RABAT, Oct 19 (Reuters) When French President Nicolas Sarkozy chose Algeria for his first state visit outside Europe in July, regional rival Morocco called off the next leg of his north African tour to show its displeasure.
It was a sharp early lesson in the complexities and pitfalls of Maghreb diplomacy and a reminder of what Morocco expects for being one of France's most steadfast allies in the Arab world.
On Monday, Sarkozy arrives in the kingdom on a three-day mission to smooth ruffled feathers, campaign for his proposed Mediterranean Union and salvage what he can in deals and diplomacy after a French magazine said Morocco was pulling out of a major contract for French combat planes.
''The Moroccans didn't understand Sarkozy's decision to visit Algeria first,'' said Olivier Roy, a director at France's CNRS national science research institute. ''This prestigious state visit will allow things to resume their normal course.'' US and Chinese investors are pushing for more business in north Africa, a region France has treated as its natural preserve since the colonial era.
For now France remains Morocco's main export destination, top supplier of imported goods and biggest foreign investor.
Last month, French carmaker Renault unveiled plans to build its biggest African plant near Tangier in Morocco's north.
Moroccans are among France's biggest ethnic minorities and most Moroccans speak French as a second language. But globalisation is starting to modify the old relationships.
Sarkozy has vowed a more pragmatic foreign policy than that of his predecessor Jacques Chirac, who nurtured close personal and business relations with a select group of African states.
The new president showed he wanted to broaden France's horizons when he intervened personally to help secure the release of six foreign medics from jail in Libya and then secured a batch of military and nuclear deals with Tripoli.
Morocco has also shown it favours hard-headed business priorities, cementing a free trade agreement with the United States and welcoming a flood of real estate investment from Gulf Arab states.
JET DEAL ON THE ROCKS Le Point magazine reported on Friday that France's sale of 18 Rafale fighters to Morocco was all but doomed after French arms officials fumbled over the million price per plane and tried to broaden the deal to include frigates and helicopters.
Morocco reportedly chose cheaper US built F-16s instead. If confirmed, it would be the third time the Rafale has lost out to US competition after defeats in South Korea and Singapore.
But it would be the first time the Rafale has faced such a challenge in France's own diplomatic back yard, losing business that Paris was widely expected to win.
The French president is expected to fly to Marrakesh for an official meeting with King Mohammed, followed by talks with new Moroccan Prime Minister Abbas El Fassi. On Tuesday he travels to the capital Rabat to address parliament, then Tangier where he will give a speech on his Mediterranean Union plans.
Morocco, which applied for European Union membership as far back as 1987, will be keen to hear more.
''Sarkozy is going to try and repair his policy towards north Africa, based on this concept of a Mediterranean Union,'' said George Joffe, a Maghreb expert at Cambridge University's Centre of International Studies.
REUTERS ARB PM1655