WORLD TRADE  
ORGANIZATION  WT/REG273/2 
7 March 2011  
 
 (11-1129) 
Committee on Regional Trade Agreements Original:   English 
  
 
ECONOMIC PARTNERSHIP AGREEMENT BETWEEN JAPAN AND SWITZERLAND  
(GOODS AND SERVICES) 
 
  The following communication, dated 4 March 2011, is being circulated at the request of the 
delegations of Japan and Switzerland. 
  This document reproduces the questions addressed to the Parties and the responses submitted.  
_______________ 
 
 
Questions from the Delegation of Brazil
 
 Trade in Goods (I):  Regulatory provisions on trade in goods (E)
 
 
1. The Japan-Switzerland Agreement does not establish commitments beyond those that 
are already laid out in the SPS Agreement of the WTO.  Furthermore, it does not allow an issue 
involving SPS to be taken to the dispute se ttlement mechanism created by the Agreement.   
What criteria justifies the exclusion of SPS issues from the dispute settlement 
mechanism? 
 Chapter for Dispute Settlement of this Agreem ent does not fit in the concept of SPS Chapters, 
the main objectives of which is enhancement of cooperation. It is therefore not necessary, nor 
adequate to apply the dispute settlement proce dures under this Agreement to SPS and TBT Chapters. 
 Questions from the Delegation of Colombia
 
 Provisions on trade in services and investment (IV): Scope and Definitions (A)
 
 
2. "The scope of Chapter 6 (Article 43) covers measures by a Party affecting trade in 
services taken by central, regional or local governments and authorities as well as by 
non-governmental bodies in the exercise of pow ers delegated by central, regional or local 
governments or authorities.  It applies to all services sectors.  In respect of air transport 
services, Chapter 6 does not apply to measures aff ecting traffic rights.  Moreover, MFN, market 
access, and national treatment provisions in  Chapter 6 do not apply to government 
procurement." 
In saying that MFN, market access, and na tional treatment provisions do not apply to 
government procurement is it to be understood that the other disciplines in the Chapter do apply to government procurement?  In this  respect, please clarify whether government 
procurement is totally excluded from the scope of Chapter 6 or only from the disciplines 
mentioned. WT/REG273/2 
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   With regards to laws, regulations or requirements governing the procurement by 
governmental agencies of services purchased for governmental purposes and not for commercial 
resale or for use in the supply of services for commercial sale, only the articles on MFN, market access and national treatment of Chapter 6 do not apply.  3. Does Chapter 6 cover subsidies? 
 
Chapter 6 does not contain any provision that would exclude subsidies from the scope of the 
chapter.  4. "Chapter 9 of the Agreement covers Investment.  In the event of inconsistency between 
investment-specific provisions in Chapter 9 and di sciplines in Chapter 6, Chapter 6 prevails to 
the extent of the inconsistency.  The disciplines of Chapter 9 related to national treatment (Article 87), MFN treatment (Article 88) and the prohibition of performance requirements (Article 96) are not applicable to the non-confor ming measures listed by the Parties in Annex IX 
of the Agreement (Appendix 1 for Japan's no n-conforming measures, and Appendix 2 for 
Switzerland's non-conforming measures).  Annex IX forms an integral part of Chapter 9." 
Is it to be understood that Chapter 6 applies to mode 3 and the other modes of supply in 
the services sector and Chapter 9 to all other sect ors of the economy, i.e. non-services sectors? 
 Chapter 6 applies to all four modes of supply of services as in the GATS. Chapter 9 applies to 
measures adopted or maintained by a Party relating to investments of the other Party and to their 
investments in all sectors of the economy.  Howeve r, with regard to measures by a Party affecting 
trade in services, Chapter 6 shall prevail to the extent of the inconsistency.  
 
Provisions on trade in services and investment (IV): Measures affecting trade in services (B); 
National and MFN treatment  
 
5. "Japan and Switzerland grant each other national and MFN treatment for trade in 
services.  This does not apply to the measures listed as non-conforming  in Annex III of the Agreement.  With respect to MFN treatment, the Parties shall endeavour to accord each other 
treatment no less favourable than that pr ovided under other preferential agreement they 
conclude or amend with a non Party, which they would notify under GATS Article V or 
GATS Article V bis." 
Will the MFN exemptions listed for each co untry on the basis of GATS Article II 
continue to be applied under the present Agreement?  
 Measures inconsistent with the article on MFN under Chapter 6 are specified in the lists of 
reservations, independently of the MFN exemption list under GTAS article II. 
 
Provisions on trade in services and investment (IV): Measures affecting trade in services (B); 
Market access  
 6. "The Parties grant each other access to th eir respective markets for their services and 
service suppliers, unless otherwise specified in their Lists of Reservations in Annex III of the 
Agreement.  They also commit to allow cross-border movement of ca pital when it is an essential 
part of a service supplied through modes 1 and 3 - unless otherwise specified in the Lists of Reservations." 
 
