Purdue News
Purdue News
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March 3, 2004 Economist: Moroccan free-trade agreement signals trade trendWEST LAFAYETTE, Ind. - A free-trade agreement reached between the United States and Morocco yesterday (Tuesday, 3/2) could benefit corn growers throughout the country, says a Purdue University economist who had an advisory role in developing the agreement. Wallace Tyner, professor of agricultural economics, served as the lead economic consultant to the Moroccan agriculture ministry throughout the trade negotiations. The signing of this agreement fits a recent trend developing in U.S. trade policy, Tyner said. "While not the official position of the United States, we are moving away from multilateral trade agreements and toward more free-trade agreements with individual nations or small groups of countries," he said. "Fourteen other nations are in-line to work out similar free-trade agreements in the future." One benefit of the bilateral trade agreement with Morocco is the removal of the tariff on corn and other grains exported from the United States as the agreement is phased in. "I expect the existing tariffs on feed grains, such as corn, to be lowered or removed fairly soon after the agreement is effective," Tyner said. "The resulting rise in corn exports will obviously be a benefit to U.S. farmers." In 2002, the United States exported 16 million tons of corn to Morocco, generating $37 million in income, he said. Currently, U.S. exports to Morocco face an average tariff of 20 percent, according to the Office of the United States Trade Representative. While lowered tariffs on corn stand to benefit farmers, the free-trade agreement is expected to be a boon to the Moroccan poultry industry. "Corn is an important input for poultry, but Morocco does not produce very much of it," Tyner said. "Removing the tariff on corn imported from the U.S. not only means we can expect our exports to increase, but also that the Moroccan poultry industry can remain competitive by keeping down the cost of feed." In his role as an economic adviser, Tyner assessed how different terms in the trade negotiations would affect Moroccan agriculture. "A deal that's not good for Morocco is not good for America," he said. "We need to support economic growth in the Arab world, and this agreement is a step in that direction." At present, there is not much trade between the U.S. and Morocco, Tyner said. "This agreement will open up the possibility of expanding trade in both directions and facilitate U.S. investment in Morocco, a strategically important country for the United States," he said. "In 1787, Morocco was the first country to sign a friendship treaty with the United States, and relations have been good since that time," he said. "Morocco is an important ally in the Arab world and is located close to European markets, so U.S. investments there could be attractive. "Over the longer term, this agreement will provide benefits to both countries." Writer: Jennifer Cutraro, (765) 496-2050, jcutraro@purdue.edu Source: Wallace Tyner, (765) 494-0199, wtyner@purdue.edu Ag Communications: (765) 494-2722; Beth Forbes, bforbes@aes.purdue.edu Related Web site:
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