Foreign trade in Morocco - Dissertation Économique

Foreign trade is an indispensable element for the economic development of a country. It is the imports that participate in the execution of the programs and cover the payment of external debts. Thus, we export in order to have the convertible currencies necessary for the purchase abroad of goods and services. As a result, any reduction in imports or exports has a harmful impact on the country’s economic health and eventually leads to a breakdown in citizens standards of living. Nevertheless, imports in divers developing countries include luxury goods for the privileged classes for their ostentatious and unproductive consumption. These types of expenses entail currency outflows who should normally finance productive purchases for developing economies.

It should be pointed out that the evolution of Moroccan foreign trade over the last two decades has been marked by the beginning of important changes in the geographical and sectorial exports structure, as well as by improving their quality and technological content, which has led to positive effects, though moderate, on the competitiveness of Moroccan exports. Moroccos degree of openness increase from 49% in 2000 to 62.2% in 2016. With regard to other emerging economies, the Kingdom records an average opening rate over the 2008-2016 period of around 62%, one higher than that of South Africa (57%), Turkey (42%) and Brazil (19%). The analysis of the countrys exports by destination reveals a greater diversification of export destinations, as evidenced by the EU’s declined share, which went from 75.5% of Morocco’s total exports in 2000 to 64.8% in 2016.

Despite this trend, France and Spain remain Morocco’s main customers, with 21.1% and 23.3% of its exports in 2016.In terms of its sectorial structures, a significant change has been recorded for recent years. Indeed, the product diversification index averaged 0.869 over the 2000-2016 period. The quantity of exported products thus grew by 1.5% on average between 2000 and 2016, from 2,581 products to 3,271 products. Moreover, the average per exported product has more than doubled, from 30 MDH in 2000 to over 68.1 million in 2016. Moroccan imports have also notably increased, growing from 165 billion dirhams on average over the period 2000-2007 to 354 billion between 2008 and 2016. In reality, the import penetration rate, which measures imports total shares in domestic market, rose from 35% in the period of 2000-2007 and by 40% in the period of 2008-2016.

The analysis of Morocco’s increase in imports of goods

indicates that it comes from the prices rise of certain products such as energy and lubricants, raw products and food products, and the great increase in the quantity of imports of finished products. equipment, semi-finished products and finished consumer products.Yet, positive side of foreign trade suggest a certain balance in the country’s international trade. If external balances are deficient, just like it is in Morocco, foreign trade will become a reason of economic backwardness and underdevelopment and will drive to the use of external borrowing. This means that foreign trade has 2 dissimilar aspects: first of all, it is the main means of freeing oneself from the financial encumbrance vis-à-vis abroad and, then, it can be an instrument likely to contribute to the growth of debts.

The debt crisis is closely linked to the BOP deficit.In other words, an effective and appropriate cure to this crisis is only suitable with a return to commercial equilibrium. The trade and current account deficit impacts the external payments situation and inflates the country’s debt. The trade deficit is due to insufficient coverage of imports by exports. In the Kingdom, the amount of imports has yet been higher than that of exports. Products exported by the country are low value-added products, and also encounter several difficulties like protectionist measures which are applied by the main receiving countries of the kingdoms products. Products exported from Morocco are fabricated of products that encounter great price fluctuations at the international market level. If the price of any of these goods falls on the market, foreign trade will be seriously damaged, and it is almost impossible to make up for the loss through another product.

These causes (such as drought) play an extremely negative role in the development of exports.Morocco’s foreign trade matter hail from the existence of two factors: delay of exports and push of imports. Years of drought compel the state to import large quantities of cereals, rise in oil prices and lack of dynamism of exports, which all worsen the deficit.

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