  WT/REG273/2 
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  Is any sort of connection made between Chap ter 9 and the market access discipline in 
Chapter 6 in such a way that this discipline also applies to the Chapter on investment?  We ask this question since such a link is made in th e NAFTA-type chapters on services and investment 
in certain trade agreements. 
 No, the article on market access under Chapter 6 applies to trade in services covered by this 
Chapter only. The Chapter on Investment does not contain any provision that would create 
preferential access to market but aims at removing discrimination on investors and investments through NT, MFN provisions.   
Provisions on trade in services and investment (IV): Measures affecting trade in services (B); 
Movement of natural persons  
 7. "Chapter 7 reflects the preferential trading relationship between Japan and 
Switzerland, the desire of the Parties to fac ilitate the movement of natural persons on a 
mutually beneficial basis and to establish tran sparent criteria and procedures for the movement 
of natural persons, and the need to ensure bord er security and to protect the domestic labour 
force and permanent employment in either Party (A rticle 63).  Each Party committed to apply 
its measures relating to movement of natura l persons expeditiously so as to avoid unduly 
impairing or delaying trade in goods or servic es or the conduct of investment activities under 
the Agreement.  The Parties also committed to limit any fees for processing applications for 
entry and temporary stay to the approximate cost of services rendered." 
On the basis of this paragraph, can it be interpreted that this matter goes beyond what 
is established in the GATS by covering not only service suppliers but also persons linked to investment and trade, who need to move to the other country temporarily to conduct their 
activities? 
 Chapter 7 applies to measures affecting the move ment of natural persons of a Party who enter 
and stay temporarily in the other Party. The scope of  this chapter is determin ed independently of the 
GATS.  
8. "In relation to the non-services sectors, and notwithstanding any provision of Chapter 7 
(on the movement of natural persons), commitments  shall be in accordance with and subject to 
the relevant legislation of Switzerland, in particular the Federal Law on Foreigners and any of 
its subordinate acts.  Moreover, the numerical ceiling provided for under Swiss Law shall not be 
applied to natural persons of Japan in the categories defined under Switzerland's specific 
commitments for the movement of natural person s in relation with the non-services sectors.  
Table IV.2 summarizes Switzerland's specifi c commitments on the movement of natural 
persons." 
From the above paragraph, can it be interp reted that with regard to the movement of 
persons there is differentiation in the application of Swiss legislation for the case of non-services 
sectors? 
 Because the GATS obligations are embodied in the Swiss legislation, a specific regime 
applies under Swiss legislation for services compared  to non-services and this is reflected in the 
Agreement.  
 
    WT/REG273/2 
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  Provisions on trade in services and investment (IV): Denial of Benefits (C)
 
 9. "Chapter 6, 7, and 9 do not contain any specific provisions on denial of benefits." 
Having no denial of benefits clause would mean that any service supplier or investor, 
even where it has no substantial commercial  business in the other Party, could access the 
benefits of the Agreement.  Please confir m whether this interpretation is correct. 
 By virtue of the Articles on Definitions of  Chapter 6 and 9, only juridical persons and 
enterprises which are engaged in substantive bu siness operations/activities are covered by the 
Agreement.  Provisions on trade in services and investment (I V): Liberalization Commitments in Trade in 
Services and Investment (D)  
 10. "For trade in services, as for investment, the Parties have adopted a negative-list 
approach to the scheduling of their liberalization  commitments, through Lists of Reservations.  
This implies that all sectors or sub sectors are a ssumed to be open to competition from services 
providers or investors of the other Party unless otherwise specified in the relevant Annexes of the Agreement." 
(a) Does the negative list contain both a s ection for existing measures and a section 
for future measures? 
 With respect to trade in services, Switzerla nd has a single list of reservations encompasses all 
measures that do not conform with the obligations  imposed by any provisions of the articles on MFN 
(Article 459, market access (Article 46) and national treatment (Article 47). 
  Japan has two types of lists of Reservations on the same articles.  One covers the reservations 
taken by Japan with respect to existing measures th at do not conform with the obligations imposed by 
any provisions of the articles on MFN (Article 459, market access (Article 46) and national treatment 
(Article 47).  The other covers the reservations taken by Japan with respect to specific sectors, 
subsectors or activities for which it may maintain exis ting or adopt new or more restrictive measures 
that do not conform with the obligations imposed by any provisions of the articles on MFN (Article 
459, market access (Article 46) a nd national treatment (Article 47). 
 
 With respect to Chapter 9 (Investment), two ty pes of reservation lists exist for each Party. 
One covers the existing non-conforming measures and the other covers the future non-conforming 
measures. 
 
