Marrakesh, Morocco - French President Nicolas Sarkozy kicked off a visit to Morocco with a deal to sell a high-speed rail network, but officials all but conceded the loss of a major fighter plane order.
King Mohammed met Sarkozy at Marrakesh airport on Monday with a customary welcome of milk and dates, and the two travelled along streets lined with waving crowds and traditional musicians to his royal palace, where they witnessed the signing of accords covering trains, defence equipment and atomic power.
The biggest was a tentative €2-billion deal for a group of firms led by France's Alstom SA to build what Morocco says is the Arab world's first high-speed rail network, linking the cities of Tangier and Casablanca.
The first section would be operational in 2013.
Sarkozy's relations with Morocco got off to a shaky start following his May election when he chose regional rival Algeria for his first visit outside Europe.
Morocco responded by scrapping the Moroccan leg of his North African tour, a setback for a president who had already made few friends in Africa with his hard line position on immigration.
Monday's glittering royal welcome offered to Sarkozy and the flurry of deals appeared designed to draw a line under the rare spat between the two strong allies.
Morocco signed an accord with French firm Areva covering the extraction of uranium, which Paris said paved the way for cooperation with Rabat on civilian nuclear energy.
A French government spokesperson said Morocco also agreed to buy a FREMM class frigate and asked France to modernise 25 of its Puma helicopters and 140 armoured vehicles.
Other agreements included a prisoner transfer accord, a research partnership covering the extraction of uranium from phosphoric acid and the sale of 20 French freight locomotives worth 70 million euros.
But the deal making was overshadowed by an indication that Morocco had decided not to buy 18 French Rafale fighter planes, choosing cheaper US-built F-16 jets instead.
"It has not progressed - you can't have it all," a source close to the French president told reporters in Marrakesh. "Will there be other (Rafale orders) in the future? That depends on the financing the Moroccans want to put into it."
Morocco was one of the most likely export clients for the Rafale, which costs around $60-million apiece. Failure in Morocco would mean the plane had lost out three times to US competition after defeats in South Korea and Singapore.
Sarkozy was accompanied by a delegation of 70 French business leaders aiming to bolster France's strong commercial presence in its former colony as US and Chinese investors make an unprecedented push into Africa.
France remains Morocco's main export destination, top supplier of imported goods and biggest foreign investor. Last month, French car manufacturer Renault unveiled plans to build its biggest African plant near Tangier.
Sarkozy travels to the Moroccan capital Rabat on Tuesday where he will address parliament, then heads north to Tangier to give a speech on his plans for a union of Mediterranean states.
The initiative could supersede the faltering Barcelona Process, aimed at boosting cooperation among Mediterranean countries and creating a free trade area by 2010, a goal that now looks unreachable.
The plan fits with Sarkozy's emphasis on curbing illegal migration by working with African countries to improve their economies and create jobs to allow young people to stay put.
Morocco supports the idea but past efforts to narrow the north-south wealth gap have been held back by weak trade ties, political stagnation and animosity among southern Mediterranean states.