The European Union and Morocco: Prospects and Challenges for Economic Development

Written by: Alvaro Casero (EST Ambassador to Spain 2020/21)

The European Union is Morocco’s main trading partner. EU companies established in Morocco, most of whom have their headquarters in France and Spain, are gradually outsourcing more and more segments of their production. The economic activities of these businesses range over several areas, from food processing and banking to insurance and telecommunications (García, 2019). Foreign investment in Morocco by European companies responds to the old business strategy of relocating production niches to countries with lower costs. This is the case of the assembly plants of large automobile manufacturers and the aerospace industry that have installed part of their production in cities such as Tangier or Casablanca. Morocco’s participation in the supply chain does not provide added value for exports and does not allow for technology transfers. Rather, it involves investment portfolios and subcontracting companies that operate in holdings and services privatized by the State, as well as concessions within public sector strategies. Therefore, Morocco’s production process depends on imported industrial and technological inputs, which constitutes almost half of its intermediate consumption (Mace & Chevancé, 2016).  

The Moroccan Monarchy, Balancing Between Africa and Europe

At the international level, the Moroccan monarchy continues to be a political ally of Western powers, offers its services to NATO and the United States in the fight against terrorism, and works with the Gulf countries toward the economic development of the region. The Western Sahara issue, an ongoing conflict concerning a dispute between the Sahrawi national liberation movement and the Kingdom of Morocco, is an essential element of the country’s foreign policy. The monarchy is conducting an intense diplomatic offensive on this matter parallel to its efforts to consolidate its economic and political position in Africa. For example, the Moroccan Minister of External Affairs stated recently that Ceuta and Melilla are as Moroccan as the Western Sahara, pointing out an ongoing and unsolved central conflict with Spain concerning national identities (García, 2019). Morocco is therefore playing a role as a platform of Western powers in Africa in terms of trade, investment, and management of natural resources simultaneously.  

The Moroccan monarchy also enjoys a prominent role as religious leader, and it exploits its political and religious power and influence to keep Islamist currents at bay. Nonetheless, this dual position has also fueled domestic disputes over the control of the political power of religion between the monarchy and the Islamist political forces. In general, and as a strategy to face the challenge of political Islam, the monarchy has pursued a moderate policy towards Islamist forces by avoiding the use of force as well as the adoption of political attitudes that endorse violence. With this, the monarchy tries to avoid confrontational scenarios with the religious establishment, as has happened in neighboring countries such as Egypt and Algeria. This policy has been successful so far, making Morocco the country with the greatest political stability in North Africa after the Arab Spring (Mace & Chevancé, 2016).

Hassan II’s death in 1999 gave the monarchy new breath by providing it with the chance to cut ties with the repression of the past and its conservative tradition. To mark the beginning of this new era for the monarchy, his successor, Mohamed VI, has promoted social programs, including the development of new infrastructures, such as highways, and the creation of small income-generating projects, such as loans for the poorest, which have improved the living conditions of the population, especially for women and the youth (Prodi, 2007, p. 77). Mohamed VI’s agenda has also been marked by his desire to tackle two fundamental issues that had caused social unrest in previous decades. The first was the transition towards a fairer justice system and a more effective human rights protection mechanism to ensure the preservation of social rights, such as accessibility to the national health system, as well as Berber identity. The policy has for the most part been successful, and the State now recognizes systemic human rights violations by delivering justice to the victims. Above all, the reforms of the judicial system have allowed the victims to be listened to and to hold perpetrators accountable for human rights abuses such as torture. 

The second issue addressed by Mohammed VI was ensuring regular and transparent elections. Again, the reforms of the electoral system have been a success, and since 2002 no election results have been questioned. After the Arab Spring, Morocco endowed itself with a new constitution that balances the political power and legitimacy of the monarchy and civil society and that grants broad executive powers to the head of government. This democratic development is reflected in the fundamental statutes, which contemplate a wide array of fundamental rights, including those related to environmental issues, gender equality and cultural particularity.  

On the economic front, Mohamed VI has opted for the integration of Morocco into the world economy through two main axes: the legal liberalization of the economy and enhanced infrastructure investment. The monarch has developed an idea of South-South cooperation among African countries that appeals to most African leaders, including those from Anglophone and Lusophone countries. Furthemore, in recent years, Morocco has turned its infrastructure into an impressive network of motorways, airports, and a world-class rail network, including a recently built high-speed train. 

Morocco and the European Union: Partnership or Confrontation?  