(b) Does the negative list make explicit referen ce to the domestic legislation of each 
Party which underpins the existing measures? 
 Measures identify the existing laws, ordinances, regulations or other measures with respect to 
which the reservations are taken. 
 
(c) Is the Agreement's negative list approach based on the so-called "ratchet 
clause"? 
 Chapters 6 and 9 do not contain any ratchet clause.  
 
 
  WT/REG273/2 
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  11. "In the Agreement, trade in services and investment are governed by separated 
provisions contained in Chapter 6, for trade in  services, and in Chapter 9, for investment. 
Though there are some overlaps in terms of coverage, the scope of the two Chapters is distinct. It should be recalled that the disciplines on investment may cover, for example, investment related to trade in goods." 
What overlaps might exist between the Chapter on services and the Chapter on 
investment? 
 Chapter 9 applies to measures adopted or mainta ined by a Party relating to investments of the 
other Party and to their investments in all sectors of  the economy.  However, w ith regard to measures 
by a Party affecting trade in services, Chapter 6 sha ll prevail to the extent of the inconsistency.  
 
Questions from the Delegation of the European Union
 
 Trade in Goods (I): Import duties and charges, and quantitative restrictions (A)
 
 
12. In spite of the very long transition period  until 2024, Japan still maintains high average 
final tariffs not only on primary agriculture pr oducts, but on "prepared foods" products as 
well, the latter having the highest average final tariff at 21.3% even in 2024. 
(a) Could Japan confirm whether this Agreement aims to promote bilateral trade 
with Switzerland in all sectors of the economy, including agriculture? 
 Yes.  Japan is of the view that its libera lization commitments should be substantial and be 
consistent with the WTO benchmark, i.e. liberali zation of tariffs on “substantially all the trade.”  
With this principle in mind, certain tariff lines were indeed excluded from the elimination given the 
possible impacts on the domestic industries. 
 
(b) What are the initiatives and concrete measures that Japan has undertaken to 
increase access to its agricultural sectors in this FTA?  
 For example, Japan eliminated customs duties on instant coffee, aroma oil, and food additives 
(pectin) on the date of entry into force.  Customs du ties on wine will be eliminated in stages and tariff 
rate quota for some registered natura l cheeses of Switzerland are applied. 
 
(c) Could the Parties explain how this Agree ment will create new opportunities to 
increase bilateral trade on agricultural products?  Please provide concrete 
examples.  
 The Agreement provides improved market ac cess opportunities for products of specific 
interest to the Parties such as dried beef, register ed natural cheese, chocolate, waffles and wafers, 
fruits, wine, sake (rice wine) etc. by allocating quotas and/or tariff reductions. 
 
Provisions on trade in services and investment (IV): Scope and definitions (A)  
 
13. In the Agreement, trade in services and the liberalisation of investment are governed by 
separated provisions contained in Chapter 6 for trade in services, and in Chapter 9 for 
investment, and there is some overlaps, for instance, in terms of coverage.  
 
Where there any consideration to negotiate a single chapter covering disciplines to 
liberalize both trade and investment in a harmonized way?   
 No.  WT/REG273/2 
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  Provisions on trade in services and investment (I V): General provisions on trade in services and 
investment (B)  
 14. Section 1 of Appendix 1 of Annex III of th e Agreement contains Japan's reservations 
setting out existing measures that do not conform to some or all of the obligations taken relating 
to national and MFN treatment and market acc ess. It represents a standstill commitment, as 
Japan will be able to maintain, review, or amend the existing measures listed that do not comply 
with these obligations, but will not be able to ma ke these measures more r estrictive. Section 2 of 
Appendix 1 of Annex III contains Japan's reservations setting out specific sectors, sub-sectors or activities for which it may maintain existing , or adopt new or more restrictive measures that 
do not conform with some or all of the oblig ations taken under the Agreement relating to 
national and MFN treatment and market ac cess. It represents a broader carve-out than 
reservations contained in Section 1. Japan has 20 reservations in Section 2.   
(a) With regard to Section 1, why has Japan lodged reservations for residency 
requirement (in some wholesale and retail trade activities for example); and a 
possible limitation on the number of licences conferred to service suppliers (in 
some distribution services for example)? 
 Japan has not lodged any reservations for reside ncy requirement.  With regard to limitations 
on the number of licences, Japan has lodged reser vations based on measures stipulated under the 
relevant existing laws in relevant service areas.  These reservations (if any) are based on measures 
stipulated in the existing laws in relevant service areas.  
(b) With regard to section 2, could Japan expa nd on the scope and justifications for 
inscribing reservations for aerospace i ndustry, financial services (banking, 
insurance), manufacturing, and social serv ices? In particular what does Japan 
have in mind with "manufacturing" and "social services"?  
 "Aerospace industry” covers m achine repair related to aircraft  industry, satellites and rockets. 
"Financial services(banking) covers banking and other financial services(excluding insurance). 
"Financial services(insurance) covers insuran ce and insurance-related services. "Manufacturing” 
covers services incidental to aircraft industry,  explosives industry, arms industry and aerospace 
industry. “Social services” covers services related to income security or insurance, social security or 
insurance social welfare, public training, health and child care. 
  Japan reserves the right to main tain existing, or adopt new or more restrictive measures that 
do not conform with obligation imposed by Article 45, 46, and 47 for these sectors. 
 15. Section 1 of Appendix 1 of Annex IX of th e Agreement contains the Reservations made 
by Japan setting out existing measures that do no t conform with some or all of the obligations in 
the Agreement relating to national and most-favoured-nation treatment, and/or performance requirements. 
Japan has 22 reservations under Section 1.  On e of these applies to all sectors in relation 
with non-conforming measures taken by local g overnments other than prefectures, with regard 
to provisions on MFN and national treatment as well as on performance requirements in 
Chapter 9.  This reservation seems wide and far reaching. 
Could Japan confirm whether there is a precise  list of all such non-conforming measures 
taken by local governments?   WT/REG273/2 
 Page 7 
 
