WORLD TRADE  
ORGANIZATION  WT/TPR/M/208 
9 February 2009 
 (09-0594) 
Trade Policy Review Body 
15 and 16 December 2008  
 
 
 
TRADE POLICY REVIEW 
 
SWITZERLAND AND LIECHTENSTEIN 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Yonov Frederick Agah (Nigeria) 
 
   Page 
 
I.
 INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF SWITZERLAND 4  
III. OPENING STATEMENT BY THE REPRESENTATIVE OF LIECHTENSTEIN 10  
IV. STATEMENT BY THE DISCUSSANT 13  
V. STATEMENTS BY MEMBERS 16  
VI. REPLIES BY THE REPRESENTATIVES OF SWITZERLAND AND 
LIECHTENSTEIN, AND ADDITIONAL COMMENTS 33  
VII. CONCLUDING REMARKS BY THE CHAIRPERSON 36
 
Note:   Advance written questions by WTO Members and the replies provided by Switzerland and 
Liechtenstein are reproduced in document WT/ TPR/M/208/Add.1 and will be available online 
at:  http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm.    WT/TPR/M/208 
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  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third joint Trade Policy Review of Swit zerland and Liechtenstein was held on 15 and 
17 December 2008.  The Chairperson H.E. Mr. Yonov Frederick Agah (Nigeria) welcomed the 
delegations of Switzerland and Liech tenstein, headed by H.E. Mrs. Marie-Gabrielle Ineichen-Fleisch, 
and H.E. Mr. Norbert Frick, respectively, and th e discussant, Mr. Faizel Ismail (South Africa).  As 
usual, the discussant would speak in his personal cap acity and not as a representative of his country.  
In accordance with the established procedures, the discussant had made available, in advance, outlines 
of the main issues he intended to raise (document WT/TPR/D/183). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The reports by Switzerland and Liechtenstein were contained in 
document WT/TPR/G/208 and that of the WTO Secretariat in WT/TPR/S/208.  As indicated in 
WT/TPR/6/Rev.1, the Members under review should pr ovide written answers, by the beginning of the 
review meeting, to questions subm itted at least two weeks in advance.   Questions posed subsequently 
should be answered, to the extent possible, before  the start of the second session.  Questions left 
unanswered at the end of the second session should be  answered in writing no later than one month 
after the meeting.  Questions by the following dele gations had been submitted in writing at least two 
weeks in advance and had been transmitted to th e delegations of Switzerland and Liechtenstein:  
China;  Argentina;  the United States;  Australia;  Chile;  New Zealand;  Hong Kong, China;  Japan;  Brazil;  the Republic of Korea;  and the European Communities.  Copies of these questions and of the 
answers provided by Switzerland and Liechtenstein we re available in the meeting room.  All advance 
questions, as well as the responses received from th e delegations of Switzerland and Liechtenstein, 
are reproduced in WT/TPR/M/208/Add.1. 
3. The following delegations had submitted written questions after the two-week deadline:  
Colombia;  Mexico;  the Separate Customs Territory  of Taiwan, Penghu, Kinmen, and Matsu;  Peru;  
Canada;  and India.  These questions had also b een transmitted to the delegations of Switzerland and 
Liechtenstein, and copies were available in the meet ing room;  related answers should be available at 
the start of the second session. 
4. According to the documentation prepared for this Review, since the last joint review of 
Switzerland and Liechtenstein in 2004, their economi es had grown on average by 2.7% per year for 
Switzerland and 2.2% for Liechtenstein, led by expor ts and private consumption.  External trade 
(including access to foreign markets) was central to bot h economies;  their ratios of external trade to 
GDP exceeded 100%.  Switzerland and Liechtenste in had pursued trade liberalization through 
multilateral, regional, and bilateral agreements.  In particular, Switzer land's recent reforms had further 
aligned its trade regime on the EC's, while Liechtens tein had participated in integration areas of 
interest to it but not covered by the EEA.  None theless, participation in various preferential trade 
agreements made Switzerland's and Liechtenstein's trade regimes somewhat complex, with potential 
risk of diversion. 
5. The Swiss competition regime had been stre ngthened but competition remained limited in 
areas such as agriculture, health care, and public tran sport, contributing to higher prices.  Agriculture 
was still afforded relatively high protection.  Ho wever, both countries inte nded to eliminate export 
subsidies for basic agricultural products.  Further reforms through reduction/elim ination of tariffs and 
subsidies, mainly for agricultural products, would benefit consumers and impr ove resource allocation. WT/TPR/M/208 
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  II. OPENING STATEMENT BY THE REPRESENTATIVE OF SWITZERLAND  
6. The representative of Switzerland
 had welcomed the opportunity to present Switzerland's 
economic and trade policy jointly with Liechtenste in.  The Report by the Secretariat set out the 
economic and trade policies broadly formulated by Switzerland and those developed individually.  It 
carried on from the 2004 review, in which Switzer land had presented its structural reforms in 
response to a long period of weak economic growth.  This sluggishness had been due, inter alia , to the 
failure to join the European Economic Area in  1992, and had revealed, over time, a number of 
structural weaknesses. 
7. Growth policy had turned towards reforms aimed at increasing the productivity of the 
economy and focusing on production efficiency, labour input, innovation and the impact of the State 
in the economy.  In order to improve production efficiency, competition was reinforced (bilateral 
agreements with the EC on the free movement of pe rsons, air transport, and law on technical barriers 
to trade), and public infrastructures were progressive ly liberalized (revision of the Law on Cartels, 
liberalization of the postal market, telecommunicati ons, and rail transport of goods).  The supply and 
quality of labour input had been improved (crèch e-building programme, introduction of maternity 
insurance, revision of unemployment insurance, and a new Law on Vocational Training).  The 
relevant framework conditions had been improve d by facilitating contacts between the universities 
and economic circles, increasing resources available for research, revising the Law on Patents and the 
taxation of employee options, and modernizing the law on the largest joint stock companies.  The 
impact of the State on the economy had been closely examined;  the debt break that made it possible 
to control State debt during the economic cycle, and by analysing the impact of regulation and 
carrying out tests on the SMEs it had been possible to  evaluate administrative cost and indirect costs 
of the laws. 
8. Following these economic reforms, the increasing globalization of trade, and the country's 
further economic integration with Europe (free movement of persons with the EC and EFTA), 
economic growth had picked up significantly si nce 2003.  From 2004 to 2007, GDP growth had 
hovered around 3%.  However, this had not stoppe d Switzerland from pursuing its reforms after 2004 
to strengthen the competitive capacity of its econo my.  These reforms included the Agricultural Policy 
2011, the revision of the laws on technical barrier s to trade, on government procurement, on the 
domestic market and on postal services, the new laws on electricity supply and on the Federal 
Financial Market Supervisory Authority, the implem entation of the amendment to the Law on Cartels, 
and new developments in the area of intellectual property.  The customs law and the export risk 
insurance had been revised.  The export promotion system had been reformed in depth.  Following 
these reforms, Switzerland was in a better position to  face the current world financial crisis, even 
though it was unlikely that an economic slowdown could be avoided given the country's strong 
dependence on international trade. 
9. The Swiss representative tried to make an assess ment of the latest developments and the 
outlook for the Swiss economy, the extent of its  integration into the world economy, the main 
components of its foreign economic policy strate gy, and the key reforms introduced since 2004. 
(i) Recent economic developments and outlook 
10. The sustained growth of the Swiss economy from 2003 to 2007 had given way to slower 
growth in 2008.  During the third quarter, GDP had remained unchanged.  The negative impact of investment on growth had been offset by the trad e balance and private consumption.  Year on year, 
real GDP had progressed by 1.6% compared to the third quarter of 2007.  While private consumption 
remained strong, the downturn in exports which had begun in September had gathered speed in 
October.  The sudden worsening of the financ ial crisis had dimmed the outlook for the world 
economy.  The entry into recession of the United St ates and much of Europe, the slowdown in Asia,  WT/TPR/M/208 
 Page 5 
 
 
  the recent and rapid appreciation of the Swiss franc against the euro, and the direct effects of the 
financial crisis on the large Swis s banks would have a negative impact on the Swiss economic growth 
outlook.  The rapid spread of the financial crisis  to the economies of so many countries highlighted 
the extent of the world's economic and financial in terdependence.  Until not long ago, it had been 
thought that the Swiss economy would have to f ace no more than a temporary slowdown (end of 
2008/beginning of 2009), but since then the prospect s had deteriorated considerably.  The longer the 
period of sluggish world economic growth, the greater the impact would be on Switzerland, 
particularly through exports and investment.  Ne vertheless, consumption had remained relatively 
strong in Switzerland.  Its real estate sector was h ealthy, and there had been no major tightening of 
credit or adjustment of standards for granting loan s, since relatively few banks had been directly 
affected by the crisis.  However, in a period of  economic slowdown, the weight of the banking sector 
in GDP could be felt. 
11. In 2009, growth was expected to be negative.  Consequently, unemployment could go back up 
to an average of approximately 3%  (2.5% in October).  On the other hand, with the considerable 
decrease in the price of oil and other raw material s and the recent appreciation of the Swiss franc, the 
rise in consumer prices should be limited to 0.7% on average in 2009.  In view of these developments, 
the Swiss National Bank had eased its monetary polic y by lowering the three-month Libor fluctuation 
margin in Swiss francs to 0-1%, and was now aiming at a Libor of approximately 0.5%.  Meanwhile, public finances were expected to suffer the repercu ssions of the crisis, although they had been in 
surplus when it began.  
(ii) Role of international trade for the Swiss economy  
12. Switzerland attached great importance to the WTO and the multilateral trading system. 
International trade and investment played a major role in its economy and in the formulation of its 
economic policy.  
13. Manufacturing and services accounted for 26% and 73% of GDP, respectively.  The Swiss 
economy had reinforced its specialization in key manufacturing sectors (high technology and 
biotechnology, finance, and insurance).  Exports and imports of goods and services accounted for 
55.9% and 46.7% of GDP, respectively.  A large number of companies exported over 90% of their 
production.  With globalization and opening of new ma rkets, they acquired raw materials and       
semi-finished goods at the best possible conditions  on very competitive international markets and 
tended to concentrate high-tech and high value- added activities in Switzerland.  Imports were 
facilitated by efficient customs procedures and customs duties of only 2% (on average) on 
manufactured goods.  Therefore, Switzerland was surpri sed that the Secretariat still qualified duties of 
less than 2% as "nuisance rates".  For Switzerland,  clearly, high tariffs, not low ones, represented a 
nuisance for exporters.   
14. Globalization was a major reason why Switzerland did not resort to anti-dumping, 
countervailing or safeguards measures.  As prices were traditionally high in Switzerland, the cheaper 
the inputs were to the Swiss manufacturing or imports to consumers, the better.  For instance, the 
strong restructuring of the textile industry in 1990s  had taken place with no state intervention, trade 
policy measures or special support measures.  The Swiss market was open to manufactured goods.  Economic activity in this sector was not subsidi zed, except for processed ag ricultural products, which 
benefitted from a system taking into account diffe rences in prices between domestic and world raw 
materials.  However, Switzerland was preparing to abolish the system, to comply with the WTO 
decision taken in Hong Kong, China.   
15. The Swiss domestic market was narrow, which had forced key manufacturing sectors, large 
banks, and insurance companies to  expand abroad.  Their fallout in Switzerland was significant as 
they helped maintain within Switzerland research activities, production, and centers of competence WT/TPR/M/208 
Page 6  
 
