In a move that largely flew under the media's radar, U.S. President George W. Bush pledged two months ago that he would seek to bind the United States and Morocco, which have been allies for more than two decades, in a free trade deal. The news is somewhat startling, given that the United States currently has free trade agreements with only a short list of countries, including Canada, Mexico, Israel and Jordan.
The deal with Morocco is really more about politics than economics. The country's only major exports are phosphates and low-tech electronics, and two-way trade with the United States totals $1 billion a year -- compared to $161 billion between the United States and Canada. But Morocco is also an important partner in the war against terrorism, and Washington is likely using it as an example for other nations to show the benefits of cooperating with the U.S. security agenda.
Using economic levers, including influencing International Monetary Fund policy, to achieve political goals is a time-honored tactic, one that Washington has been using more and more since Sept. 11. The IMF has recently continued to dole out cash to Turkey, a critical strategic ally, while cutting off much-needed funding to Argentina, which is not a major player in the anti-terrorism war.
The deal with Morocco is really more about politics than economics. The country's only major exports are phosphates and low-tech electronics, and two-way trade with the United States totals $1 billion a year -- compared to $161 billion between the United States and Canada. But Morocco is also an important partner in the war against terrorism, and Washington is likely using it as an example for other nations to show the benefits of cooperating with the U.S. security agenda.
Using economic levers, including influencing International Monetary Fund policy, to achieve political goals is a time-honored tactic, one that Washington has been using more and more since Sept. 11. The IMF has recently continued to dole out cash to Turkey, a critical strategic ally, while cutting off much-needed funding to Argentina, which is not a major player in the anti-terrorism war.