 
   At prefectural level, Japan commits its oblig ation under the Agreement without any specific 
reservation.  Other provisions of the agreement (V): Intellectual property rights
 
 16. Article 119.3 (a) provides that "each Party sh all provide the legal means for interested 
parties to prevent […]" 
(a) What are the legal means put at the disposal of interested parties in order to 
implement this provision? 
 Japan: Japan implements Art. 119.3(a)(i) and (ii) through the Unfair Competition Prevention 
Act (Item 13,Paragraph 1 Article 2,  Article 3 and Article 4) and 1 19.3(a)(iii) through "Standard for 
Indication in Relation to Geographical Indicati ons” which is based on the Act Concerning Liquor 
Business Association and Measures for Securing Reve nue from Liquor Tax. Note that the obligations 
prescribed by Article 22.2 and 23.1 of TRIPS agreement are also implemented through the same 
legislation respectively. 
  Switzerland: In Switzerland, civil, criminal, administrative (as applicable) and border enforcement procedures are at the disposal of in terested parties to prevent use of geographical 
indications which conflic t with Article 119 JSEPA. 
 
(b) Are these legal means also at the disposal  of interested parties representing a GI 
from any other WTO Member?  
 Yes. These legal means are also at the dispo sal of interested parties representing a GI from 
any other WTO Member.  17. Article 119 .3 (d) provides that "Each Party shall provide the legal means for interested 
parties to prevent the use of the GI […] even wh ere the true origin is indicated, or where they 
are used in translation or accompanied by te rms such as "kind", "type", "style", "way", 
"imitation", "method" or other analogous expre ssions, if such use falls under subparagraph (a) 
to (c).  
(a) Is our understanding correct that the preventi on of use of the GI  even where the 
true origin is indicated, or where they are used in translation or accompanied by 
terms such as "kind", "type", "style", "way", "imitation", "method" or other 
analogous expressions" applies to all kinds of GI (e.g. also to cheeses)?   
 Yes.  The prevention in question applies to all kinds of GI. The use which does not fall under 
Article 119.3(a)-(c) is not prohibited by 119.3(d). In other words, Article 119.3(d) does not take away 
“mislead” requirement included in Article 119.3(a)-(c ). Therefore, Article 119.3(d) is implemented 
through the same legislation as Article 119.3(a)-(c). 
 
(b) What are the legal means put at the disposal of interested parties in order to 
implement this provision? 
 Japan:  Japan implements Art. 119.3(a)(i) and (ii),(b) and (c) through the Unfair Competition 
Prevention Act (Item 13,Paragraph 1 Article 2, Ar ticle 3 and Article 4) and 119.3(a)(iii) through 
"Standard for Indication in Relation to Geogra phical Indications” which is based on the Act 
Concerning Liquor Business Association and M easures for Securing Revenue from Liquor Tax. 
  WT/REG273/2 
Page 8  
 
   Switzerland: In Switzerland, civil, criminal, administrative (as applicable) and border 
enforcement procedures are at the disposal of in terested parties to prevent use of geographical 
indications which conflic t with Article 119 JSEPA. 
 
