Diplomatic Tensions Rise: Morocco-Spain Relations at Risk, Experts Warn of Economic Fallout

In an interview with Maroc Diplomatique, Nabil Adel and Mohamed Badine El Yattioui looked at the economic consequences if the relations between the two allies were to further deteriorate. Spain is Morocco’s first commercial partner, with trade between the two countries representing almost a third of Morocco’s foreign trade, notes Mohamed Badine El Yattioui, who recalls that Spain has surpassed France about six years ago in commercial terms.

Morocco is Spain’s first African customer and its second global customer outside the European Union. It is therefore an essential partner. Beyond trade, Spain is the third contributor in terms of FDI, behind France and the United Arab Emirates. But he points out that if Morocco decides to break diplomatic ties, economic relations will not be automatically impacted.

El Yattioui explains that investments are governed by private law. "There would be a slowdown in future investments, but contracts already signed and investments that have already taken place will not be interrupted overnight." Thus, "if we have industrial projects between Morocco and Spain with production units in Morocco, these will not disappear," he adds. On the other hand, what could happen is that if Morocco decides to break off relations with Spain, "future investments and ongoing projects under negotiation will most likely be suspended."

As for Nabil Adel, he believes that the impact would be a little tougher for Morocco than for Spain if this were to happen, but he recalls that a diplomatic breakdown does not mean a halt in economic relations. "There will be a recall of ambassadors, explanations, but I don’t think it will last. The scenario of a breakdown is extremely low and neither of the two neighbors would want things to go that far, given the stakes." But if it did happen, "Morocco would assert other cards than those of the economy, particularly in the security and migration fields, so Spain would lose much more."

While tensions seem to be intensifying day by day, particularly after the departure of the Moroccan ambassador to Spain, Karima Benyaich, who reacted to the "inappropriate" remarks of Spanish representatives, Nabil Adel believes that the crisis is heading more towards a resolution than a deadlock. "Morocco has obtained what it wanted, namely that it be heard by a judge and that is what will happen on June 1."

For El Yattioui, these tensions could represent an opportunity to get closer to the United Kingdom due to its proactive strategy since Brexit and because of its dispute with Spain over Gibraltar. An argument that the economist Nabil Adel nevertheless nuances, according to whom "it is not tomorrow that a British customer will be able to replace a Spanish customer, it takes time to set up." He recalls that it took several decades to reach the level of these relations with Spain.

Many are also wondering what could happen to Moroccans residing in Spain. For El Yattioui, this should have no impact. Moroccans on the spot will not be affected, as a significant number hold Spanish nationality, he points out. Nor does he fear for the safety of Spanish nationals in Morocco. "What would be more complicated is at the level of Spanish society, Moroccans could suffer discrimination, racism," he said.