Switzerland and Liechtenstein: December 2000
The Trade Policy Review Body of the World Trade Organization (WTO) concluded its third review of Switzerland (and the first review jointly with Liechtenstein) on 4 and 6 December 2000. The text of the Chairperson's concluding remarks is attached as a summary of the salient points which emerged during the discussion.
POLICY REVIEW BODY: REVIEW OF SWITZERLAND AND
The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member countries at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.
The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the country's trade policies, including its domestic laws and regulations, the institutional framework, bilateral, regional and other preferential agreements, the wider economic needs and the external environment. A record of the discussion and the Chairperson's summing-up together with these two reports will be published in due course at the complete trade policy review of Switzerland and Liechtenstein and will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bahrain (2000) Bangladesh (1992 and 2000), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992, 1996 and 2000), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996 and 1998), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995), C˘te dIvoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995, 1997 and 2.000), Fiji (1997), Finland (1992), Ghana (1992), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995, 1998 and 2000), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2000), Lesotho (1998), Macau (1994), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991, 1996 and 2000), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru (1994 and 2000), the Philippines (1993), Poland (1993 and 2000), Romania (1992 and 1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991, 1996 and 2000 (with Liechtenstein), Tanzania (2000), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996 and 1999), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).
TRADE POLICY REVIEW BODY: REVIEW OF SWITZERLAND AND LIECHTENSTEIN
CONCLUDING REMARKS BY THE CHAIRPERSON Back to top
We have had a comprehensive, open and informative discussion of the trade policies and practices of Switzerland and Liechtenstein. Members were encouraged by the good performance of the Swiss and Liechtenstein economies since 1997. They attributed this performance largely to sound macroeconomic policies and structural reforms, which have contributed to a better allocation of resources and further exploitation of the comparative advantages of both Switzerland and Liechtenstein. Noting that growth, particularly in its early stages, had been export led, Members pointed to the important role of the multilateral system in keeping markets open to Swiss and Liechtenstein products. They urged Switzerland and Liechtenstein to continue the reforms, mainly in the highly protected sectors (agriculture, and electrical and gas utilities in particular), in order to reduce costs and market rigidities to the benefit of their economies and of the multilateral trading system.
Members commended Switzerland and Liechtenstein for their active participation in the multilateral trading system, with several welcoming their support for the launching of a new round of negotiations with a broad agenda; they appreciated the continued role played by Switzerland as the host country for the WTO. Pointing to the increasing participation of Switzerland and Liechtenstein in preferential trade agreements, Members sought assurance that such agreements would be WTO-consistent. The functioning of the Swiss-Liechtenstein customs union, including the Market Control and Surveillance Mechanism (MCSM) established by Liechtenstein following its EEA membership, also attracted interest.
Members noted that the tariff consisted exclusively of specific duties, with high-ceiling bindings in agriculture and clothing. They asked about prospects for a simplification of the tariff, including a move to ad valorem rates. Questions were also raised about customs valuation practices, particularly for internal taxation purposes. Most Members posed questions about standards and technical regulations, including labelling, sanitary and phytosanitary requirements, and on the links between environmental protection and international competitiveness of locally-produced goods. The need for greater market access to developing countries and LDCs was stressed. In the area of competition policy, some concern was expressed about the tolerance of dominant positions and about the lack of automatic sanctions against unlawful restraints.
On sectoral policies, Members recognized the liberalization initiatives taken by Switzerland and Liechtenstein under the Agricultural Policy 2002. However, many Members were concerned about the high level of tariff protection and government support (including export subsidies) for agriculture, which they deemed disproportionate to the share of the sector in GDP and employment. They suggested that legitimate non-trade concerns in agriculture be addressed through measures that would not unduly distort production and trade.
Members also sought further clarification on a number of issues, including:
pursuit of macroeconomic reforms;
lack of economic data for Liechtenstein;
regulations on foreign direct investment, including residency requirements;
tariff quotas on agricultural imports and their administration through non-automatic licensing, including the "Prise en charge" system;
non-use of contingency trade remedies;
protection of intellectual property, including geographical indications;
government procurement, including regulations on threshold values, and on purchases by cantons and municipalities;
further structural reforms in the services sector, including professional services; and
consultation with civil society.
Members appreciated the comprehensive responses provided by the Swiss and Liechtenstein delegations to most questions raised during the meeting.
In conclusion, it is my feeling that this joint Review has allowed us much better understanding of the customs union between Switzerland and Liechtenstein. We have come, I think, to a deeper appreciation of Switzerland and Liechtenstein's trade policies and practices, and the environment in which they are framed and conducted. The large number of questions and comments reflected the widespread interest of Members in this regard. Members were encouraged by the ongoing economic performance in both countries. The active participation of Switzerland and Liechtenstein in the WTO seems to me to be central to their trade liberalization efforts. Members encouraged Switzerland and Liechtenstein to maintain the momentum of the reforms, even on an unilateral basis. They urged both countries to ensure that their bilateral and regional arrangements be WTO-consistent.