(c) Are these legal means also at the disposal  of interested parties representing a GI 
from any other WTO Member? 
 Yes.  These legal means are also at the dispo sal of interested parties representing a GI from 
any other WTO Member.  
18. Article 119 .3 (e) (i) provides that "Each Party shall ensure that the registration of a 
trademark which contains or consists of a GI, with respect to products not originating in the 
territory indicated, is refused or invalidated ex o fficio if the legislation of the Party so permits or 
at the request of an interested party, if the use of the indication in the trademark of such productions in the Party corresponds to a situatio n referred to in subparagraph (a) (i), (a) (iii), 
or (d) insofar as subparagraph (a) (i) or (a) (iii) is applicable.   
(a) Is our understanding correct that this provision means that a Party will ensure 
the possibility to seek the refusal or invalidation of the registration of a trademark that contains or consists  of e.g. the translation of a GI? 
 Japan:  It depends on whether the "mislead” requi rement included in Artic le 119.3(a)(i) is met 
or not. Namely the registration of trademark is not refused or invalidated based only on the fact that 
the trademark contains or consists of e.g. the tran slation of a GI in the case of other products than 
wine and spirit.  As is explained above, Article 119.3(d) does not take away "mislead” requirement 
included in Article 119.3(a)(i). In other words, Article 119.3(e)(i) does not provide any obligations 
beyond Article 22.3 and 23.2 of TRIPS agreement. 
 
 Switzerland: In Switzerland, interested parties are provided the legal means to apply for refusal or invalidation of the registration of trademarks which conflict with Article 119 JSEPA. 
 
(b) What are the legal means put at the disposal of interested parties in order to 
implement this provision?  
 Japan: As for Japan, Article 119.3(e)(i) is im plemented through Trademark Act (Item 16 and 
17, Paragraph 1, Article 4; Article 15, Item1, Article 43bis; Item 1, Paragraph 1, Article 46). 
  Switzerland: In Switzerland, an administrativ e pre-grant opposition procedure is available to 
seek the refusal of the registration of a trademark; Post grant, a trademark which conflict with Article 
119 JSEPA may be invalidated through civil procedure.  
 
(c) Are these legal means also at the disposal  of interested parties representing a GI 
from any other WTO Member? 
 Yes.  These legal means are also at the dispo sal of interested parties representing a GI from 
any other WTO Member. 
 
19. Article  l19.3 (f) provides that "The protection afforded by this Article shall also apply 
in cases where products originating in a Party are destined for exportation." 
 
 
  WT/REG273/2 
 Page 9 
 
 
  (a) Is our understanding correct that under this provision, a Party would provide 
for the legal means to allow an interested  company from the other Party to seek 
the protection set out in the agreement concerning a product wrongly bearing a GI from the other Party where this produc t is destined for exportation to other 
third countries and not put on the internal market?   
 Japan: Yes, with an exception under Note to Article 119.3(a)(iii), which stipulates  that "The 
Parties may, with respect to subparagraph (iii), provide for enforcement by administrative action 
instead of judicial procedures.” "Standard for I ndication in Relation to Geographical Indications” 
which provide for enforcement by administrative action and is based on the Act Concerning Liquor 
Business Association and Measures for Securing Re venue from Liquor Tax, corresponds to a measure 
implementing Article 119.3(a)(iii).  
 Switzerland:  Yes, if this product originates in that Party. 
 
(b) What are the legal means put at the disposal of interested parties in order to 
implement this provision? 
 Japan: As for Japan, Article119.3 (a)-(d) are app lied to a Japanese product which is destined 
for exportation to other third countries than Swit zerland and not put on the Japanese market. Article 
119.3(f) is implemented through the Unfair Competiti on Prevention Act (Item 13 , Paragraph 1 Article 
2, Article 16) and “Standard for I ndication in Relation to Geographical  Indications” which is based on 
the Act Concerning Liquor Business Associati on and Measures for Securing Revenue from Liquor 
Tax.  
 Switzerland: In Switzerland, civil, criminal, administrative (as applicable) and border 
enforcement procedures are at the disposal of inter ested parties to prevent such use of geographical 
indications which conflic t with Article 119 JSEPA. 
 
(c) Are these legal means also at the disposal  of interested parties representing a GI 
from any other WTO Member?   
 Yes. These legal means are also at the dispo sal of interested parties representing a GI from 
any other WTO Member. 
 
20. Article 119.4 provides that "In proceedings by the relevant authorities of each Party, 
whether administrative or judicial, regarding the protection provided for in this Article, designations listed by a Party in Annex X shall serve, without prejudice to action or procedures 
by the relevant authorities of the other Party, as a source of information that these designations 
are protected by the former Party as geographical indications as provided for in this Article."   
(a) What are the legal means put at the disposal of interested parties in order to 
implement this provision? Or does this provision have direct effect? 
 Japan: Because the list of Annex X is just "a source of information” and does not have any 
legal effects, there are no specific provisions of  domestic laws and regul ations to implement 
Article 119.4.   Switzerland: In Switzerland, civil, criminal, administrative (as applicable) and border enforcement procedures are at the disposal of in terested parties to prevent use of geographical 
indications which conflict with Article 119 JSEPA. Accordingly, Annex X may serve as a source of 
information in accordance with Article 119.4 JSEPA in these procedures. WT/REG273/2 
Page 10  
 
  (b) Could an interested party directly refer to Annex X of the FTA to invoke the 
rights under Article 119.4?   
 Japan: No. As mentioned above (Japan’s answer  to Question 32. (a)), Annex X is mere “a 
source of information.” An interested party can refe r to Annex X as a source of information, while an 
interested party can not refer to Annex X to invoke  the rights under Article 119.4. Therefore, the list 
of Annex X does not have any legal effects.  
 Switzerland: Interested parties may refer to Annex X as a source of information, in 
accordance with Article 119.4, in the procedures enum erated in the response to question 32 a) above. 
 
