South Korea's Trade Minister Highlights Urgent Need for Free Trade Agreement with Morocco
The South Korean Minister of Trade, Yoo Han-koo, has expressed concerns regarding the competitive challenges faced by Korean companies in Morocco under the current circumstances. He emphasized that these challenges necessitate the acceleration of efforts to establish a free trade agreement (FTA) between South Korea and Morocco by mid-2027. This agreement is seen as a crucial step towards leveling the playing field for South Korean businesses attempting to penetrate the Moroccan market.
Yoo pointed out that the existing tariffs on Korean components hinder local companies from utilizing Morocco as a manufacturing base for automotive and battery production, as well as other goods aimed at the European market. In contrast, competitors from other countries benefit from duty-free imports due to their free trade agreements, putting South Korean firms at a significant disadvantage. He stressed that a comprehensive economic partnership agreement, which includes provisions on tariffs, investment, and public procurement, is the only framework capable of ensuring fair competition among economic players. The absence of such a framework significantly diminishes the competitiveness of Korean enterprises in the Moroccan market, as reported by "Hespress," a Moroccan news outlet.
Investment Landscape and Trade Imbalance
Highlighting the competitive landscape, Yoo noted that China has significantly strengthened its investment presence in Morocco's battery sector in recent years. The volume of trade between China and Morocco is approximately nine times greater than that between South Korea and Morocco. Additionally, countries like India and Japan have outpaced South Korea in terms of industrial and commercial presence in Morocco, placing Seoul in a position that falls short of expectations. He acknowledged that South Korea is not fully capitalizing on the available opportunities within the Moroccan market, but mentioned that the Korean government is actively working to close this gap, especially as Morocco prepares to launch major infrastructure investments associated with hosting the 2030 World Cup.
Yoo Han-koo revealed that Hyundai Rotem, a South Korean company, successfully secured a significant contract worth $1.5 billion in 2025 to supply trains to the National Office of Railways in Morocco. He regarded this achievement as a model for what Korean companies can accomplish in Morocco, indicating that there are potentially hundreds of similar opportunities available. Furthermore, he highlighted that public procurement poses an additional challenge for companies from nations without trade agreements with Morocco, exacerbating the competitiveness gap within the local market. Despite the increasing South Korean investments in Morocco, Yoo noted that they remain commercially inadequate in the absence of a comprehensive regulatory framework.
In a collaborative effort, trade ministers from both countries, along with Morocco's Minister of Investment, have agreed to establish a working group and initiate formal negotiations before the end of the current year. This initiative aims to expedite the process of reaching a comprehensive agreement. Additionally, United Nations trade data revealed that Morocco's exports to South Korea totaled $61 million in 2024, while imports reached $908 million, resulting in a trade deficit of approximately $847 million in favor of Seoul. Korean exports to Morocco are predominantly composed of electronics, machinery, and vehicles.
As reported by alarabiya.net.