  and decision.  However, since a high degree of in tegration into the world economy could represent a 
risk, Switzerland was committed to reinforcing the international competitiveness of its economy and 
to strengthening the rules governing the multilateral trading system.   
16. Switzerland pursued macroeconomic policies aimed at fiscal equilibrium over the      
medium-term, and price stability.  The economic r ecovery since 2003, however, had shown that good 
macroeconomic policies and pursuit of trade liberali zation were not sufficient to ensure sustainable 
growth.  Therefore, structural reforms remained  essential for a country highly dependant on foreign 
trade. 
(iii) Switzerland's foreign economic policy strategy 
17. Given the importance of international trade in its economy, Switzerland attached great 
importance to open world markets for goods and services (including in procurement), and to solid 
protection of intellectual property.  
18. Switzerland's priorities with respect to foreign economic policy were aimed at:  improving 
access to foreign markets and setting up coherent inte rnational regulations to be applied correctly by 
all;  developing Switzerland's competitiveness th rough strengthening domestic competition;  and 
integrating the largest possible number of countries into the world economy.  Improving access to 
foreign markets was aimed at ensuring non-discrim inatory access to markets for Swiss suppliers.  
Therefore, barriers to trade (e.g. tariffs and non -tariff barriers) needed to be dismantled and 
transparent, efficient, and compatible trade rules needed to be established in  order to guarantee legal 
certainty to Swiss exporters and protection to investors abroad. 
19. Switzerland remained committed to an open multilate ral trading system.  In light of growing 
regionalism in trade, strengthening the multilateral trading system was the priority.  Multilateralism 
was the best means to obtain effici ent market access rules and adequate  protection.  Smaller countries 
were in a better position to defend their interests in a multilateral setting, rather than in a situation of 
disproportionate power relationships.  A key role ha d to be assigned to the WTO in progressive trade 
liberalization;  establishing rules, rights, and obl igations for international trade;  and dispute 
settlement.  Switzerland was actively pursuing its e fforts towards a quick and positive conclusion of 
the DDA. 
20. Switzerland was party to bilateral and regional trade agreements, which were an additional 
tool to accelerate international trade liberalizati on and not a substitute for the multilateral trading 
system.  Switzerland had developed close economic ti es with the EC.  In addition to the 1972 FTA, 
they had concluded the bilateral agreements I a nd II on free movement of persons;  air and land 
transport;  agriculture;  processed agricultural prod ucts;  professional training and research;  TBT;  
public procurement;  cooperation in justice, police, asylum, and migrations (Schengen/Dublin);  tax 
treatment of savings and the fight against fraud;  en vironment;  statistics;  as well as participation in 
the MEDIA programme and pensions.  In addition to  its bilateral agreements with the EC and the 
Faroe Islands, and the 1960 EFTA Convention, Switzerland was part y to 17 FTAs concluded under 
the EFTA framework.  Negotiations between EFTA and Algeria, India, and Thailand were ongoing.  
Negotiations with the GCC and Peru had been conc luded in substance.  Switzerland and Japan had 
also concluded in substance negotiations aimed at a large free-trade and economic-partnership 
agreement. 
21. More competition on the domestic market was essential in two respects.  First, setting up 
competitive economic structures in Switzerland requi red the opening up of sectors that remained 
highly compartmentalized in order to limit input cost s for firms and to maintain, and possibly reduce, 
the cost of living.  Second, opening up these sectors would allow Switzerland to become more 
offensive and ambitious, and reinforce its capacity to negotiate.  This was particularly important in the  WT/TPR/M/208 
 Page 7 
 
 
  context of a redistribution of economic powers at a time when Switzerland's important trading 
partners were no longer limited to economies with si milar interests.  In this regard, Switzerland 
considered the structural reforms, conducted in  parallel with more external opening, as very 
important.  
22. Integrating developing countries and economies in  transition into the world economy was in 
the long-term interest of the Swiss economy, as  they also offered new trade and investment 
opportunities.  Thus, Switzerland was committed to he lping its partners to adjust their national 
framework through bilateral and multilateral economic cooperation.  Switzerland was in favour of 
opening markets to products from LDCs, actions in fa vour of countries in accession, and trade-related 
technical assistance for developing countries to help them better integrate the multilateral system and 
develop their own capacities to benefit from th eir improved access to the world economy.  
Switzerland strongly supported the agreement in  favor of LDCs concluded in 2005 at the 6th WTO 
Ministerial Conference in Hong Kong, China, accord ing to which industrialized countries would offer 
LDCs tariff-free and quota-free market access for at l east 97% of tariff lines starting at the latest in 
2008.  Since April 2007, Switzerland had been gran ting tariff-free and quota-free market access to all 
imports originating from LDCs, with exception of s ugar and rice, which would be included from July 
and September 2009, respectively.  
(iv) Main aim of the structural reforms:  strengthening Swiss economic growth  
23. Structural reforms at domestic and external le vels were essential to strengthen Switzerland's 
global competitiveness.  Opening markets interacted generally with domestic reforms;  as a result of 
trade liberalization, the choice for consumers becam e wider, and protected domestic industries were 
forced to become more efficient.  However, it seemed that Switzerland's domestic competition and the 
improved exports competitiveness since 2004 had been stimulated mostly through implementation of 
the agreement with the EC on free movement of persons.  Measures such as the revision of the laws on domestic market and on foreigners, had helped  ensure better mobility of services and workers 
within Switzerland.  Reforms in network industri es were moving forward, in particular in the 
electricity and postal markets, thereby encouraging direct investments.  
24. Future structural trade reforms would re volve around the revision of the law on public 
procurement, a partial revision of th e law on technical barriers to trade, an FTA in agriculture with the 
EC, and the pursuit of liberalization in network industr ies.  Other measures not directly affecting trade 
(e.g. reforms in education and tr aining, coherent development of  public infrastructure, further 
reductions in administrative burde n, and revision of the bankr uptcy law) would help further 
strengthen the medium-term growth potential of the Swiss economy.  
25. Switzerland's structural reforms included the Agricultural Policy 2011 (AP 2011), which 
represented a further step towards improving the co mpetitiveness and sustaina bility of agriculture.  
The key element was to substantially reduce the fi nancial means for market support while reallocating 
resources to direct payments not linked to pro duction.  Switzerland would eliminate its export 
subsidies on basic agricultural products as of e nd 2009, thereby showing its willingness to create a 
fairer trading system.  Duties on cereals and animal  feed would be reduced significantly.  Agriculture 
would be able to continue to provide the public  good benefits requested by the population while 
structural adjustments would take place at a pace th at was socially bearable.  Multifunctionality would 
remain at the core of Switzerland's future agricultura l policy.  An examination of the direct payments 
system and its potential development was under way;   a report was due to Parliament in 2009.  
26. Negotiations had also been initiated to reach an FTA with the EC in the agri-food sector 
aimed at opening markets through eliminating tariff ba rriers (tariffs and quotas) and non-tariff barriers 
(production and approval prescription).  It would incl ude agricultural raw materials (e.g. milk, and 
slaughter animals) and upstream and downstream se ctors (e.g. seed, machines, and yogurts).  The EC WT/TPR/M/208 
Page 8  
 
  was Switzerland's main trading partner in agri-food .  The conclusion of the agreement would be a 
major step for Switzerland's agricultural reform process. 
27. The new law on the Federal Financial Market Supe rvisory Authority would enter into force in 
2009;  the Authority would regroup the surveillan ce of banks, private insurance companies, and 
financial intermediaries.  Switzer land intended to strengthen the surveillance of financial markets and 
provide the Authority greater weight in its cont acts on the international scene.  The current world 
financial crisis had shown clearly that a coordinate d approach to financial surveillance was necessary, 
given the importance of the financial sector in th e Swiss economy and the links between the banking 
and insurance sectors.  In this context, the Gove rnment had already decided to consider submitting 
systemically Switzerland's relevant banks to stricter capital requirements.  
28. Switzerland was reforming the electricity and postal industries and their markets.  A new 
electricity supply law had entered into force in  2008;  it provided for a two-stage opening of the 
market.  In 2009, large industrial and commercial clie nts would be able to choose their suppliers;  the 
market for all consumers was expect ed to be open as of 2014.  The law provided for regulated     
third-party access to the grid in non-discriminatory terms.  Vertically integrated companies were 
required to separate from their transmission grids and create an exclusive grid operator company 
(Swissgrid), which would become grid owner by 2013.  Local distribution companies had to keep separate accounts for electricity generation, transmis sion, and distribution.  Until the regulated grid 
access was granted to all customers in 2014, electricity  prices for captive customers (i.e. without grid 
access) would be set by cantonal/communal authorities or companies;  therefore, prices differed.  
Switzerland was the only OECD country where electr icity prices for industrial users had fallen in 
dollar terms since 2004.  
29. The postal market was divided into three parts:   reserved services, for which the Swiss Post 
Office had to deliver universal servi ces and held exclusive rights to deliver letters of less than 100 g;  
non-reserved services, which were also part of the universal services, but where competition had been open to private operators;  and liberalized services.   The monopoly limit would be reduced to 50 g as 
of 2009;  complete market openi ng was being considered from 2012. 
30. In parallel to the current GPA negotiations, a revision of the 1994 federal law on public 
procurement was under way;  the revision was one of the pillars of the structural reforms to promote 
growth and should allow savings of around Sw F 4 00 million annually.  Legislative changes were 
aimed at using new information technology instruments in public procurement, improving efficiency to accelerate procedures, clarifying some legislative elements, and harmonizing better practices 
between the Confederation and cantons.  Nevertheless,  the project ensured that cantons would retain 
their competences and margin of manoeuvre.   
31. Even though Switzerland remained in a compar atively good situation in terms of economic 
performance and employment, its prospects had dete riorated notably due to developments in the 
world economy.  The Government considered that full-scale economic recovery plans to bolster the 
economy generally came too late to support the ec onomy effectively during a downturn.  However, 
some short-term measures were currently needed  to support economic activity and secure jobs, as a 
complement to structural reforms conducive to fu rther improvement of framework conditions in the 
Swiss economy.  
32. Given that the debt-brake rule left a margin of  around Sw F 1 billion a nd considering the large 
uncertainties, Switzerland had decided to lift th e 1% freeze of numerous 2009 budget credits and to 
accelerate the implementation of projects.  Expenditures for protection against floods and natural 
dangers, and rehabilitation of hous ing and public buildings for energy-saving purposes would be 
increased.  An optional fund financed by around 65 0 mainly exporting companies in the 1980s to 
encourage job creation in case of crisis, would be released in 2009.  These measures would have no  WT/TPR/M/208 
 Page 9 
 