(c) Are these legal means also at the disposal  of interested parties representing a GI 
from any other WTO Member?   
 Japan: Interested parties including that from EU could use this list as a source of information 
in the proceedings regarding the pr otection provided by Article 119. 
  Switzerland: See answers to questions 32 a), 29 c), 30 c) and 31 c) above. Annex X, however, 
contains geographical indications from Japan and Switzerland only and can thus serve as a source of 
information for those listed designations only.  
21. Article 119.5 (a) provides that "The Parties sh all, upon request of either Party, review in 
the Joint Committee Annex X with a view to updating the list by including in Annex X 
geographical indications which received protectio n by either Party at its national level". 
Annex X to the Agreement contains a series of GI from Japan and Switzerland.   
(a) Was the establishment of the list in Annex X subject to any specific conditions or 
procedures within each Party and/or in both Parties? 
 Japan: No.  The only condition for the inclusi on of a designation in Annex X is that the 
designation is protected by a Party as a geographical indication as provided for in Article 119.  It is 
noted again that Annex X serves only as a source of information.  For avoidance of doubt, the mere 
fact that an indication is included in the Switzerland list in Annex X does not necessarily mean that the same indication is recognized in Japan as a GI to be protected in Japan as such. 
  Switzerland: Geographical indications listed in Annex X need to comply with the definition as contained in Article 119.2 JSEPA. 
 
(b) Is there any specific conditions or proce dures to be fulfilled within each Party 
and/or in both Parties for adding GIs in Annex X? 
 Japan: See the answer to the previous questi on. For Japan, the condition to be fulfilled for 
adding a GI in Annex X is that the indication is protected as a GI within Japan. 
 
 Switzerland: Geographical indications proposed for inclusion in an up-date of the list in 
Annex X need to be protected by th e relevant party at its  national level and comply with the definition 
as contained in Article 119.2 JSEPA.  
 
    WT/REG273/2 
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  Questions from the Delegation of Chinese Taipei  
 Provisions on trade in services and investment (IV)
 
 
22. According to paragraphs 98 and 101 of th e Factual Presentation (WT/REG273/1), the 
disciplines on most-favoured-nation (MFN) treatm ent, market access an d national treatment 
are applicable subject to the Parties’ lists of reservations in Annex III of the Agreement.  In 
addition, the disciplines of Chapter 9, covering investments relating to national treatment, MFN 
treatment and the prohibition of performance requirements, are not applicable to the non-
conforming measures listed in Annex IX of the Agreement. 
(a) What factors did the Parties take into account when preparing their lists of 
reservations on trade in services? 
 Reservations concerning existing measures are usually based on measures provided for by 
national laws and regulations. 
 
(b) What factors did the Parties take into a ccount when preparing their lists of non-
conforming or exceptional measures regarding investments? 
 Reservations for non-conforming measures are usually reflecting measures of the Parties 
which may be implemented in an inconsistent manner under the provisions such as NT and MFN. 
 
(c) Why do the provisions of Chapter 6 governing trade in services prevail over 
those of Chapter 9 governing investment if  there are inconsistencies or conflicts 
between these two chapters? 
 With respect to measures affecting trade in ser vices, there may be some overlap between the 
commitments under Chapter 6 prevail over those under Chapter 9 to the extent of any inconsistency.  
 
23. According to paragraphs 114 and 115 of the Factual Presentation, Annex VIII of the 
Agreement contains specific co mmitments undertaken by the Parties on the movement of 
natural persons.  Table IV.1 of the Fact ual Presentation summarizes Japan’s specific 
commitments on the movement of natural persons. 
(a) Table IV.1 indicates that the period of stay of natural persons may be extended.  
What are the maximum lengths to which the periods of stay may be extended for those categories listed in Table IV.1? 
 With respect to the category of "Short term business visitors”, the period of stay may be 
extended by 90 days at the maximum according to each  case. With respect to the other categories, the 
number of times of extension has no restriction. 
 
