Higher Import Tax On Textiles In Morocco

Protectionist measures came after Morocco's huge trade deficit with Turkey. Rabat (capital of Morocco) - Morocco will impose a 36% import tax on imports of Turkish textiles and clothing products, replacing the previous 27% import tax.

The new measures, aimed at supporting the domestic textile industry, took effect on Monday, July 27. This part of the tax bill was approved by the Moroccan finance parliament earlier this month.

The new tax rate was announced in a statement Monday by the customs and indirect tax administration of Morocco's Ministry of economy. Morocco's decision to increase import taxes is aimed at promoting local production, especially during the new coronal pneumonia pandemic. Protectionist measures also want to limit textile imports, which compete fiercely with domestic products.

Morocco and Turkey signed a free trade agreement in 2004. The agreement came into force two years later, in 2006. Since then, Morocco's trade balance with Turkey has been in deficit. Elalamy, Morocco's minister of industry, revealed that Morocco's trade agreement with Turkey lost $2 billion a year.

Elalamy revealed that in 2017 alone, the Turkish textile industry lost Morocco about 44000 jobs. In early 2020, Rabat and Ankara began negotiations to review their free trade agreement.

"Morocco and Turkey will review the free trade agreement. "Turkey will try to bring industrial investors and investors from other sectors to Morocco," elalamy told the press after high-level talks with Turkish officials. However, talks between the two countries have been suspended due to the outbreak of new crown pneumonia.

Although Morocco's new protectionist import tax is expected to support the domestic textile industry, how Turkey will respond remains to be seen.

Some Turkish companies that will be directly affected by the new tax rate include clothing brands LC Waikiki, koton and, in fact, retail company BIM