 
  impact on the federal budget.  A second stage of expenditures would follow should the economic 
situation worsen notably.  The entire fiscal margin  would then be used, and represent a boost of 0.3% 
of GDP.  Such measures would include investments to improve energy-saving in old buildings and to maintain the national highways and federal railway infrastructure.  
33. Switzerland looked forward to finalizing th e implementation procedures of FTAs it had 
concluded in substance (e.g. with  Japan, Canada, and the GCC), fo r submission to Parliament and 
implementation in 2009.  These market opening e fforts would be accompanied by other targeted 
measures to promote exports.  Switzerland remained  committed to an early and ambitious conclusion 
of the DDA and would try to advance the multilate ral process at the 2009 World Economic Forum. 
(v) Conclusion 
34. The Swiss representative wished to contribute to a frank and open dialogue, which was 
needed in order to address the co mplex issues that the WTO had to settle if it was to achieve an 
enhanced multilateral system clearly focused on th e challenges of today and tomorrow and forming 
the cornerstone for all future progress.  She was en couraged by the number of questions received.  
Considerable efforts had been made to reply, a nd Switzerland would revert to the most important 
questions during the second session.  While Switzer land was strong when it came to services and 
manufactured goods, certain sectors – such as agri culture – remained difficult for its economic 
operators, its government and its trading partne rs.  Since the end of the Uruguay Round, the 
agricultural sector had overcome a number of challe nges, and its reforms would continue as long as 
they were not blocked by excessive external or internal demands.  
 
 WT/TPR/M/208 
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  III. OPENING STATEMENT BY THE REPR ESENTATIVE OF LIECHTENSTEIN 
35. The representative of Liechtenstein
 thanked the representative of Switzerland for her 
introductory remarks that stated the deep inte gration of the Swiss and Liechtenstein economies 
through their customs and monetary union.  He w ould not refer to trade policies and other issues 
falling under Switzerland's competence but focus on f eatures and policies specific to Liechtenstein.  
The Secretariat Report had described the complex connections between Switzerland and 
Liechtenstein, and the many issues to be tackled under the Review. 
36. Liechtenstein was fully committed to the multilate ral trading system, to strengthen further its 
rules, and to liberalize trade further.  A str ong, rules-based system provided stability, security, 
transparency, and predictability for economic ope rators.  Liechtenstein depended heavily on 
international trade and open markets, and was c onvinced that a strong and fair multilateral trading 
system was of benefit to all Members with regard to economic growth and development.  Therefore, 
Liechtenstein was strongly committed to the DDA. 
37. Belonging to two internal markets (i.e. the EC internal market through the European 
Economic Area (EEA) Agreement and the Swiss intern al market through the Customs Union Treaty) 
was one of the main features of Liechtenstein's eco nomic environment.  Liechtenstein had integrated 
with the Swiss customs territory under the 1923  Customs Union Treaty.  Trade policy measures 
affecting imports and exports formulated by Switzerland, as well as commercial treaties and trade agreements concluded by Switzerla nd, applied to Liechtenstein.  Li echtenstein was represented by 
Switzerland at the WTO for issues falling under th e Customs Union Treaty (trade in goods and 
agricultural products).  Imports a nd exports were subject to the Sw iss trade regime.  Liechtenstein 
acted independently on some issues (e.g. services and public procurement). 
38. The one exception to the Swiss competence on trade was on imports of products covered by 
the EEA Agreement, originating from other EEA memb er States and destined to Liechtenstein.  In 
1995, Liechtenstein had become a member of the EEA of which Switzerland was not a member.  Liechtenstein had to establish, inter alia , a Market Control and Surve illance Mechanism to make its 
accession to the EEA possible.  The EEA Agreement did not include the EC common agricultural 
policy, and the EEA Annex I (veterinary issues) did not apply to Liechtenstein, hence trade in 
agricultural goods was governed by the Custom s Union, even in relation to the EEA.   
39. Liechtenstein, with a small, export-oriented economy and high value-added in manufacturing 
and financial services, would not be able to avert th e international economic crisis.  After four years 
of steady economic growth (with signs of overhea ting in 2007), turnovers and exports of goods had 
increased more slowly in 2008.  Due to lower grow th in Liechtenstein's important export markets and 
the accentuation of the international financial cr isis, a further decline had to be expected. 
40. Liechtenstein was highly dependent on external relations.  Virtually, all raw materials and 
input parts and products had to be bought abroad, and all goods produced were exported.  Therefore, 
Liechtenstein's economic prospects were highly de pendent on economic devel opments in its main 
trading partners.  Liechtenstein also had internal constraints for further growth, i.e. very low supply 
of, and high prices for, land and property as we ll as the dried-out labour market.  The broad 
diversification of businesses and products, and the specialization of enterprises on niche and other 
high-technology products should he lp Liechtenstein to match inte rnational economic developments. 
41. During the period under review, jobs had increased steadily to 32,435 (2007);  this was very 
high in relation to residents of around 35,500.  More than 50% of the total workforce commuted daily 
to Liechtenstein.  The economic slowdown had not yet affected employment:  the total number of 
employed people had increased to 33,200 in mid-2008 (4.2% up on mid-2007).  In 2007, 178 branches of Liechtenstein exporting industries b ased abroad had employed 33,580 people, which  WT/TPR/M/208 
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  was more than the existing workplaces in Liechtens tein.  Unemployment had decreased from 2.8% to 
2.1% up to September 2008 but had increased slightly  to 2.3% in October and November 2008.  At 
end 2007, 55.4% of employees worked in services an d commerce, 43.5% in manufacturing, and 1.1% 
in agriculture and forestry.  
42. Liechtenstein's and Switzerland's inflation rates were similar.  Interest rates had remained 
stable with slight increases in early 2008.  In  2007, Liechtenstein's national budget had been positive 
for the third consecutive time.  Liechtenstein antic ipated a deficit in its 2008 account due to the poor 
performance of the stock market.  The 2009 budget also forecast a deficit, as in come was expected to 
decrease due to the economic crisis, growing expe nditures, and uncertain performance on the stock 
market. 
43. Non-agricultural exports had increased since 2004;  growth had been at 2.9% in the first eight 
months of 2008;  the downward tr end had continued in autumn.  Li echtenstein's export growth had 
been considerably lower than Switzerland's.   The main destinations for Liechtenstein's                    
non-agricultural goods were Switzerland, Germany, and the United States.  By economic area, the 
EEA (46%) ranked highest, before Asia/Pacific ( 23%) and America (18%), which showed that 
exports were highly diversif ied in geographical terms. 
44. During the review period, Liechtenstein's financ ial centre had continued to grow despite the 
effects of the subprime crisis and the tax contr oversy in Germany.  Turbulence on the financial 
markets had only had an indirect impact on Liechtens tein's financial centre, which remained stable;  
banks were sound financially and did not suffer fro m a lack of liquidity.  This relative good health 
was because traditionally, Liechtenstein's banks we re not involved in investment banking business, 
had a strict policy on credit approval process, and were active primarily as asset managers.  Deposits 
were guaranteed as banks were, in principle, self-fina ncing and disposed of high  equity-to-asset ratios.  
Therefore, the Government was not considering adopting special action to  support its financial 
institutions, but had established a monitoring of the situation.  
45. For decades, Liechtenstein had followed a very  liberal economic policy that was open to the 
world and aimed at minimum state intervention.  It had no public funding for private undertakings 
(with exception of agriculture) and no public policy to attract new FDI.  The Government's aim was to 
preserve the existing framework conditions for economic  operators.  Since many of the world's largest 
economies were going into recession, coordinated ac tion and reform of the international financial 
system was needed to restore confidence and prot ect assets.  Therefore, Liechtenstein supported 
initiatives aimed at reinforcing governance by impos ing more responsible and ethical behaviour.  
However, this should not lead to protectionism.  St ate intervention through state aid, regulation, and 
nationalization would not solve all the problems of economies going into recession.  Reinforcing regulation of the financial markets ha d to be done only where necessary.  
46. The Government closely observed international tr ends and discussions on financial centres.  
In 2005, it had established the FUTURO project te am, which had developed a vision and concrete 
proposals, based on the traditional strengths of th e financial centre, focusing on private wealth 
management.  In parallel, a working group had de veloped a tax law reform, encompassing tax justice 
and tax tradition, simplicity and transparency, in ternational compatibility, and conformity with 
European law.  Liechtenstein had been incorporat ing EC directives into its law since 1995, with a 
99.2% implementation rate.  Taxes were not part of  the EEA framework.  In light of international 
trends towards stronger cooperation on tax issues, Liechtenstein had incorporated, in 2005, the EC 
Savings Tax Directive, and levied a withholding ta x on interest income and transferred a significant 
share thereof to the European domiciles of Liechten stein bank clients.  It had signed the       
Schengen-Dublin Protocols in 2008 and was adopting the Schengen acquis  and Dublin/Eurodac 
acquis ;  the Schengen association would significantly expand information exchange on tax issues and 
provide mutual legal assistance in cases of tax fra ud.  Under the provisions of the Tax Information WT/TPR/M/208 
Page 12  
 