(b) Concerning the movement of natural p ersons, why does Switzerland distinguish 
between its commitments on services secto rs and those on non-services sectors? 
 Because the GATS obligations are embodied in the Swiss legislation, a specific regime 
applies under Swiss legislation for services compared  to non-services. The different regime applies 
for commitments undertaken unde r relevant agreements.  
  
 WT/REG273/2 
Page 12  
 
  24. According to paragraph 153 of the Factual Presentation, Switzerland reserves the right 
to introduce any new discriminatory measure regarding cross-border trade. 
Why does Switzerland reserve the right to introd uce such discriminatory measures?  Is 
this policy not out of line with the international trend towards further liberalization of trade in 
services, especially in light of the rapid development of electronic commerce? 
 The reservation on new services is limited to a selected number of sectors such as 
communication, entertainment and internet-based services where technical progress may imply new 
challenges of regulatory nature. The policy line fo llowed by Switzerland is to give its regulators 
enough flexibility to face such challenges. 
 
Questions from the Delegation of the United States
 
 
Goods Liberalization  
 25. According to Paragraphs 44 and 45 and Annex 1 Table AI.1 and AI.3 of the Factual 
Presentation:  
Japan eliminates duties over a period of 15 years on 88.8% of all tariff lines covering 
99.5% of imports from Switzerland under the agr eement.  However, though 95.2% of industrial 
tariffs are duty-free, only 62% of agricultu ral tariff lines are duty-free under the agreement. 
Upon entry into force, Switzerland
 eliminates duties on 83.2% of all tariff lines covering 
99.72% of imports from Japan under the agreement.  However, though 99.9% of industrial tariffs are duty-free, only 32.3% of agricultur al tariff lines are duty-free under the agreement. 
(a) How do the Parties explain the highly disproportionate liberalization between 
the industrial and agricultural sectors? 
 The trade liberalization undertaken in the FTEPA  is the result of negotiations between Japan 
and Switzerland with the aim to strike a balance between their specific interests and sensitivities, 
while also ensuring conformity with  the requirements of Article XXIV. 
 
(b) Could the Parties please explain how th e level of tariff elimination achieved 
meets the "substantially all trade" sta ndard set out in GATT Article XXIV?  
 The Parties to the Agreement believe that the coverage of the FTEPA between Japan and 
Switzerland fulfils the "substantially all trade” requirement under GATT Article XXIV. 
  "Substantially all trade” does not amount to all trade. The criterion refers to overall trade 
rather than to either imports or exports, and is not necessary equal to the coverage of specific sectors 
or products.   Moreover, as the liberalization undertaken by the Parties in the FTEPA covers substantially 
all the trade carried out between the Parties, we are of the view that the coverage of the Agreement is 
fully consistent with our WTO obligations. 
 
(c) For what reasons did Japan undertake a longer tariff elimination schedule 
compared to Switzerland?    
 The figures reflect the result of the negotiations conducted by both Parties, taking into 
consideration each side’s specific interest and concerns.  WT/REG273/2 
 Page 13 
 
 
  (d) Would Switzerland have been in a position to undertake greater tariff 
elimination if it had made use of staging periods?   
 No. Switzerland does not make use of staging periods in its FTAs. The general practice of 
Switzerland with regard to tariff elimination in the framework of FTAs consist s of the following 
approach: for industrial products, Switzerland seek s to eliminate/ consolidate to zero any remaining 
tariff barriers as of entry into force of the FTA. For processed agricultural products, Switzerland aims 
at eliminating the industrial component of the tariffs while maintaining measures to compensate for the higher raw material costs for the domestic pr ocessing industry. Switzerland's FTAs do cover basic 
agricultural products as well. Switzerland usually gr ants its partners tariff concessions on a selected 
range of agricultural products, ta king into account the interest of the Parties and specific sensitivities 
of certain products in a manner consiste nt with the Swiss agricultural policy.  
  In the case of Switzerland, the use of stagin g periods would not lead to greater tariff 
elimination for any of the above mentioned cat egories of goods. On the other hand, the FTEPA 
between Japan and Switzerland includes a general revi ew clause for trade in goods that enables the 
Parties to review their concessions five years af ter the entry into force of the Agreement.  
 
Technical Barriers to Trade
 
 
26. In paragraph 78 of the Factual Presentation, it appears as though the Parties have 
designated different TBT inquiry points than  their respective existing WTO TBT inquiry 
points.  If this is correct, could the Parti es please explain their rationale for doing so? 
 It is correct.  The Parties have designated e nquiry points with the necessary expertise to the 
closer economic partnership betw een Japan and Switzerland under the Agreement. In case of Japan, 
for example, the International Trade Division of MO FA serve as a WTO TBT inquiry point, as it is in 
charge of WTO related matters.  For Japan-Switzerland EPA, the Central and South Eastern Europe 
Divisionis of MOFA which is in responsible fo r bilateral matters with Switzerland serves as the 
enquiry point.  Services and Investment
 
