Despite the vast 16,135 kilometers separating Morocco and Australia, bilateral trade has surged in recent years averaging 35% growth between 2017 and 2022, a testament to the robust diplomatic ties underpinning their relationship.
The burgeoning connection draws the attention of business leaders eager to turn positive diplomatic relations into profitable ventures. Leading this move is the Australian Morocco Business Network (AMBN), a non-profit organization dedicated to promoting bilateral trade between Morocco and Australia. AMBN’s primary mission is to bridge the information gap that hinders market penetration for businesses on both sides.
In an interview with BarlamanToday, Soufiane Rboub, the architect behind AMBN and its president shared the organization’s vision and how it is working to bridge the gap between these two unconventional trade partners.
How would you assess the current state of trade relations between Australia and Morocco? Are there specific sectors that stand out as particularly successful or promising?
The current trade relations between Australia and Morocco are small in comparison with major trading partners for both countries, however, within the context, it has seen an increase since 2019 from approximately AUD 120 million to now around AUD 400 million.
While it’s going in the right direction, I believe the value is somewhat distraught in terms of numbers just because we have a number of Australian companies that operate in third countries and their export of Australian goods would not count towards the direct trade between both nations.
Some of the sectors that have seen growth are agribusiness and mining, while tourism also plays a pivotal exchange, as the number of Australian tourists is increasing. Renewable energy is another with the signing of a JV between OCP and Fortescue to jointly develop a green hydrogen plant.
Agriculture is a key area of trade between Australia and Morocco. What are the primary agricultural products being traded, and how do you see this sector evolving in the coming years?
Both countries enjoy an agricultural sector that is important, while the trade is limited in terms of products such as meat and vegetables AUD 10 million exported from Australia to Morocco. We note an Australian company that operates in Morocco and owns a number of farms which uses Morocco’s strategic location and various Free Trade Agreements (FTA) with other countries to access other markets.
However, my concern for Moroccan agricultural products is the strict biosecurity that Australia imposes and limited market access for them, we are aware of non-tariff barriers that restrict the flow of goods between both countries. For example, Moroccan sardines are not able to be exported to Australia due to red tape and long administrative processes within the Australian Ministry of Agriculture.
Having said that, as a business network, we would endeavor to work with both governments to discuss mutual benefits in terms of tariffs for their subsequent agricultural goods. I note the 200% tariffs for meat by Morocco.
Phosphate products are critical for Australian agriculture. What measures do you believe should be taken to create a more sustainable and mutually beneficial trade model between Morocco and Australia in this sector?
One of the mechanisms that could create a sustainable benefit is to establish long-term contracts with flexible pricing mechanisms that can adapt to global market fluctuations. This ensures a steady supply of Australian agriculture while providing Morocco with predictable revenue.
I believe both countries could learn from each other in terms of mining practices, they could collaborate on sustainable mining and production practices, sharing technology and expertise to minimize environmental impact. This could also involve joint investments in research for eco-friendly phosphate extraction and processing.
The collaboration will encourage Morocco to develop more value-added phosphate products, like fertilizers tailored for Australian agricultural conditions. I would also suggest that OCP could look at investing in Australia in supply chain logistics of fertilizers or acquiring processing fertilizer plants which could enhance trade value and deepen bilateral economic ties.
Apart from agriculture, which other sectors, such as renewable energy or water management, do you see as emerging opportunities for economic cooperation between Australia and Morocco?
Morocco’s commitment to renewable energy, particularly solar and wind, aligns well with Australia’s expertise in this sector. Both countries could collaborate on technology transfer, joint ventures, and research projects in renewable energy.
With both countries facing water scarcity challenges, there is significant potential for collaboration in water management technologies. This includes desalination, efficient irrigation systems, and water recycling techniques. AMBN was launched in South Australia which is the driest state in Australia. In Adelaide (the capital city of SA) the government adapted its urban living to accommodate water scarcity and implemented innovative approaches.
For example, the building code has changed post-drought years and now it is mandatory to have a water tank that harvests rainwater for every new house being built and the water is connected to the washing machine and garden. Also, all the street water (called stormwater) in the whole city is harvested and recycled back to use for parkland watering and in some instances homes.