  Exchange Agreement signed with the United Stat es in 2008, Liechtenstein granted administrative 
assistance in cases of fraudulent tax evasion under U.S.  law.  Information exchange on tax issues 
would take place upon request for mutual legal and administrative assistance;  requests had to comply with a series of conditions and be individuali zed.  Liechtenstein was negotiating an anti-fraud 
agreement with the EC that entailed mutual legal and administrative assistance in cases of tax fraud 
and similar offences for direct taxes;  mutual info rmation exchange covered all offences for indirect 
taxes.  Under the agreement, Liechtenstein woul d implement EC standards on information exchange 
on tax issues.  The Government was willing to di scuss additional steps in the framework of double 
taxation agreements to be concluded on a bilateral basis.  In this context, Liechtenstein would insist 
on a reasonable balancing of interests within the frame work of international cooperation on tax issues 
that encompassed the avoidance of double taxation, taking into account the needs of Liechtenstein's 
export industry.  
47. In compliance with international and in particul ar EEA standards, Liechtenstein had started to 
liberalize the postal, telecom, and transport servi ces in the mid 1990s.  During the review period, the 
Parliament had approved steps towards privatizing the electricity and gas sectors. 
48. The EEA Agreement had extended the EC inte rnal market to Norway, Iceland, and 
Liechtenstein.  It covered free movement of goods , persons, capital, and services.  Its rules were 
updated continuously;  since 1994, more than 5,200 EC legal acts had been incorporated. 
49. Liechtenstein had become an EFTA member in 1991.  EFTA developments and its 17 FTAs 
had been described by the representative of Switzerland. 
50. The Trade Policy Review Mechanism provided an opportunity for dialogue on Members' 
trade policies, enhancing transparency, and strengthe ning disciplines.  It helped to achieve faithful 
implementation of the WTO Agreements in the long term.   WT/TPR/M/208 
 Page 13 
 
 
  IV. STATEMENT BY THE DISCUSSANT 
51. The discussant  said that there was no doubt about Switzerland's commitment to the 
multilateral trading system and the WTO.  Switzer land was host to the WTO and many trade-related 
institutions (e.g. UNCTAD and ITC).  It had c ontributed to expand the WTO premises, and had 
facilitated the DDA negotiations. 
(i) Overall economic environmen t and development policies 
52. Switzerland and Liechtenstein were amongst the wealthiest countries in the world (GDP per 
capita of over US$50,000).  This created special responsibilities for them, especially towards the 
world's poorest countries.  
53. Switzerland and Liechtenstein had enjoyed a customs union since 1923, with common trade 
policies for goods, including agriculture.  Switzerla nd had 7.6 million people and Liechtenstein just 
over 35,000.  Manufacturing and services domina ted the two economies.  Manufacturing was 
specialized in high-tech and high value products.  Services contributed to the bulk of GDP and employment, while the contribution of agriculture wa s relatively small (1.1% of their GDP, and 3.8% 
of employment for Switzerland and 1.3% for Liechtenstein). 
54. The current financial and econom ic crisis had had an impact  on both economies.  Although its 
economy had grown at about 3% annually over 2004 -07, Switzerland's GDP had fallen to less than 
0.5% of growth in the first two quarters of 2008.   The Swiss and Liechtens tein economies were highly 
integrated into the world economy;  trade in goods  and services exceeded 100% of GDP.  FDI in 
Switzerland had been growing, with foreign asset s of over 141% of GDP in 2007.  The EC was 
Switzerland's major trading partner and contribute d over 80% of imports a nd over 60% of exports;  
the United States was its main non- EC trading partner.  The EC was Switzerland's most important 
source of FDI. 
55. Liechtenstein was a member of the Europ ean Economic Area, while Switzerland was an 
observer.  In addition to their 1972 FTA, Switzer land and the EC had signed a series of bilateral 
agreements in 1999 and 2004 that covered, inter alia , free movement of persons, agriculture, air and 
land transport, technical barriers to trade.  Through their EFTA membership, Switzerland and 
Liechtenstein participated in several FTAs;  and more were being negotiate d.  Switzerland had also 
concluded an FTA with Japan and had started discussion with China. 
56. International trade and investment were vital for the Swiss and Liechtenstein economies, and 
they had an interest in a strengthened and more leg itimate and sustainable multilateral trading system.  
Switzerland already granted duty-free quota-free mark et access to LDCs, and had played an important 
role in supporting Aid for Trade and the Enhance Integrated Framework.  It had made valuable 
contribution to strengthening export capacity of developing countries through ITC and UNCTAD 
programmes, and SECO bilateral efforts.   
57. Switzerland could play an important role in building bridges and promoting greater 
cooperation between developed a nd developing countries.  Thus, the discussant enquired what 
Switzerland was doing to build more coherent na tional policies to ensure that its trade and 
development policies would promote a more inclusive and sustainable governance system for the world economy.  He asked whether these developmen t concerns were an important part of Swiss 
policy, and how Switzerland wished to strengthen its role in this regard. WT/TPR/M/208 
Page 14  
 
  (ii) Trade and tariff policies 
58. The Swiss-Liechtenstein tariff structure was ve ry remarkable.  The applied MFN tariff still 
comprised only specific tariffs.  While tariffs on non-agricultural products were generally low (about 
2% on average), tariffs on agricultural products were very high (22.7% on average).  Some 18.4% of 
tariffs were at zero.  However, about 42.2% of lin es were at less than 2% (nuisance tariffs).  The 
AVEs for agricultural products ranged from zero to  1,468%.  The large number of bilateral FTAs 
signed by Customs Union further complicated the ta riff structure.  The agriculture regime applied 
quotas to about 3.5% of tariff lines.  In addition,  a complex system of automatic and non-automatic 
import licensing applied to these quotas and products subject to compulsory reserve stock.  The regime seemed to be extremely complex and unw ieldy, and the discussant asked whether Switzerland 
planed to simplify its tariff struct ure and make it more transparent. 
59. Some 95% of the Swiss standards had been ha rmonized with European standards as of 2007.  
The Swiss Accreditation Service accredited conformity assessment bodies and EC accreditation 
bodies were recognized as equivalent to the Swiss.  The discussant enquired about the 5% of products 
that did not comply with EC standards;  and about compliance with international standards.  
60. The customs union could prohibit imports according to origin or for phytosanitary reasons.  
The discussant asked how the procedures of standard-setting and accreditation bodies could be made more transparent and accessible to developing countr ies, so that they did not become non-tariff 
barriers. 
61. Switzerland continued to subsidize agricultural products including dair y products, cattle and 
horses, and fruit and vegetables: 24,577 tonnes of da iry products had been  subsidized in 2005 
(21,368 tonnes in 2006).  In add ition, subsidies were provided to exporters of potatoes, cherries, 
apples and pears, and juice concentrates.  The pha se-out of export subsidies for basic agricultural 
products by 2010 was a good news.  However, Swit zerland provided subsidies to producers at the 
federal, cantonal, and communal le vels.  It continued to subsidize agricultural products, including 
dairy products, cattle and horses, wool, eggs, oilseeds,  sugar beet, potatoes, fruit, and other processed 
agricultural products.  Total annual subsidies amount ed to 9.9% of GDP.  Compensation was provided 
to two sugar refineries to use domestically produc ed sugar beet;  in 2009, the subsidy would go 
directly to producers.  The discussant wished to k now about any reforms being made to reduce     
trade-distorting subsidies, especially to the agricultural interests of developing countries. 
(iii) Sectoral policies 
62. Services was the largest contributor to GDP and employment in Switzerland and 
Liechtenstein.  Construction services were rela tively uncompetitive while financial services were 
amongst the most competitive.   
63. Switzerland's revised offers in services made  new commitments in c onstruction and tourism. 
However, they reflected measures already in place and did not go beyond the state of liberalization of the Swiss services sector as at mid-2008.  While Switzerland had bound measures affecting market 
access and national treatment in construction, it applied MFN exemptions and qualification 
requirements to restrict access to the labour market.  MFN exemptions included assembly and erection of prefabricated buildings and installation of work  for energy, heating, water, communications, and 
lifts;  a variety of activities in these areas required cantonal or local permits or authorizations.  These and other restrictions had raised the costs of Swi ss construction work to around 36.4% higher than in 
neighbouring countries.  The discussant asked wh at efforts were being made to remove the 
restrictions.  WT/TPR/M/208 
 Page 15 
 
