A structural change analysis of EU?Moroccan trade liberalisation and economic development between 1995 and 2010

In November 1995, the European Community launched the Barcelona Process, a comprehensive and multifaceted initiative aimed at strengthening political, economic, and social relations between the Community and neighbouring Southern Mediterranean States (MS). One of the initiatives introduced under the umbrella of this Process is the Euro-Mediterranean Partnership. Central to this Partnership is the creation of free trade agreements between the Community (and later the European Union) and each MS, and similar agreements between the MS themselves over the long term, in order to foster prosperity and engender socioeconomic development in the MS. This paper looks at one MS, Morocco, and refers to structural change theory in order to present a case that trade liberalisation is not the most appropriate strategy to help Morocco develop and attain better living standards. Specifically, trade liberalisation would inhibit Morocco's ability to diversify production and industrialise, which is a prerequisite to a successful developmental transition. The paper makes use of an international trade model to provide a theoretical explanation as to why liberalisation would encourage Morocco to specialise in producing and exporting agricultural products and light manufactures, both of which are unlikely to reap a substantial added economic value. This would prevent the Kingdom from attaining higher income levels and enhancing the living standards of its people.