Morocco edges closer to free trade deal with Qatar

Joel Marklund/Bildbyran via Reuters

• Second round of talks between Rabat and Doha took place in January
• Deal tipped to boost Qatari investment in Morocco, economist says
• Agreement would also ‘enhance regional economic integration’

Morocco looks likely to benefit from Qatar’s booming energy revenues as the two countries move closer to a free trade deal, a Mena economist has said.

Government ministers concluded a second round of negotiations in Doha on January 22 to 23, building on the opening discussions that took place in Rabat last November.

Qatar recorded a budget surplus of QR30 billion ($8.19 billion) in Q3 2022, according to the state-run Qatar News Agency, helped considerably by increased energy revenues. Total revenues in the third quarter hit QR81.8 billion, 93 percent of which came from oil and gas.

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Jamil Naayem, principal economist in S&P Global Market Intelligence’s Mena economic forecasting team, said a free trade agreement between Doha and Rabat could “facilitate the channelling of part of the energy revenue windfall, and ensuing liquidity that the Qatar Investment Authority is benefiting from, into the North African economy, among other investment targets, in the near future.”

Qatar’s exports to Morocco totalled $140.38 million during 2021, according to the United Nations trade database. This was largely made up of plastics ($51.05 million), salt, sulphur, earth, stone, plaster, lime and cement ($44.83 million), aluminium ($28.24 million) and mineral fuels, oils, distillation products ($10.06 million).

Moroccan exports to Qatar reached $30.01 million in 2021. Food is the key export category, led by fruits, nuts, peel of citrus fruit and melons ($7.68 million), cereal, flour, starch, milk preparations and products ($7.5 million) and miscellaneous edible preparations ($4.48 million).

Naayem said: “Both countries are likely to benefit from such a wide-ranging agreement in the making, including, but not necessarily limited to, potential gas and other industrial exports from Qatar to agriculture products and manufactured goods out of Morocco.”

The Qatar-Morocco Business Council pointed out last year that 80 Moroccan companies operate in Qatar, in partnership with local businesses, in sectors including hospitality, contracting, fashion and business solutions.

“There’s always a great deal of talk about the need to better integrate the economies of the Middle East and North Africa region, but the action and progress on this front has been slow to materialise,” said Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington.

“The completion of a free trade agreement would help to enhance regional economic integration.”

Qatar and Morocco have enjoyed diplomatic relations since 1972, although economic ties between the countries have been ramped up since 2011.

Mogielnicki added: “Trade flows are currently resting at a pretty low level, so there is plenty of room for growth in theory.

“I don’t expect an eventual agreement to serve as a watershed moment in economic relations between the two countries, but it will help strengthen ties and establish another mechanism to deepen commercial linkages.”