 
  64. The financial sector employed 5.9% of the Sw iss workforce and contributed to around 11.8% 
of GDP.  It had contributed to around 29% of Liech tenstein's GDP  in 2005.  Switzerland was one of 
the world's most important financial centres and had th e world's fifth most important reserve currency.  
It had around 330 banks and its t op two (UBS and Credit Suisse) ranked among the world's top ten 
financial institutions. 
65. Swiss legislation distinguished between tax evasion and tax fraud.  Switzerland had put in 
place recently a unified and independent financia l market supervisory authority to monitor and 
regulate the financial sector.  Tax evasion was not cons idered a criminal offenc e in Liechtenstein;  the 
law was in favour of bank secrecy.  Liechtenstein had 15 banks of which 6 were foreign owned.  It 
was one of three countries on the OECD list of unc ooperative tax havens, i.e.  countries that had not 
made commitments yet on transparency a nd effective exchange of information. 
66. The discussant asked what safeguards were being put in place to make banking more 
transparent, expose fraud, and to increase prudential requirements and regulations to reduce systemic 
risks.  He enquired about the lessons Switzerla nd and Liechtenstein had drawn from the current 
financial crisis. WT/TPR/M/208 
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  V. STATEMENTS BY MEMBERS 
67. Members commended Switzerland and Liechtenstein for their important and positive role in 
the WTO.  Members reiterated their hope that Switzerland and Liechtenstein would continue to 
promote trade liberalization and structural reform and to contribute to the further progress of the DDA negotiations, in order to benefit from the multilate ral trading system.  Members looked forward to 
continue working with Switzerland, Liechtenstein  and other Members to conclude Doha Round. 
68. Members extended a special thanks to Amb. Wasescha for his diligent work in pushing 
forward the ongoing negotiations as Chair of the NAMA Negotiating Group.  His many years of trade negotiation experience had been evident.  The Draf t Paper he had presented earlier in December had 
been very well received by Members.   
69. Members thanked the two delegations for th eir written replies to written questions.   
70. The representative of China
 congratulated Switzerland and Liechtenstein for their economic 
performance during the period under review:  growth  had been strong and inflation had remained 
below 2%;  Switzerland had traditionally run a curre nt account surplus and Liechtenstein had no 
external debt.  These had laid a solid foundation for both countries to face up to the current financial 
crisis. 
71. The ratios of external trade to GDP for bot h countries exceeded 100%, which was a clear 
indication of the importance of trade in both econom ies.  However, this level of dependence could 
also mean high susceptibility to external turmoil.  Recent Swiss statistics showed that unemployment 
had increased by over 7,000 people, driving the unemployment rate from 2.5% to 2.7% in just one month.  In this regard, he enquired how the two c ountries had been coping with the ongoing crisis, 
and about the role foreign investment would play in  easing the current situation, given the openness of 
both countries to foreign investment. 
72. Trade and economic relations between China a nd Switzerland and Liechtenstein continued to 
deepen.  The volume of trade had increased in 2007  and 2008.  Switzerland,  amongst non-EC member 
countries, was the largest investor in China, wh ile China's investment in Switzerland had also 
increased rapidly. 
73. The Secretariat Report had mentioned that the applied MFN tariff still comprised only 
specific rates, with relatively high protection for agricultural products, and China was interested to 
know whether Switzerland and Liechtens tein were considering adopting ad valorem  duties in the 
future so as to provide certainty and pred ictability for importers as well as exporters. 
74. Switzerland and Liechtenstein were important Members of the WTO.  China commended 
Switzerland for providing economic  assistance and duty-free-quota-free treatment to LDCs and both 
countries for their contributions to the DDA negotiations.  
75. The representative of Argentina
 noted the economic conditions and political and social 
stability that were characteristic of Switzerland.  The services sector was the driving force of the 
economy.  However, the high level of dependence on financial services meant that the current 
financial crisis presented Switzerland with a spec ial challenge.  Industries specializing in the 
production of high-technology and high-quality goods also played a major role on the Swiss economic 
scene. 
76. Referring to the agriculture sector, he noted that , despite the sector's marginal contribution to 
employment and GDP, Switzerland continued to ap ply a highly distortive agricultural policy which 
included high applied tariffs, averaging more than  150% for meat, in addition to direct payments  WT/TPR/M/208 
 Page 17 
 
 
  which had amounted to 2.5 billion Swiss francs in  2006 and domestic support measures, which had 
exceeded 3 billion francs in 2004, as well as the comp lex system of indicative prices which remained 
in force for the importation of agricultural produc ts.  As a result of the above-mentioned policies, 
consumer prices for agricultural goods were on average two times higher than world prices. 
77. The obvious disparity between the opening up of  trade in manufactured goods and the high 
level of protection for agriculture continued to be reflected in the current negotiations at the WTO, 
where Switzerland maintained a position that did not bode well for achieving progress in the area of 
agriculture. 
78. Argentina had strengthened its commercial ties with Switzerland, which had become a major 
destination for Argentine exports.  That was re flected in Switzerland's mounting importance among 
major export destinations, which ha d pushed the level of total trade between the two countries up to 
US$873.2 million during the first nine months of 2008. 
79. The representative of the United States  noted that the economies of Switzerland and 
Liechtenstein were among the world's most advanced  and prosperous.  Per capita income was almost 
the highest in the world, as were wages.  The services sector dominated both economies, and both had 
large manufacturing sectors that were mainly sp ecialized in high-technology and knowledge-based 
production. Since their last TPR, these economies had grown on average by 2.7% per year for Switzerland and 2.2% for Liechtenste in, let by exports and private consumption.  Trade had been key 
to generating and maintaining this wealth.  Trad e in goods and services of both countries exceeded 
100% of GDP.  They both depended upon open export  markets to generate income while depending 
upon imports for raw materials. 
80. The two countries were home to some of th e world's most competitive enterprises in 
insurance, banking, medical and pharmaceutical products, and precision machinery.  Total goods 
trade between Switzerland and the United States was US$31.8 billion during 2007;  and total trade 
between the United States and Liechtenstein was US$300 million. 
81. Switzerland and Liechtenstein ha d reason to be pleased with the results of their economic 
reform efforts to date, but several areas – in partic ular agriculture – needed greater attention.  There 
was a glaring disparity between the openness of the tw o countries to trade in non-agricultural products 
and their high level of protection for agriculture, despite agriculture's marg inal economic importance 
(in terms of contribution to GDP and employment).  This has contributed to the high domestic prices 
of agricultural (and food) products, by internationa l comparison, despite the reforms under way in the 
sector. 
82. Agricultural tariff rates (all of them specific rates, based on gross weight that was always 
rounded up) remained highly disparate (with highly divergent AVEs).  The very high tariffs on agricultural products (WTO definition), of 29.4% on  average, were fifteen times the generally low 
rates, averaging 2%, on non-agricultural products.  The world's most competitive agricultural exporters had trouble exporting to these markets.  The EFTA agreements between the European 
Communities and Switzerland, and the EEA Agreement (for Liechtenstein) provided for free trade in 
most non-agricultural products but agricultural pr oducts were not yet subject to free trade. 
83. A number of specific agricultural policies c ontinued to concern the United States.  
Switzerland and Liechtenstein continued to apply a complex regime of automatic and non-automatic 
import licences.  Furthermore, under their SPS regi me, Switzerland and Liechtenstein allowed meat 
imports only from establishments the EC had recognized as complying with its requirements.  
Agricultural export subsidies, although scheduled for phase-out in 2010, continued to be of concern.  
Although outlays for export subsidies had fallen, an d remained far below the agreed maximum levels WT/TPR/M/208 
Page 18  
 
  for most product categories, Switzerland remained an  important user of export subsidies for dairy 
products and processed agricultural goods. 
84. Also, under the WTO Agreement on Agricultu re, Switzerland and Liechtenstein had 
undertaken tariff-quota commitments on 26 product cate gories covering 287 tariff lines.  Some of the 
quotas were administered through a non-automatic licensing system with different allocation 
procedures.  In 2007, quota-fill rates vari ed from zero to full utilization.  Under the prise-en-charge 
system, about which the United States had raised con cerns in 2004, traders were required to purchase 
similar domestic products in order to be allowe d to import.  The fill ratio for these quotas could 
change on a yearly basis, notably in case of strong import pressure that would require the use of an alternate, more restrictive allocation proce dure (e.g. auction), or in combination with prise-en-charge . 
85. Food manufacturing remained the most highly protected industrial activity in the customs 
union.  Tariffs were high, on average, and prohibiti ve in many cases, reaching 1,468.7% on edible 
frozen offal of bovine animals, other than tongue or  liver.  Furthermore, Switzerland's food processing 
subsector had been a major beneficiary of the e xport subsidy scheme;  a lthough export subsidies for 
processed products had declined in recent years, mainly due to agreement with the EC.  Food 
processing companies in Liechtenstein were eligible for the Swiss export subsidy scheme.  In contrast, 
Switzerland and Liechtenstein did not provide incenti ves specific to manufacturing;  and tariffs were 
low on most manufactured goods. 
86. Both countries were parties to the Agre ement on Government Procurement (GPA).  
Liechtenstein was one of only two GPA parties that had not submitted initial offers in the GPA market 
access negotiations.  The United States urged Liechte nstein to submit an initial offer in these 
negotiations as soon as possible. 
87. The services sector was the backbone of the Swis s and Liechtenstein economies.  The sector 
was of key importance for national income, employm ent, and foreign exchange generation.  The 
GATS commitments made by Switzerland and Liechtenstein largely reflected the state of liberalization of their respective economies.  The Un ited States appreciated the active participation of 
Switzerland in the current services negotiations. 
88. He noted that Switzerland and Liechtenstein  actively supported the multilateral trading 
system.  The United States shared important obj ectives with both countries, such as non-agricultural 
market access (NAMA), improved market access commitments in services, and the protection and enforcement of IPR.   
89. The representative of Australia
 noted the strong economic relationship between Australia and 
Switzerland.  Switzerland continued to be a major s ource of foreign investment for Australia, and this 
had brought significant benefits in terms of employment and new technology, and a deepening of their 
economic relations;  a diverse range of products a nd services were traded amongst the two countries. 
90. Australia welcomed the signing of the bilate ral air services agreement with Switzerland on 
28 November 2008, which would create further opportunities for increasing trade in goods and 
services. 
91. Australia noted that some of the key factors attributed to Switzerland's economic growth 
included the notable market liberalization with the EC on labour mobilit y and non-agricultural 
products.  Australia also noted that Switzerland ha d liberalized processed agricultural products with 
the EC and was exploring extending the agreem ent to cover all agricultural products.   
92. Australia welcomed the ongoing reforms by Switzerland and Liechtenstein particularly on 
investment, competition regimes, electricity market s and, in Switzerland's case, telecommunications  WT/TPR/M/208 
 Page 19 
 