EU-Morocco relations trace back to the 1960s and 1970s, when the European Economic Community and the Kingdom signed their first commercial and cooperation agreements. In 1995 the Euro-Mediterranean Conference in Barcelona expanded relations through the creation of the Euro-Mediterranean Partnership (EMP), which led to the creation of a comprehensive economic, political, and social framework between EU member states and Mediterranean countries. An Association Agreement between the two parties entered into force in the year 2000, and it now constitutes the legal basis of the bilateral relation. The agreement provided the institutional framework for the EMP through the establishment of an Association Council and Committee in 2004, known as the European Neighbourhood Policy (ENP). Among the ENP countries (i.e. Algeria, Egypt, Israel, Jordan, Lebanon), Morocco has been granted an advanced status that has opened the country up to higher levels of political cooperation with the EU. Subsequent agreements have covered other economic and policy areas, such as the 2006 EU-Morocco Fisheries Partnership and Open Skies Agreements (Milano, 2006).  

Morocco’s failure to tackle security challenges stemming from illegal immigration and terrorism has gradually undermined important bilateral issues, such as drug trafficking, and cooperation areas, such as trade (i.e. agriculture and fisheries). Since 2000, Moroccan and EU authorities have enhanced bilateral cooperation on border control and intelligence to mitigate the impact of these and other security threats (Fernández – Molina & Larramendi, 2020). 

Territorial disputes have been another source of diplomatic tensions. In 2002, an incident on the Spanish Island of Perejil turned into a military skirmish between Spain and Morocco. Although tensions have gradually eased, the two Spanish enclaves of Ceuta and Melilla have been a periodic source of hostility between the two countries. For example, in 2006, the two countries engaged in a diplomatic dispute after Morocco denied entry to a Spanish security convoy coming from Ceuta to fight illegal immigration (Alisahali, 2020). 

Every Relationship Begins With a Deal

Institutional relations between Brussels and Rabat are based on the EU-Morocco Association Agreement, which was signed in February 1996 and entered into force in March 2000. This agreement was subsequently complemented with an Action Plan, launched in 2005 under the European Neighborhood Policy, which is based on the principle of differentiation whereby each neighboring country promotes a specific deepening of EU relations with its partners. EU-Morocco relations continued to expand following the sociopolitical developments in North Africa and the Sahel, which culminated in the entry into force of the Association Agreement. Currently, migratory flows, the instability of the Sahel, and rising terrorist activity, added to the unpredictable consequences of the Libyan war, are calling for enhanced cooperation between the EU and Morocco (European Commission, 2000). 

This complicated context justifies the logic of the new cooperation programs adopted in December 2019 by the European Commission for an amount of 389 million euros, aimed at “supporting reforms, inclusive development, and border management, as well as promoting a Euro-Moroccan partnership of shared prosperity.” (Mustafa, 2019). To complement this aid, the new budget support program of 101.7 million euros, which is part of the North Africa strand of the EU Emergency Trust Fund for Africa, will support border management and the fight against human trafficking (Mustafa, 2019). The program will focus on “enhancing the management of land and sea borders, and also airports, by helping Morocco to continue modernizing the means available to it, including by using new technologies and exchanging best practices with the EU agencies, Frontex, and Europol.” (European Commission, 2000). At the heart of the program will be the respect for human rights and the protection of vulnerable migrants. Given the high number of young people and unaccompanied minors from Morocco that migrate to the EU, the program will put particular emphasis on raising young people and their families’ awareness of the perils of illegal migration. 

The new financial aid that EU authorities will provide for Morocco shows a clear EU commitment to the development of the country. Past EU aid to Morocco, delivered between 2014 and 2018, has had limited results. The assistance, delivered through direct transfers, provided limited added value and was restricted in its ability to support reforms in the country. According to the auditors, one of the reasons for this failure was the overly broad definition of the aid’s eligible areas, which reduced its potential impact. They also pointed out that the Commission had not been transparent in the allocation of funds to sector programs, donor coordination between sectors was uneven, and that there was a lack of rigorous controls on the assessment of results (Spanish Ministry of External Affairs, 2018).

Getting Along With the Neighbors 

The establishment of the European Neighborhood Policy (ENP) in 2004 sought to open a new chapter in EU-Morocco relations. As former EU Commission President Romano Prodi (2007) argued, “the outlook for the ENP as a project was initially to represent something “more than partnership and less than membership” by offering neighbors a stake in the internal market through the opportunity to participate in key aspects of EU policies and programs. To achieve this goal, the EU-Morocco Action Plan aims to promote structural reforms as well as legislative and regulatory modernization by establishing priority actions that include good governance and human rights, combating terrorism, and the effective management of migration flows. The liberalization of trade between Morocco and the EU following the Action Plan has made a big impact on the imports-exports relation between both sides. In the early 2000s, EU tariffs harmed bilateral trade, and it has been estimated that a total tariff dismantling would increase Moroccan imports from the EU at an annual average rate of 8.25 percent. All else equal, this would double the growth rate of EU exports prior to the agreement’s entry into force (Mustafa, 2019).