 
27. Paragraphs 98-101 of the Factual Presenta tion describe the scope and nature of 
Agreement’s key obligations relating to servic es and investment.  The report notes that 
Chapter 6 of the Agreement (trade in servic es) contains obligations on market access 
(Article 46) and national treatment (Article 47), applicable to all four GATS modes of supply; 
and that Chapter 9 of the Agreement (investment) contains a separate obligation on national treatment (Article 87), applicable to all sectors (including services).  Paragraph 121 of the report notes that "though there are some overlaps in terms of coverage, the scope of the two 
Chapters is distinct." 
 Based on the information in the Factual Presen tation, and on the text of the Agreement 
itself, it appears that two sets of obligations apply to trade in services between the parties through the commercial presence mode (Mode 3).  First, pursuant to Articles 46 and 47, each 
party is required to (1) accord to services supp liers, in respect of respect of all measures 
affecting the supply of their services, "treatment no less favourable than that it accords to its 
own like services and service suppliers;" and (2) no t maintain or adopt any measures defined as 
"limitations on the participation of foreign capi tal."  Second, pursuant to Article 87, each party 
is required to accord to investors of the other Pa rty and to their investments, in relation to their 
investment activities, "treatment no less favourable than that it accords, in like situations, to its 
own investors and to their investments." 
 WT/REG273/2 
Page 14  
 
   Could the parties describe whether they intend the scope of the obligations contained in 
Articles 46 and 47 of Chapter 6 to be narrower than, broader than, or perfectly coterminous with the scope of the obligation in Article 87 of Chapter 9, as these obligations apply to services provided through commercial presence?  In other words, to what extent do the parties believe these two sets of obligations overlap, with respect to Mode 3 service suppliers? 
 
 With respect to measures affecting trade in ser vices, there may be some overlap between the 
commitments under Chapter 6 prevail over those under Ch apter 9 to the extent of any inconsistency.    
 
28. Paragraph 108 of the Factual Presentation no tes that parties to the Agreement have 
permitted one another to take "non-conform ing measures" exceptions to the Chapter 9 
obligations on national treatment, MFN treatm ent, and performance requirements.  Paragraph 
107 notes that the provision on performance requirem ents (contained in Article 96), is simply an 
incorporation of the WTO TRIMs Agreement into the Agreement. 
 Could the parties explain why they created a mechanism to schedule exceptions to the 
performance requirements obligation in Article 96, when the scope of that obligation is limited 
only to fulfilment of WTO obligations that the parties are already required to fully adhere to? 
 
 Switzerland has not lodged any reservations to  the prohibition of performance requirements. 
On the other hand, any existing non-conforming measur es that is maintained, continued or renewed at 
any time by local governments other than prefectures is reserved by Japan.  Japan shall take such 
reasonable measures as may be available to it to in crease the conformity with the relevant provisions 
of Chapter 9 of the existing non-confor ming measures by such local governments. 
 
29. Paragraph 154 of the Factual Presentation describes the obligations on domestic 
regulation contained in Article 48 of the Agreement.  It notes that these disciplines are binding 
on a party "only in sectors in which it has undertaken specific GATS commitments." 
 Could the parties explain why they limited  the scope of the domestic regulations 
obligations in Article 48 to only those sect ors in which they have undertaken GATS 
commitments, as opposed to applying them to all sectors, or at least to all sectors covered by the 
parties’ commitments under the FTA? 
  For practical reasons, the Parties limited the sc ope of their obligations to sectors in which it 
has undertaken specific commitments in their schedule under the GATS. 
 
30. Paragraph 153 of the Factual Presentation no tes the Agreement’s particular treatment 
of "new services," a term defined differently by the two parties.  According to the parties’ 
Annex III entries, Japan has reserved the right to  "adopt or maintain any measure relating to 
the supply of services in any mode of supply in which those services were no t technically feasible 
at the time of entry into force" of the Agree ment; while Switzerland has reserved the right to 
"adopt or maintain any measures" across a range of  sectors, in respect of "services that are not 
currently in the Swiss market," including "services relating to existing or new products or the 
manner in which a product or service is supplied." 
 Could the parties address the question raised  by the Secretariat in paragraph 153 of its 
report about how these Annex III reservations intera ct with the obligation undertaken by both 
parties under Article 74 of the Agreement to "ensure that its measures governing electronic 
commerce do not discriminate the supply of serv ices transmitted electronically against the 
supply of like services by other means"? In other words, do these reservations also provide an 
exception to the Article 74 rule?  WT/REG273/2 
 Page 15 
 
 
   There is no link between the lists of reservations  and Article 74. By virtue of Article 74, Japan 
and Switzerland set down the principle of "technol ogical neutrality” with respect to services. The 
reservation on new services does not put this principle in doubt.   
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