 
  and financial regulation.  Howe ver, Australia remained concerned about the increasing trade 
imbalance with Switzerland, despite years of str ong GDP growth by Switzerland.  The imbalance was 
attributed to a number of factors, but most impor tantly to Switzerland's significant import barriers in 
areas of Australia's competitive advantage – partic ularly agriculture and certain services sectors.  
Regrettably, Switzerland's agriculture sector remain ed highly distorted and heavily protected.  In this 
regard, various reforms had been introduced by  Switzerland under the Agricultural Policy 2007 
initiative, leading to changes in law on agriculture during the review period.  For example, Australia 
welcomed the phasing out of export subsidies by  Switzerland for basic agricultural products by 
January 2010; it was necessary to ensure this initia tive achieved its objectives, specifically in relation 
to reduced domestic support and elimin ation of export subsidies.  Au stralia had concerns over policy 
reforms such as the use of the auctioning system for tariff-rate quotas on meat.  It welcomed new 
commitments under the Agriculture Policy 2011 in itiative to more than halve price support but 
remained concerned by continued high overall le vels of domestic support.   It questioned how 
Switzerland's network of free-trade agreements coul d cover "substantially all trade" when Switzerland 
retained such a high level of protection in agriculture. 
93. Australia had concerns about Switzerland's and Liechtenstein's bank secrecy provisions.  The 
financial crisis and recent tax-related events involving certain European banks had refocused 
international attention on the relationship be tween bank secrecy regimes and tax avoidance and 
evasion.  Australia would welcome Switzerland a nd Liechtenstein's recons ideration to lift bank 
secrecy for all tax purposes, which would facilitate th e renegotiation of Australia's bilateral tax treaty 
with Switzerland. 
94. Liechtenstein had signed a tax information ex change agreement with the United States on 
8 December 2008, and Australia woul d welcome a similar agreement.  
95. The representative of Chile  noted his country's long-standing relationship with Switzerland 
and Liechtenstein.  In the area of trade, Chile had signed an FTA with the four members of the 
European Free Trade Association, EFTA, in 2004.  Over the first three years of implementation of the 
Agreement, trade between Switzerland, Liechtens tein and Chile had grown by 75% and it had 
continued to grow during the current year.  Switzer land was a major investor in Chile.  Chile's trade 
with Liechtenstein was not large in scale, and its trade balance with that country was in deficit. 
96. He emphasized the importance of foreign trade for the economies of Switzerland and 
Liechtenstein, as well as of Chile.  The value of su ch trade was equivalent to 100% of GDP in the 
case of the European countries and to more than 80% in the case of Chile.  Not many WTO Members 
had such a high level of dependen ce on international trade.  Chile, like Switzerland and Liechtenstein, 
considered the strengthening of the multilateral tradi ng system as a priority.  Moreover, their countries 
shared similar views on NAMA, services, anti-dumpi ng, trade facilitation and fisheries subsidies. 
97. At the same time, there were differences in  the area of agriculture, where Swiss and 
Liechtenstein tariffs stood at 29.4% on average (com pared with 6% for Chile), and at almost 1,500% 
in the case of frozen bovine meat offal.  Switzerla nd continued subsidizing agricultural exports and 
applied a threshold price system for imports of  specific products in the same category.  Those 
measures distorted trade and adversely affected pr oducers in developing countries.  However, Chile 
expressed satisfaction at the announcement that e xport subsidies were to be phased out from 2010. 
98. Chile welcomed Switzerland's commitment to th e developing countries, especially the LDCs, 
which was evidenced by the access granted to expor ts from those countries since September 2007.  It 
also congratulated Switzerland on its active suppor t of various initiatives benefiting developing 
countries, such as the Enhanced Integrated Framework, Aid for Trade, etc.  WT/TPR/M/208 
Page 20  
 
  99. The representative of New Zealand
 noted that since its last trade policy review, Switzerland 
had enjoyed healthy economic growth, driven by improvements in external trade and private consumption.  The Secretariat's report also highlighted the rigorous fiscal policies adopted by the Swiss Government, which had helped it  to achieve a balanced budget.   
100. Trade between Switzerland and New Zealand was modest but there was considerable scope to 
build bilateral trade and investment based on their long-standing and friendly relations. 
101. New Zealand welcomed Switzerland's commitment to liberalize its trade regime through the 
multilateral trading system and through region al and bilateral agreements and commended 
Switzerland for removing protection and subsidies ac ross most of its sectors.  Many of the most 
successful sectors of the Swiss economy were also the most open. 
102. The agricultural industry, however, stood in contr ast to the efforts of the Swiss Government 
across other sectors.  The Secretariat's report noted th at agriculture remained "the most tariff protected 
sector" within the Swiss economy.  While there ha d been a small reduction in tariffs since 2004, 
tariffs on meat and dairy remained prohibitively high a nd further work needed to be done in this area. 
103. New Zealand welcomed Switzerland's move to phase out its export subsidies on agricultural 
products by January 2010.  Nevert heless, according to the Secretaria t's report, Switzerland remained a 
user of export subsidies for da iry products a nd processed agricultural goods, which remained of 
concern to New Zealand.  The Price Compensat ion Scheme, which compensated domestic food 
processors for the high domestic costs of raw materi als, highlighted the ine fficiencies that resulted 
from Switzerland's current agricultural policies.  New Zealand therefore encouraged continuing and 
ongoing reform of the agriculture sector, through the AP2011, which aimed to reduce price support 
and export subsidies, and through a liberalization of the highly restrictive market access regime for 
agricultural goods. 
104. While New Zealand had concerns regarding Swit zerland's agricultural sector, there was much 
to commend in the area of services and industria l goods, where Switzerland continued to be an 
advocate for liberalization.   
105. The representative of Hong Kong, China
 noted the good trade relations with Switzerland and 
Liechtenstein over the years.  Trade with the two countries represented about 1% of 
Hong Kong, China's total trade, and there was good potential for further expansion. 
106. Together with Hong Kong, China, Switzerland and Liechtenstein were well known as staunch 
supporters of the multilateral trading system, with services constituting a dominant part of the three 
economies.  They shared the same goal in pursuing continuous and progressive liberalization in trade 
in services and were striving to bring about a successful outcome on services by the conclusion of the 
DDA negotiations. 
107. In this connection, Hong Kong, China par ticularly appreciated Switzerland's active 
participation in market access and rule-making, in particular domestic regulation, in the DDA 
negotiations. and looked forward to  continuous and close cooperation. 
108. Hong Kong, China was pleased to note that Switzerland and Liechtenstein had no             
anti-dumping, countervailing or safeguard measur es in place.  It commended Switzerland's and 
Liechtenstein's efforts and commitments in cont aining the use of such contingency measures.  
Switzerland and Hong Kong, China shared the same  systemic interest in strengthening the WTO 
disciplines on anti-dumping.    WT/TPR/M/208 
 Page 21 
 
 
  109. Switzerland had continued its efforts to  streamline its customs procedures and 
Hong Kong, China commended Switzerland's active contributions to the negotiations on trade 
facilitation.  Both Switzerland and Hong Kong, China believed in the substantia l benefits that could 
be brought about by the implementation of such me asures, and had been working closely together on 
trade facilitation measures.  
110. Switzerland was continuing its process of harmonizi ng its technical regulations with those of 
the European Communities.  Hong Kong, China was al so pleased to note that some 95% of the Swiss 
standards in force corresponded to international st andards, up from 87% in 2000 and 92% in 2004.  
This facilitated the flow of international trade. 
111. According to the Secretariat report, the agricultu re sector was still subject to state intervention 
in Switzerland and Liechtenstein.  In particular, ag riculture had remained the most tariff-protected 
sector of the customs union, with a simple average tariff of 29.3%.  In addition, Switzerland's outlays 
for direct payments had remained high, reaching Sw F 2.5 billion in 2006.  Furthermore, measures such as export subsidies and tariff quotas also caused distortions to production and trade.  
Hong Kong, China encouraged Switzerland and Liechte nstein to step up efforts in reforming the 
agriculture sector so as to reduce such distortions. 
112. The representative of Japan
 was pleased to note the steady growth of the Swiss and 
Liechtenstein economies, led by rigorous fiscal polic y, exports, and private consumption.  This also 
had led to higher GDP per capita and declining unem ployment. The high ratios of external trade to 
GDP demonstrated that both countries were benefiti ng strongly from the multilateral trading system.  
At the same time, according to the Government repor t, the current financial crisis and world economic 
slowdown had inevitably had an impact on the Sw iss economy.  In this regard, Japan commended 
Switzerland for its ongoing efforts to overcome the crisis, such as financial support, protection of 
depositors, and interest rates policy.  An econom ic package and employment measures has been 
announced in November 2008. 
113. Japan also welcomed the trade diversificati on that had taken place since the last TPR, in 
particular regarding destinations for Swiss mercha ndise exports, and hoped this  trend would continue. 
114. Japan and Switzerland shared interests in many aspects of international trade and economy, as 
advanced countries as well as trade- and technolog y-based countries.  Their economic relationship of 
more than 140 years had entered a new stage.  Jap an was pleased to inform  Members that agreement 
in principle had been reached on the Agreement on Free Trade and Economic Partnership between 
Japan and the Swiss Confederation.  This in prin ciple included the elimination of tariffs on goods 
accounting for over 99% of the total value of imports in both countries within 10 years of entry into 
force;  the coverage of trade in services, investment , and intellectual property ri ghts would also be at a 
high level.  Japan hoped that this bilateral ag reement would further strengthen their bilateral 
relationship, particularly through trade and inv estment. Switzerland had announced its intention to 
proceed expeditiously with the aim of implementation in 2009. 
115. Japan shared common interests with Switzerland as well as Liechtenstein in the agriculture 
negotiations, as a member of the G10:  Japan and Switzerland had jointly proposed stronger discipline 
on export-restricting measures. 
116. Japan also appreciated Switzerland's efforts to improve its business environment.  In 
particular, Japan commended the amendment of the Swiss Code of Obligation, which entered into 
force in January 2008.  This am endment eased the requirement that the majority of members of the 
boards of directors of publicly traded corporatio ns had to be Swiss citizens with residence in 
Switzerland.  Japan had showed interest in this  point at the previous TPR of Switzerland.  WT/TPR/M/208 
Page 22  
 