The European Union has remained extremely cautious over many politically sensitive issues regarding Morocco such as democracy, respect for human rights, and restrictions on agricultural exports. These issues are crucial concerning human security, which can only be achieved through political stability, a peaceful social environment, and economic development. Instead, the EU seems to be limited by “politics of insecurity,” which has been made especially visible in its attempts to block immigration (Brunel, 2009). The EU has managed the rise of negative attitudes towards immigrants from Islamic countries like Morocco by assisting the countries of origin in preventing their citizens from migrating through development aid. A second approach has been to advance the EU’s internal and external security agendas by establishing blurred linkages between migration and Islamist terrorism, which has resulted in attempts at preventing immigration through legal and technical cooperation with the countries in question. In the EU’s policies towards Morocco, it is the latter case that prevails.

The New Migration Policy (NMP) serves the objectives of Moroccan foreign policy towards both Africa and the EU, as internationalization remains a primary driving force for the country’s migration policies. Morocco-EU relations have recently made a return from a normative diplomatic approach to an overt transactional attitude around migration and border control practices. This becomes especially apparent in the field of justice and home affairs, which has taken a surprisingly dominant place in the ENP’s history, where illegal immigration has been pictured as the main concern of EU member states while Morocco has been presented as a transit country. This approach can be explained by security concerns among EU civil society as well as uneasiness over the perceived threats to its identity (Waever, 1993). However, this is a paradoxical stance, as it contradicts the overall aim of the Barcelona process to create an all-inclusive space of liberty and security in the Mediterranean basin. Furthermore, the focus on the EU’s  internal security can be seen as promoting self-interest underneath the surface. 

The Mediterranean as a Fundamental Space for EU Foreign Policy

The first proposal to enhance cooperation in the Mediterranean was made by the former President of France Nicolas Sarkozy, who proposed the creation of the Union for the Mediterranean (UfM) in 2007 (Emerson, 2008). Although in principle it only contemplated the participation of countries bordering the Mediterranean itself, the plan was modified at the request of Spain and Germany to include all EU states (Huysmans, 2006). The modification served as an indication that policy towards the Mediterranean affects the entire Union. Established as a new partnership for renewed progress, the Union for the Mediterranean builds on the Barcelona Declaration as well as on the acquis of the Barcelona Process, which aimed to turn the Mediterranean into a common space of peace, stability, and prosperity.  Like its predecessors, the UfM stresses the need for enhanced shared ownership by all participants and greater civil society relevance and visibility (Spanish Ministry of External Affairs, 2018). Following the revision of the European Neighborhood Policy, the UfM has entered a phase through which, once consolidated, it will become the most comprehensive policy for the development of Euro-Mediterranean relations. Moreover, it will guide the ENP’s multilateral framework for the South and complement the EU’s bilateral relations with these countries as well as for the coordination of initiatives in the Mediterranean area.

In 2017, the European External Action Service approved the EU-Morocco Action Plan, a roadmap for the coming years that consisted of a strategic action document that responded to the main challenges the EU is facing in the Mediterranean, including regional stability, human development, and regional integration (Navarro, 2020). In the same year, several EU member heads of state met in Madrid for the III Summit of the Southern Countries of the European Union, in which they reaffirmed their support for the Union for the Mediterranean and highlighted its “central role in consolidating Euro-Mediterranean regional cooperation as an expression of co-ownership in the management of our common  regional agenda with the aim of effectively and collectively addressing our current challenges.” (Blanes & Milgram, 2006). The new EU-Morocco Action Plan has been an essential point of reference that has guided bilateral relations with Morocco in the last years and thus provide a road map for a deeper association between Morocco and the EU in the future. 

Conclusion

Morocco has gone through significant changes over the last few decades, having developed better democratic mechanisms and having found allies in Europe who have contributed to its development. The European Union has been Morocco’s main partner, and it has encouraged a wide variety of reforms in the country through various instruments, such as bilateral treaties. The EU has also provided technical and financial assistance to Morocco to align its rules and laws with EU norms, with a long-term vision of integrating the country into the EU internal market.

Nonetheless, despite EU assistance, results have been slow and they have not always lived up to expectations. A more effective approach would be to concentrate financial assistance in key areas such as the judicial system and education, and to make its availability more visible. Only then would Morocco be more inclined to take advantage of such resources, making progress easier to monitor and leaving ample space to modify inefficient programs to improve performance. Another major issue that has hardly been addressed in any agreement is EU agricultural trade with Morocco. The primary sector plays a much more significant role in Morocco’s economy than in Europe, and expanded agricultural trade could be of greater interest to the country (Brunel, 2009, p.222). 

EU economic assistance plays a fundamental role in Morocco, and it should not be seen as a waste of money or resources. After all, EU investment and aid have contributed to maintaining close relations with an important border ally in the African continent, where there are great disputes, conflicts, and problems yet to be solved. Through EU policies and programs like the European Neighborhood Policy, investing in the economic development of partner countries proves more effective than not partnering up with them at all, which usually contributes to their stagnation. Therefore, the EU’s investment in diplomatic and trade relations with Morocco is not a greater financial burden to the EU than its absence would be otherwise, and so the EU should continue to maintain its partnership with the country.

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