In 2023, more than 40 billion liters were recycled through the wastewater system plants in various areas of the city. I really believe there is a synergy between Australia and Morocco to learn from each other in this sector in particular with the drought that Morocco is experiencing.
Morocco’s growing tourism industry also presents opportunities for Australian companies in the hospitality sector, including eco-tourism and sustainable hotel developments.
In addition, Australia’s education sector can tap into Morocco’s growing demand for higher education, offering programs and establishing campuses in Morocco, particularly in areas like renewable energy, automotive, and mining engineering.
What are the key factors making Morocco an attractive destination for Australian companies looking to invest, especially in light of the various incentives provided by Moroccan law?
Strategic Location: Morocco’s proximity to Europe, Africa, and the Middle East makes it a strategic entry point for these markets, offering easy access through well-developed ports and logistics networks. Political Stability and Reforms: Morocco has a stable political environment and a government committed to economic reforms, making it a secure destination for investment.
Investment Incentives: Moroccan law offers various incentives such as tax breaks, customs duty exemptions, and subsidies for investments in specific sectors like renewable energy, automotive, and aerospace.
Free Trade Agreements: Morocco’s extensive network of FTAs, including with the EU and African countries, allows for tariff-free access to significant markets.
For Australian investors and businesses, I often make remarks and the likeliness of Morocco to Singapore as a strategic hub and a crossroads of trade and finance. Most importantly, Morocco has well-equipped skill-based labor that is qualified to meet innovative industries.
In your opinion, how can Australian companies take advantage of Morocco’s strategic location as a gateway to Europe, Africa, and the Middle East?
Australian companies can take advantage of Morocco’s strategic location by:
Establishing Regional Hubs: Use Morocco as a regional hub to manage operations in Europe, Africa, and the Middle East. This can be particularly beneficial for industries like mining, logistics, and manufacturing.
Export Platforms: Set up export-oriented production facilities in Morocco to benefit from its trade agreements and competitive labor costs, allowing for tariff-free exports to multiple regions.
Partnerships with Local Companies: Form partnerships with Moroccan companies to tap into local market knowledge and networks, facilitating easier market entry into neighboring regions.
Are there specific Australian companies or industries that have already successfully entered the Moroccan market? What lessons can other Australian businesses learn from these examples?
Mining and Resource Companies: Some Australian mining companies have established operations in Morocco, attracted by the country’s mineral wealth and favorable investment climate.
Agricultural Firms: Australian agricultural firms have engaged in trading activities, particularly in wheat and other grains, taking advantage of Morocco’s strategic location and growing demand.
Adaptation to Local Markets: Successful companies adapted their products and services to meet local market demands and regulatory requirements.
Building Relationships: Establishing strong relationships with local partners and government authorities has been key to navigating the business environment in Morocco.
Morocco has a need for infrastructure development, and Australia is known for its expertise in this field. How can Australian companies capitalize on Morocco’s infrastructure demands, particularly in public tenders?
Australian companies can participate in public tenders, especially in infrastructure projects related to transportation, water management, and renewable energy. They should focus on building relationships with local partners to increase their chances of winning contracts.
Forming joint ventures with Moroccan construction and engineering firms can help Australian companies better understand local market dynamics and regulatory requirements, improving their competitiveness in public tenders.
Investment in Infrastructure Development Zones: Morocco has several infrastructure development zones offering incentives. Australian companies could invest in these areas to take advantage of tax breaks and subsidies while contributing to the country’s infrastructure growth.
Knowledge Transfer and Training: Australian companies can offer expertise in infrastructure project management and training to Moroccan counterparts, enhancing their appeal in public tender processes.
What is the action plan of AMBN to promote Morocco-Australia trade? And how do you perceive the Moroccan government’s collaboration in this endeavor?
AMBN’s main objective is to increase trade flow in both directions and facilitate the expedition of various opportunities that are available. We do this by providing comprehensive networking events in Australia and we have access to a wide database of businesses. Since our launch, we received overwhelming requests for participation in a trade mission to Morocco and we will convene one in the near future.
We also would like to work with the Moroccan government through different entities such as the Ministry of Investment and AMDIE to transform AMBN into a conduit between the flow of information and opportunities. AMBN can assist in expanding the brand “Morocco Now” in Australia and run webinars and networking events on their behalf.