  117. Japan welcomed the consolidation of the or ganizations Osec and LOCATION Switzerland 
under the Swiss Government, to integrate trade promotion and investment promotion functions. 
118. The representative of Brazil
 noted that Switzerland's commerce with Brazil had almost tripled 
from 2003 to 2007.  This trend was likely to continue , as bilateral trade had continued to increase in 
2008.  Bilateral trade flows had expanded nearly six-fold from 2003 to 2007 with Liechtenstein. 
119. Swiss investment in Brazil had been increasi ng considerably and Brazilian investment in 
Switzerland had also expanded, through the inst allation of branches of Brazilian companies. 
120. In the current context of global financial turm oil and the uncertainties relating to the Doha 
trade talks, Brazil noted with satisfaction that bot h Switzerland and Liechtenstein stressed in their 
reports their commitment to a rules-based, transp arent, and open multilateral trading system and the 
successful conclusion of the Doha Development Agenda;  this reflected the importance of 
international trade to both economies.  This commi tment was all the more necessary in agriculture, a 
theme of great importance to developing countries. 
121. A pointed out in Chapter I(1) of the Secretaria t's report, the contribution of agriculture to 
employment and GDP remained marginal in bo th Switzerland and Liechte nstein, whose economies 
were dominated by manufacturing and services.  Neve rtheless, the agriculture sector remained highly 
protected and subsidized; it was the most tariff-pro tected sector of the customs union, with tariffs 
reaching peaks of 1,469% on certain items.  Concer ning subsidies, it was quite disappointing that the 
level of domestic support continued to be so high, even though its growth had diminished since 2003 
according to the Secretariat's report, and that export s ubsidies were still largely in use.  Such practices 
distorted competition, contributing to maintain ing domestic prices high, and they prevented 
developing countries from access to high price market s for their exports, which would allow them to 
generate resources that would greatly assist economic growth and poverty reduction.  This aspect of 
trade policy contrasted with Switzerland's pledge  that it recognized the consistency between trade 
policy and development policy.  Agriculture's multif unctionality should not be used as an excuse to 
avoid liberalization.  Brazil hoped that Switzerland and Liechtenstein, based on their commitment to a 
fairer and pro-development trad ing system, would remain engaged to a conclusion of the Doha 
Round. 
122. Switzerland had highlighted the importance of pr otection of intellectual property with a view 
to promoting research, development,  and innovation.  Brazil shared th is objective, but drew attention 
to the need to grant access to some drugs for patients in developi ng countries.  The costs involved in 
the process of creation did not justify unreasonable prices for drugs that could mean the difference 
between life and death.  The Declaration on the TRIPS Agreement and Public Health, adopted in 
2001, had made an important contri bution in this respect, by clarifying that the Agreement supported 
public health, especially in promoting affordable access to existing medicines while also promoting 
research and development into new ones. 
123. The services sector was of key importance for both Switzerland and Liechtenstein;  
Switzerland was a strong "demandeur" in services  negotiations, having submitted requests to 50 
Members and targeting, for example, some profes sional categories in mode 4 (movement of natural 
persons), as mentioned in the Secretariat's report.  Its revised offer, however, did not include the 
category of independent professionals and simply  reflected the status quo for all sectors and 
subsectors. 
124. Brazil welcomed the Swiss legislation, put in place in July 2008, granting tax exemption for 
fuels produced with renewable resources provided th ey met environmental and social requirements.  
Brazil produced bio-fuel and believed that such me asures should be encouraged.  Brazil expressed its 
willingness to cooperate with Switzerla nd and Liechtenstein in this area.  WT/TPR/M/208 
 Page 23 
 
 
  125. The representative of Korea  referred to the excellent bilate ral relations with Switzerland and 
Liechtenstein.  Recently, this relationship had been further strengthened by th e conclusion of the Free 
Trade Agreement in 2005 under the umbrella of  the Korea-EFTA FTA. Since September 2006 when 
the Korea-EFTA FTA was put into effect, bilate ral trade with Switzerland and Liechtenstein had 
grown briskly, and trade was expected  to reach the US$3 billion in 2008. 
126. Switzerland and Liechtenstein had achieved solid  growth during the past four years, and 
despite a surge in energy and commodity prices, had successfully curtailed inflationary pressures;  this 
was a remarkable achievement.  Furthermore, both countries had kept their government finances in 
check, registering budget surpluses. Concurrently , in the manufacturing sector, where both countries 
enjoyed specialization in high-technology and knowledge-based production, both had successfully 
built upon their comparative advantag es, as evidenced by a remarkable 45% growth in exports during 
the review period. 
127. In general, the investment regimes of Switzerla nd and Liechtenstein, in particular the regime 
on services was open to foreign partic ipation.  However, the particip ation of state-owned enterprises 
in the services sector was still quite prevalent, and du ring the period under revi ew efforts to further 
liberalize these sectors had not been pursued.  In li ght of the efficiency gains and benefits that could 
accrue to consumers through the liberalization efforts,  he enquired whether there were plans to further 
liberalize the services sector. 
128. Switzerland and Liechtenstein had established in tricate regulations on mutual recognition of 
education, experience, and licences, within the fra mework of the Agreement on the Free Movement of 
Persons with the EC for Switzerland, and the EEA for Liechtenstein.  Due to this system, 
professionals from non-EC countries were now pr ovided with differentiated treatment when 
attempting to access the Swiss and Liechtenstein professional services market.  He asked whether 
there were plans to provide better access opportunities to non-EC professionals. 
129. The representative of the European Communities  (EC) said that Switzerland and 
Liechtenstein had built strong econom ic relationships with their Eu ropean neighbours through their 
membership of the European Free Trade Association.  Liechtenstein had taken a step further in 
joining the EC under the framework of the European  Economic Area.  Switzer land had sought similar 
economic relations with the EC, to those provided by the EEA agreement.  Since the last TPR, a 
second set of bilateral agreements had entered into force, which complemented the FTA signed in 
1972 and the bilateral agreements in  force since 2002.  They sought to further consolidate regional 
trade by enhancing free trade in goods and services,  and through measures aimed at tackling non-tariff 
issues, including convergence and approximation of regulations.  The EC being the main trading 
partner and investor in both countries, the EC believed that the pursuit of common regulations between Switzerland, Liechtenstein, and the EC would facilitate trade with the rest of the world.  
Their close cooperation went well beyond trade, and included education, social and economic 
cohesion, research, and environment.   
130. She highlighted the political and economic releva nce of the agreements on free movement of 
persons.  Almost one million EC citizens lived an d work in Switzerland and Liechtenstein, and many 
more crossed the borders on a regular basis.  T hus, it was important to ensure a smooth flow of 
workers and persons, which contributed positively to the economic growth of both countries.  The EC 
welcomed Switzerland's recent accession to the Schengen space. 
131. Switzerland's and Liechtenstein's policy statem ents underlined the steps they had taken to 
contribute to their common aim of promoting growth and sustainable development.  This included the 
integration of the less developed countries into the global trading system.  Both governments had 
extensive measures to assist developing countries and tackle the social and environmental dimension 
of globalization.  In particular, Switzerland strongl y advocated the multilateral dimension of trade and WT/TPR/M/208 
Page 24  
 
  social standards. The EC commended Switzerla nd for pursuing coherent multilateral policies, 
including closer cooperation between the WTO and the ILO. 
132. In spite of the overall very good trade relations , agricultural trade policy remained a matter of 
concern.  There was a significant disparity betw een Switzerland's openness to trade in industrial 
products and its high level of protection for agricu lture.  Despite its low contribution to GDP and 
employment, agriculture remained the most protected sector.  Taking into account tariff peaks, 
subsidies, and the administration and auctioning of tariff quotas, agricultural trade conditions 
remained highly complex and unpredictable.  Thus , the EC welcomed the measures in "Agricultural 
Policy 2011", which sought to substantially reduce price support and to gradually eliminate export 
subsidies.  However, the EC encouraged the Swis s Government to take further measures to reduce 
protectionist instruments in agriculture and to share with the Members future plans in this direction.  
The EC encouraged Switzerland to open its agricultu ral market progressively in the context of its 
ongoing and future free-trade agreements.  
133. The EC, Switzerland, and Liechtenstein had impor tant interests in common such as their    
long-standing support for the WTO system, and their desire to integrate developing countries into the 
international system and to let them benefit from trade liberalization.   
134. The representative of Colombia
 said that, during the period under review, the economies of 
Switzerland and Liechtenstein had c ontinued to exhibit high levels of  growth, together with high 
living standards and levels of stability.  Foreign tr ade played a fundamental role in those results, and 
so global economic conditions had a direct impact  on their economies.  Colombia hoped that the 
solidity and stability of their economies, combined with adequate internati onal coordination, would 
enable them to succeed in overcoming the nega tive effects unleashed by the financial crisis. 
135. With regard to trade policy, there had been  a considerable discrepancy and, indeed, 
inconsistency between the openness they were observed to be promoting in the manufacturing and 
services sector and the high level of protection in agriculture.  Not only did they apply high 
agricultural tariffs, of 29.4% on average, but those tariffs were specific, thus detracting from their 
transparency and increasing the import costs of cheaper competitors.  High tariffs on a number of 
products limited in-quota imports, and in such cases quota administration also became another form of 
protection.  Moreover, in the case of products used as animal feed and seeds, protection was 
intensified by import price thresholds.  According to OECD estimates, while assistance to producers 
had decreased gradually, it remained high (60%) in relation to the value of production and was a 
cause of distortion. 
136. Switzerland and Liechtenstein played an active role in the WTO and still had important tasks 
to perform in agriculture, particularly in the area of  market access.  The contributions of the G-10 and 
of its spokesman, Switzerland, were fundamental to the early and successful culmination of the Doha Round. 
137. Colombia maintained important economic and tr ade links with Switzerla nd and Liechtenstein.  
Bilateral trade amounted to more than US$1.2 billion, while direct investment in Colombia was of the 
order of US$500 million.   
138. The representative of Mexico
 noted that Switzerland and Liechtenstein formed the customs 
union with the highest per capita income in the wo rld.  Their economies had continued to grow from 
2003 onwards.  The share of trade in that growth had not been negligible.  However, he pointed out that the measures introduced by Switzerland and Liec htenstein in recent years to liberalize trade both 
with their neighbours and with a considerable number of other countries, including Mexico, had 
facilitated a rapid increase in their trade volumes.  Bilateral trade between Mexico and Switzerland 
and Liechtenstein had almost doubled since the entry into force of the FTA in 2001.  He pointed out  WT/TPR/M/208 
 Page 25 
 
