European suppliers use the same
system without difficulty. He emphasized Morocco's desire
for movement on approval for produce exports to the U.S.,
creation of a sanitary and phytosanitary working group, and
accelerated tariff elimination on certain products.

-- Textiles Market Access: Maazouz stated that Moroccan
textile exporters face difficulties obtaining the
preferential tariffs to which they are entitled under the FTA.

-- Exchange of Letters: Morocco hopes to sign the letters on
Non-conforming Measures and the omitted tariff positions on
fisheries during the rescheduled JCM.

-- Technical Assistance: Maazouz praised the Commercial Law
Development Program (CLDP) assistance and urged its
continuation. (Note: The Embassy also received this week a
Note Verbale from the MFT outlining areas of requested
technical assistance. We will report these details septel
following translation. End Note.)

-- Statistics Harmonization: The GOM indicated its
willingness to repeat last year's exchange of data and
interaction between U.S. Census Bureau and Morocco's Office
of Exchanges in order to reconcile differing trade
statistics. (Note: The Census Bureau and the Office of
Exchanges have scheduled a teleconference on July 28 to
continue this exercise. End Note.)


4. (SBU) The text of Minister Maazouz's letter follows:

Begin text.

July 20, 2009

Mr. Christopher Wilson
Assistant United States Trade Representative for Africa and
the Middle East
Washington, D.C.

Dear Mr. Assistant Representative:

Let me first express to you how pleased I was to meet you
last March during your visit to Morocco, and express our
satisfaction regarding our discussions which were marked by
sincerity and understanding.

With reference to your letter of July 7, I hereby express our
agreement on the postponement of the Joint Committee which
was scheduled on July 23 and 24, 2009.

In this regard, I would like to share with you some thoughts
on issues of common interest.


1. Customs Issues:

Morocco believes it has provided the necessary clarifications
on the concept of Direct Shipment covered by Article 5 of the

Agreement, at the various meetings and video conferences
devoted to this issue. However, we reaffirm our willingness
to work with you in a spirit of openness and cooperation in
order to find a mutually beneficial outcome of this issue.


2. Agricultural Issues:

In agriculture, despite the efforts deployed by both sides,
several issues remain unresolved and require further
discussion between the two Parties. These mainly concern:

-- The allocation of the quota for wheat: Morocco asserts
that the current system of tenders for the management of the
quotas for wheat is not responsible for the partial use of
the quota of U.S. wheat and does not circumvent the
objectives of the Agreement, recognizing that the same system
is applied with our European partners and does not pose any
problem.

-- Sanitary and Phyto-sanitary Issues: Morocco is still
awaiting the result of requests regarding the expansion of
the region for exporting Moroccan tomatoes to the U.S., and
the request for export of red fruits and vegetables (pepper,
peas, beans, zucchini, eggplant and cucumber) as well as some
heat-treated poultry products.

-- Setting up the working group on SPS cooperation: In
accordance with the Morocco-U.S. Joint Declaration in this
regard, Morocco believes that it is necessary to set up this
working group as soon as possible.

-- Access to the market for agricultural products: Morocco
reiterates its call for the acceleration of tariff
elimination regarding canned olives and artichoke hearts, to
enable us to benefit from the agreement, in a balanced
framework without compensation or conditionality.


3. Access to the U.S. Market for Non-agricultural Products:
Textiles

Morocco is concerned about the difficulties that some
operators are still facing to obtain the preferential tariff
following the presentation of the certificate of eligibility.

It should be remembered that the certificate of eligibility
used for flexibility on rules of origin (quota of 30 million
square meters),was developed in coordination with the U.S.
Customs which approved its form and content.


4. Exchange of Letters:

The exchange of letters relating to Non-conforming Measures
on services and the omitted Tariff Positions on fisheries
were finalized and sent to the American Party in English,
Arabic and French.

We hope that these documents will be signed at the Second
Joint Committee scheduled for next October.


5. Technical Assistance

I appreciate your office's readiness to pursue programs in
support of Morocco, recognizing that coordination work has
been initiated by my Ministry in collaboration with the
United States Embassy in Rabat and the Commercial Law
Development Program (CLDP).

In this regard, we would like to see the technical assistance
program, developed between the two parties under the CLDP,
take shape as soon as possible.


6. Other Issues: Study on Harmonizing Statistics:

We applaud the efforts of the working group on the divergence
of American and Moroccan trade statistics, undertaken by the
Office of Exchanges and the U.S. Census Bureau.

In this regard, the Moroccan Office of Exchanges is willing
to repeat the mirror exercise of foreign trade data and had
indicated its willingness to meet with its counterparts from
the U.S. Census last May or June, but this meeting did not
take place.

I do not wish to conclude without reiterating our readiness
to continue cooperation on issues of common interest in order
to achieve the economic objectives of the Agreement between

our two countries.

/S/
Abdellatif Maazouz
Minister of Foreign Trade

End text.


*****************************************
Visit Embassy Rabat's Classified Website;
http://www.intelink.sgov.gov/wiki/Portal:Moro cco
*****************************************

Jackson