x Abu Dhabi, UAEFriday 19 January 2018

Reduce trade barriers to spur regional growth

Morocco needs development help, certainly, but the GCC could also contribute by easing the terms of trade with the kingdom.

King Mohamed VI of Morocco is to arrive in the UAE on Monday, with a dozen advisers and ministers, as part of a tour of four GCC capitals. There is a lot to discuss - but trade, and particularly trade in food - should top their list.

The visitors' hope to find funding for development projects in Morocco, a country where GDP per capita is about $5,000 (Dh18,350). That's less than a quarter of the figure for Bahrain, which is by this measure the least prosperous GCC state.

That disparity, along with the obvious matter of geography, suggests that progress may be slow towards the notion, first mentioned in public 18 months ago, that Morocco (along with Jordan) might join the GCC. The proposal has been under study, with no visible progress, ever since.

Even without formal inclusion of the kingdom and its 32 million people, however, GCC states are already helping build Morocco's economy. The UAE, Saudi Arabia, Kuwait and Qatar have committed $6 billion to projects in Morocco between this year and 2016.

There is however another measure to consider, one that would help Moroccans and GCC residents as well. This is abolition of import tariffs, and the slashing of non-tariff barriers, on processed food products.

After tourism, farm products are Morocco's top earner of foreign currency. But both sectors have been hurt by Europe's economic downturn.

As a customs union, the GCC imposes a common tariff of 5 per cent on imports, including processed food products (such as Morocco's canned sardines and olive oil) but raw food (such as Moroccan clementines) enters duty-free. Those numbers - five per cent and zero - suggest that the GCC is already quite friendly to food imports, as befits a country that needs to bring in food not only for citizens and professional-class expatriates but also for a large number of expatriate labourers.

However, a number of "non-tariff barriers" - licence requirements, inspection rules, bureaucratic delays and the like - put roadblocks in the way of greater trade. Hacking away this troublesome underbrush may seem like a small matter, but merchants know how such steps can streamline commerce and prosperity.

With the "Doha round" of global trade talks gripped by inertia, many states have moved to bilateral or regional trade pacts. The GCC is now in talks towards free- or freer-trade deals with China, Japan, the EU, South America's Mercosur group and others.

It seems only reasonable that North African states, having so much in common with the GCC and needing so much economic assistance, should be given comparable treatment.