Peter Foster

There is nervousness in Brussels and certainly a desire to send a signal that they don't want Morocco and indeed other North African countries, Egypt, Algeria, to become proxy surrogates for Chinese dumping.

Well, two things.

One is that Morocco has seen a massive uptick in investment from China, about $6 billion over the last three years.

The second issue is that Morocco has a trade deal with the European Union, and therefore things that are made in Morocco can enter the European Union without paying a tariff.

Now, in the case of an automobile or automobile parts, very often the EU has tariffs on those goods that are coming direct from China.

And so the worry is that Morocco might be becoming a backdoor where stuff from China goes into factories in Morocco, gets to some degree made into something else, and then shipped on tariff-free into the EU.

And it's more about the potential scale of this, given the scale of the Chinese investment, I think, that is unsettling officials in Brussels.

So I went to an investment conference in Casablanca where nearly 100 Chinese companies were listening to the pitch from the Moroccan government about why they should come and invest in Morocco.

There are tax breaks.

There is plentiful labor, green energy, and, of course, access to those trade deals that I just mentioned.

So Moroccan business groups, they're getting delegations two to three a week

Now, what does that translate into?

Well, we went out about 25 miles south of Tangier, the big port city, where rising out of these scrubby hills is a new industrial park, where a lot of these Chinese companies are building factories, both to create parts that are going to be shipped into the European automobile supply chains, but also parts that could go to the two European car makers there.

Renault, the French maker, and Stellantis that owns Peugeot and other brands that have factories in Morocco.

first thing they can do is they can impose quotas and actually put up what they call anti-dumping duties.

And indeed, they did that on a case that was settled last year on aluminium wheels.

And they said that these aluminium wheels were being subsidised both by the Moroccans unfairly and by the Chinese through this thing called the Belt and Road Initiative, which is

China's outbound investment strategy scheme, and they slapped 40% odd tariffs on these aluminium wheels.

So they can do more of that.

The second tricky thing is that under a trade deal, in order for a good that's made in Morocco to take advantage of the EU-Morocco trade deal and enter the EU tariff-free, the good has to be actually made in Morocco.