Trade Win No. 9
The success of service sector reform in Morocco
Morocco’s service sector reforms over the past 25 years helped to unleash inclusive growth, specifically growth in small and medium businesses, an increase in the women’s share of services employment, and a shift in export portfolios towards higher value-added services.
While Morocco’s General Agreement on Trade in Services (GATS) commitments were modest at first, more ambitious commitments eventually followed. From opening its telecommunications market to entering more ambitious agreements such as the US-Morocco FTA in 2004, Morocco developed a more conducive trade and investment climate.
Morocco’s experience illustrates the multiplier effect: between 2015 and 2023, women’s share of services employment increased from 31.3 percent to 38.7 percent, while agricultural employment fell and industry inched up. At the same time, export portfolios shifted from low value commodities toward digital services, tourism and services intensive manufacturing such as automotive, aerospace and electronics, contributing to higher productivity and greater resilience to external shocks.
Other economies across the Middle East and North African (MENA) region can emulate Morocco’s success. MENA’ s persistently low female labour force participation (around 20 percent) reflects structural barriers that hamper both inclusive growth and economic diversification. Expanding services trade therefore offers a dual opportunity for MENA: to both integrate more women into productive employment and to accelerate productivity gains through sectoral diversification.
There is untapped potential for services trade in the MENA region. In 2019, women held 7.2 percent of export related jobs in OECD countries, compared with only 1.1 percent in Egypt and 0.4 percent in Saudi Arabia. Within the OECD, 55 percent of those female export-related jobs were in business services—an area where MENA economies remain underrepresented. Thus, scaling up services exports can create high-skilled, flexible employment that helps to close the gender gap.
Moreover, efficient services are crucial inputs in manufacturing, agriculture and high-tech value chains. Liberalizing these inputs increases efficiency across the entire economy, which can create significant welfare gains.
In conclusion, Morocco’s success in service sector reforms offer key insights on accelerating services and digital trade. Other MENA countries would benefit from reorientating their national strategies towards trade in services. Good starting points include policies based on solid data collection and diagnostics, the identification of women-friendly sectors and assessments of digital skills needs.
