Some economic commentators outside the global market were divided regarding the impact and implication of the European action, which the European Commission justified in that it attempts to "defend 16,600 jobs" and "protect producers of these vehicles across EU countries" against what it described as "unfair trade practices." These were found on "an investigation concluding that the government of Morocco systematically assists the auto industry with incompatible subsidies under World Trade Organization provisions, including subsidies and loans on favorable terms as well as exemption and reduction from taxes."
Moroccan economists interviewed by Hespress believe that the European investigation places the "Chinese dragon" at the center of a "trade war" proclaimed against it by the Europeans and the Americans. Particularly because it was confirmed that "financial contributions were made to a Moroccan exporter in the framework of Chinese cooperation within the Belt and Road Initiative," and that "these unfairly subsidized imports caused damage to European industry from the same product."
The EU option makes sense in the context of large Chinese investments in Morocco's automotive industry, including production of automobile tires. This is coming in the context of rumor that tire manufacturing by Chinese company tires in Morocco is set to reach between 6 to 8 million tires at the end of this year with an aspiration of doubling such a level of production to 12 million by 2026, Chinese sources reported based on a research report.
"Not Surprising, but a Coded Message"
Badr Al-Zaher Al-Azraq, business and trade researcher and economic analyst, commented, "Such decisions are not unexpected, since Europe and the United States are engaged in an actual trade war against the electric vehicle industry, more precisely the Chinese one, remembering the circumstances surrounding the tide of losses accumulated by the car industry, particularly in Germany and to a lesser extent in France."
Al-Azraq confirmed, in response to a question from Hespress, that "this trend now to impose these types of duties by the European Economic Community countries as an anti-dumping measure is within the context of that war, and it is expected, especially since the Kingdom of Morocco has increasingly begun to attract significant and increasing Chinese investments in the automotive industry and automotive parts, whether in wheels, aluminum rims, batteries, etc., with promising opportunities for cooperation."
He continued, "I believe the European Union is trying to pursue its trade war today, but this could also be a hidden message aimed at Morocco to slow down its cooperation with China in the automobile industry."
He went on, "This is just the beginning. Unless there are understandings at the highest level between China, the United States, and Europe on market share and how the global market share is to be allocated to the major electric vehicle manufacturers in general, and most specifically to the large electric vehicle manufacturers, I believe this war will have more chapters in the coming days, where Morocco will end up having some role."
"The Influence of a Reality and an Unlikely War"
On the contrary, Nabil Boubrahimi, professor of international economics at Ibn Tofail University in Kenitra, ruled out the possibility of a "trade war scenario" in the classical definition of the term. He explained that Morocco is not yet impacted by the European Union, bearing in mind that it remains Rabat's number one trading partner, even though it is running a trade deficit in the Europeans' favor of $8 billion out of Morocco's total trade deficit with the rest of the world amounting to $28 billion.
In an interview with Hespress, Bouabrahimi believes that "the imposition of duties on aluminum tires by Morocco falls within the EU's full application of so-called trade defense instruments to protect its industry and ensure equal competitive opportunities with its local producers." He continued that "this decision was not spontaneous, but was preceded by a year of consultation between the European and Moroccan sides, and the imposition of an interim duty in the context of combating dumping and protecting local markets, under the pressure and request of European producers."
The span varies between 5.6 percent for products backed by Moroccan finances and 31.4 percent for those backed by Moroccan-Chinese finances under the Belt and Road Initiative.
He believes that "the European decision will challenge the chances of Moroccan exporters of auto parts who deal with major European producers since profit margins will be sacrificed, especially due to the fact that such a product is a very important product in the value chains for the automotive industry for exported goods. Meanwhile, it may boost the percentages of exporters competing with Morocco for the same products from Asia, which are renowned for their competitiveness and high performance."
"Applying the European additional duty to the first shipment of Moroccan exports will realize a certain reduction in quantity and value of exports, and threat the potential of reducing the trade deficit," said the international trade expert, noting that "Morocco applies anti-dumping tariffs to some imported products to encourage and protect its local industry."
source hespress
