Israel bets on a free trade agreement to achieve ‘full benefit’ with Morocco

Israel bets on a free trade agreement to achieve ‘full benefit’ with Morocco

Following the normalization of relations between the two countries in December 2020, trade between Morocco and Israel saw a considerable increase. This allowed goods and commodities to flow rapidly, and Israeli visitors started to flood direct flights to Morocco.

According to information received by MoroccoLatestNews AR from the Israeli Liaison Office in Rabat, trade exchanges totaled over $179 million last year, which is equal to 1.7 billion dirhams and a 21% rise from the previous year.

The value of trade between Rabat and Tel Aviv reached over $148 million (1.4 billion dirhams) in 2021, the first year following the restoration of diplomatic relations, representing a rise of roughly 115% annually. 

Beginning in 2023, intra-trade between the two nations reached $60 million in the first quarter, up from $37.4 million during the same period the previous year, a 60% increase.

Several Israeli businesses operate in Morocco in a range of industries, including agriculture, water, renewable energy, and space. The amount of Israeli investments in the Kingdom has significantly increased in recent years.

Normalization drives trade

Relations between Morocco and Israel have gone through many stages since their normalization at the end of 2020 with American mediation. 

After that, two liaison offices were opened in the two countries, and official visits began to follow between government officials, in addition to great cooperation between universities and research institutes.

But the most prominent event that marked the course of relations was Tel Aviv’s recognition of Morocco’s sovereignty over the Sahara during the past month, which was the subject of a press release issued by the Royal Court in which this position was praised and an invitation was extended to Israeli Prime Minister Benjamin Netanyahu to pay an official visit to the Kingdom.

For Joseph Levy, President of the Morocco-Israel Chamber of Commerce and Industry (CCIMI), “political stability and cooperation between the two countries are essential to create an enabling environment to encourage investment and trade between them.”

The two countries intend to raise diplomatic representations to a higher level by moving from mere liaison offices to embassies, which is being prepared in the capital, Rabat, where construction of the embassy’s headquarters has recently begun by a Moroccan company.

After the exchange of visits between the two countries and the signing of agreements, the private sector became involved in the dynamic of normalization by participating in several economic and trade forums and exhibitions, the latest of which was the International Agriculture Exhibition in Meknes, which was attended by a large Israeli presence. An important Moroccan delegation is expected to participate in the International Agricultural Exhibition in Tel Aviv, which is expected to be organized on October 15th.

Free trade agreement

Joseph Levy indicated, in an interview with MoroccoLatestNews AR, that moving forward towards signing a free trade agreement between the two countries will open promising horizons for partnerships between the two, by strengthening trade relations and exploring investment opportunities in various sectors such as technology, agriculture and tourism.

The chamber is working to achieve the goal of facilitating trade between the two countries and creating a favorable investment climate to reach full benefit, which will be achieved in the event of the adoption of a free trade agreement. The Chamber, which includes economic actors, also aspires to cultural cooperation and raise the pace of tourists, especially with the opening of several direct airlines.

Aquaculture is one of the sectors that interest the two countries, and it is a sector that Levy believes provides great potential for cooperation, as he said: “Thanks to Morocco’s geographical location near the Mediterranean Sea and the Atlantic Ocean, it is possible to access rich marine resources, and the aim is to raise cooperation in this regard. It is to ensure sustainable fish production, which will contribute to ensuring food security, which is the area in which Israel excels a lot.”

Regarding the challenges that stand in the way of the development of trade relations, the President of the Chamber indicated that they include some regulatory and legal differences, to overcome by strengthening dialogue between companies in the two countries in the field of standardization, regulating, exchanging information and encouraging cooperation to overcome all challenges and achieve mutual benefits of economic partnership.

The Morocco-Israel Chamber of Commerce and Industry looks forward to the Kingdom joining the “Qualifying Industrial Zones (QIZs)” initiative, a piece of legislation adopted by the US Congress in 1996 that allows Egypt and Jordan to export products duty-free to the United States of America if they contain on components and inputs from Israel.

Morocco and Israel signed an economic cooperation agreement in February 2022 that includes the creation of qualified industrial zones to facilitate direct access of goods produced in them to the American market. 

Many sectors with high investment potential have been identified, such as the food industry, automobiles, aviation, water technologies, and renewable energies.


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