In Morocco conflict has given way to improved external and internal relations

Morocco’s relations with its Middle Eastern and North African neighbours have been coloured by territorial and security disputes, but are gradually improving as mutual interests strengthen. Meanwhile, its partnership with the wealthy Gulf states goes from strength to strength, with several Gulf countries major investors in Morocco and the kingdom an important security partner for its allies on the Arabian Peninsula.

Agadir Agreement

Historically, Morocco’s trade with North Africa has been low compared to that with Europe. Exports to Africa as a whole total just over $2bn annually, according to the Observatory of Economic Complexity at the Massachusetts Institute of Technology. However, the regulatory infrastructure for increasing trade is being put in place.

The Agadir Agreement, which was signed in Rabat in 2004, entered into force in 2007. It establishes the basis for a free trade zone between Morocco, Egypt, Jordan and Tunisia, and was supported by the EU as a basis for creating the EU-Mediterranean Free Trade Area over the longer term, bringing non-EU Mediterranean countries into a larger trade zone. While progress on establishing a true free trade area has been slow and hampered by political changes in the region, the potential for increasing intra-regional trade – and boosting exports to the EU – is substantial. In 2016 it was announced that the Palestinian Territories and Lebanon would also join the agreement.

Algeria

Morocco’s trade with its Arab neighbours has been hampered by political differences, most notably in the case of Algeria. The 1600-km shared border has been closed since 1994 due to a dispute over security concerns following a terrorist attack in Marrakech. The countries do trade with one another, but exports to Algeria are only worth $233m, or less than 1% of Morocco’s total export earnings. Morocco is keen for access to Algeria’s market of nearly 40m people, though it is also wary of Algiers’s stance on the Moroccan/Western Sahara. Moroccan businesses are already investing in Algeria, however, and Algerians and Moroccans do not need visas to visit one another’s countries. The countries also cooperate on security issues, a common concern.

Foreign Policy

The issue of the Moroccan/ Western Sahara continues to be an important part of Morocco’s foreign policy. The vast territory in the south of the country was once under Spanish rule and is claimed by Rabat. In 1975 King Hassan II organised the “Green March” of 350,000 Moroccans into the territory, where the Spanish had been fighting an insurgency from the pro-independence ethnic-Sahrawi Polisario Front. Spain ceded control shortly afterwards, pitting the Polisario against Moroccan forces (and until 1979, Mauritania).

A UN-backed ceasefire in 1991 ended the armed conflict, but the territory’s final status remains disputed. In recent years Morocco has offered Polisario regional autonomy under Moroccan sovereignty and channelled public and private capital into economic development projects, affordable housing and infrastructure in the region, but the Sahrawi movement has insisted on a referendum on full independence. Algeria’s support for Polisario has been a major bone of contention with Morocco and has hampered the development of trade ties between the countries.

Gulf

In contrast to the slow development of ties with other North African countries, Morocco’s relationships with GCC countries are burgeoning. The UAE, Saudi Arabia and Kuwait were ranked the second-, third- and fifth-biggest investors in Morocco in 2014, according to the Moroccan Investment Development Agency. Saudi investments could reach SR15bn (€3.6bn) by the end of 2016, up from SR10bn (€2.4bn) in early 2015, according to Mohamed bin Badr Al Doussari, a member of the Saudi-Moroccan Business Council. Gulf investors have shown particular interest in the real estate sector; Rabat is also keen to increase investment in the country’s energy sector.