 
  that the FTA in question was an agreement on free trade and deep integration, which extended to 
goods, services, investment, purchases, etc. 
139. The reforms introduced in recent years had enabled Switzerland to overcome various 
structural obstacles which had severely hampered  its economic growth up until 2003.  Trade policy 
had played an important role in those structural reforms, including a number of measures in the 
agriculture sector.  However, that sector remained highly protected, be nefiting from subsidies of more 
than 60% of the gross value of production.  One of the most important outcomes expected from the 
Doha Round would be precisely the global  rationalization of agricultural policy. 
140. The effects of the financial crisis and the ra pid appreciation of the Swiss franc had had a 
negative impact on recent trends and near-term forecasts for the economy of Switzerland and 
Liechtenstein.  Despite their high GDP per capita , both Switzerland and Li echtenstein had small 
populations, so that their economic growth was bound to be heavily based on exports of goods and 
services.  In that connection, Mexico hoped that th e measures introduced in recent weeks would serve 
to minimize the effects of the external shock created  by the global financial crisis and that growth 
would pick up rapidly in 2009. 
141. Although the structural reforms had been far-reac hing, competition in the areas of agriculture, 
services, health and public transport remained limite d, and that had an effect on consumers.  Mexico 
encouraged Switzerland to open up those sectors in  order to bring down prices.  In the case of 
manufactures, the average MFN tariff was lower, but tariff peaks remained on certain products. 
142. Services were of considerable importance to Switzerland and Liechtenstein, in terms of both 
GDP share and employment.  Their commitmen ts under the GATT and the Uruguay Round were 
significant but no greater than the liberalization effected autonomously. 
143. The representative of Chinese Taipei  noted the close bilateral trading relationship with 
Switzerland, adding that two-way trade had increased;   the trend and relationship with Liechtenstein 
had remained stable.  Chinese Taipei and Switzer land and Liechtenstein shared similar views on 
several of the key issues in the DDA negotiations, in cluding agriculture, NAMA, services, and       
anti-dumping.  In particular, they worked closel y within the G-10 on the agricultural negotiations.  
There was potential for even greater cooperation in the future.   
144. His delegation had addressed a number of writte n questions to Switzerland and Liechtenstein 
in advance, and thanked Switzerland an d Liechtenstein for their answers.  
145. The representative of Peru  congratulated Switzerland and Liechtenstein on opening up trade 
in the non-agricultural sector and acknowledged that  they faced important challenges relating, 
inter alia , to the high level of agricultural protection a nd certain restrictions in the services sector. 
146. Switzerland and Peru maintained excellent relati ons in all fields.  In addition to seeing an 
improvement in their commercial exchanges, the EF TA countries, including Sw itzerland, had recently 
concluded a free trade agreement with Peru, which was expected to enter into force in the first quarter 
of 2009.  Peru was confident that the agreemen t would offer new opportunities for their businesses 
and benefits for their populations.  Like Sw itzerland and Liechtenstein, Peru believed in 
complementarity between bilateral, regional and mu ltilateral initiatives aimed at trade liberalization.  
Accordingly, it hoped to see rapid and ambitious outcomes from the Doha Development Round, in 
addition to a successful conclusion to  the bilateral negotiating process.  
147. The representative of Canada  said that the close trade and investment relations between 
Canada, and Switzerland and Liechte nstein were continuing to grow  stronger.  In 2007, Switzerland 
had ranked 17th amongst its partners for trade in goods, which stood at US$3.5 billion, more than WT/TPR/M/208 
Page 26  
 
  160% higher than in 2002.  Switzerland ranked fifth for foreign direct investment (FDI) in Canada, 
and 12
th as a destination for Canadian FDI.  Canada hoped that these productive and dynamic 
economic relations would continue. 
148. Since 2004, the economies of Switzerland and Liechtenstein had expanded considerably.  
Their GDP had increased in 2006 and 2007, and the government budgets had been showing a surplus 
for the past two years.  Swiss economic expansi on had been backed by a growth programme which 
recognized the importance of an open and effici ent trading system, and which included several 
reforms aimed at stepping up competition on the dom estic market and pursui ng economic integration 
with the rest of the world.  Although no economy would be spared the effects of the current world 
economic downturn, Switzerland and Liechtenstein's solid economic ba se would help them to pull 
through.  Switzerland and Liechtenstein's economic  prosperity depended heavily on international 
markets.  Canada commended them for their commitment to the multila teral trading system and their 
active role in the Doha negotiations, to which Switz erland made a particular contribution as Chair of 
the NAMA Group.  Canada and Switzerland were coope rating on several issues and shared the same 
objectives on NAMA, both hoping for a result that would include sectoral agreements.  Canada 
appreciated Switzerland's role in the negotiations  on trade facilitation and had cosponsored several 
proposals.  
149. Trade and investment were an important driv ing force of the economies of Switzerland and 
Liechtenstein, and both had relatively open econo mies.  Both Switzerland and Liechtenstein had 
established favourable conditions for investors.  Si nce their last trade policy review, both had made 
amendments to their customs laws that had facilit ated circulation of merchandise at the border and 
improved competitiveness.  
150. The Swiss Competition Commission had undertak en a number of enforcement activities 
regarding cartels and had declared that combating cartels and abuses by dominant firms were future priorities for their competition authority.  The Swiss Competition Commission was active in several international competition law and policy fora, such  as the Competition Committee of the OECD and 
the International Competition Network (ICN).   
151. Canada encouraged Switzerland to extent its commitment to trade liberalization to 
agriculture.  The elimination of export subsidies, substantial reductions in trade-distorting domestic 
support, and improvements in market access for all agriculture and food products would be beneficial 
both to Switzerland and its trading partners.  Canada recognized the significant steps that had been 
made in this regard, and looked forward to the continuing reform of agricultural policies by 
Switzerland and Liechtenstein. 
152. Switzerland and Liechtenstein had complemented their participation at the multilateral level 
with various regional trade liberalization initiatives.   Along with their EFTA partners, Switzerland and 
Liechtenstein had negotiated 18 free-trade agreements  and five declarations of cooperation.  Canada 
had signed an FTA with Switzerland and Liechtenste in and its EFTA partners in January 2008. 
153. The representative of India
 said that Switzerland and Liechtenstein were both highly 
developed countries that had always attached great  importance to international trade, which was a 
vital component of their economies and a major contributor to their economic prosperity.  Both economies had performed well in recent years, un til the economic downturn that had begun earlier in 
2008.  The services sector, which included banking, had been deeply affected.  The banking sector in 
the two countries played an important role in th e global economy, and he hoped the troubles would be 
short lived.  
154. India and Switzerland had always enjoyed cordia l and friendly relations.  Switzerland was the 
first country with which India ha d concluded a Treaty of Friendship and Establishment of Diplomatic  WT/TPR/M/208 
 Page 27 
 
 
  Relations in 1948.  Both countries were committed to transforming the existing relationship to a 
"privileged partnership", based on more diversified cooperation.  
155. Diplomatic relations between India and Liech tenstein had been established about a decade 
and half ago and since then had been  intensifying bilateral contacts. 
156. The trade and economic relations between Indi a and Switzerland had expanded steadily since 
the 1990s following India's economic reforms.  Th e conclusion of several bilateral agreements, on 
avoidance of double taxation, collaboration in  biotechnology, promotion and protection of 
investments, air services, and science and technology had further deepened the relationship.         
India-Swiss trade had continued to witness healthy growth.  The balance of trade had remained in 
favour of Switzerland. 
157. Switzerland was amongst the top ten foreign direct investors in India.  Around 150 Swiss 
companies had joint ventures or subsidiaries in India;  and Switzerland was likely to receive substantial Indian investments in the near future , as it offered attractive advantages as a business and 
investment location. 
158. India and the EFTA had initiated negotiations for a broad-based trade and investment 
agreement;  it was hoped that the agreement would assi st in further expanding trade and investment 
relations between India and the EFTA region. 
159. While Switzerland generally had an  open trade regime, the agriculture sector remained a loud 
exception.  Subsidies continued to play an importa nt part in sustaining Swiss agriculture, with its 
Producer Support Estimate at 65% of gross receipts from agricultural products.  Reforming agriculture was not easy, and while India was mindful of Switzerland's efforts in this direction, much 
remained to be done.  Export subsidies for basic agricultural products were to be phased out by 
January 2010;  however, other constraints, such as high tariffs and specific duties abounded.  India 
hoped that Switzerland could address these issues in the ongoing negotiations by accepting an 
ambitious outcome in tariff simplification and tariff capping. 
160. Switzerland and Liechtenstein were largely ser vices economies;  however, their regime was 
fairly restrictive regarding access of foreign nationals  to the services sectors.  Access, where available, 
was subject to a quota system, labour market tests, an d wage and employment controls.  In its mode 4 
revised offer, Switzerland was yet to meet the pl urilateral request substantially.  The category of 
independent professionals was not included in their o ffer.  Further, even the category of contractual 
service suppliers covered a limited number of sectors and included restrictive conditions on duration 
of stay (only three months).  As a competitive services sector was crucial to the overall 
competitiveness of the economies of the two countries, India hoped that they would take early 
corrective steps to liberalize the regimes in various services sectors. 
161. The representative of Norway
 said that as Switzerland's and Liechtenstein's reports 
confirmed, their governments remained deeply committed to a strong multilateral trading system. 
Norway recognized and appreciated their active participation in the WTO. 
162. Switzerland and Liechtenstein bot h had open economies, with lo w tariffs and generally few 
restrictions on trade in goods and services, or on foreign investment.  Both refrained from applying 
anti-dumping and countervailing measures.  They had not imposed any safeguard measures since their 
previous TPR. 
163. Switzerland and Liechtenstein attached importanc e to non-trade concerns in agriculture, and 
Norway understood and appreciated these concerns. WT/TPR/M/208 
Page 28  
 
  164. Switzerland and Liechtenstein remained among th e wealthiest countries in the world and had 
enjoyed steady economic growth in the period under review.  Along with all other countries with open 
economies, they would be challenged by the global economic slowdown.  The financial crisis at the 
heart of the current turmoil had brought the issue of financial market supervision to the forefront.  In 
the light of this, she was pleased to note the establishment of a unified and independent financial 
market supervisory authority in Switzerland from 1 January 2009.  Positive legislative projects had 
been put forward in order to strengthen and mode rnize the financial centre in Liechtenstein.   
165. Norway, Liechtenstein, Switzerland, and Iceland constituted the European Free Trade 
Association.  They enjoyed a long-standing partnership and continued to cooperate very closely to develop free-trade relations with an increasing numbe r of partners in their immediate neighbourhood 
as well as further a field.  Liechtenstein and Norway  were also partners in the development of the 
Agreement on the European Economic Area, which e ffectively extended the internal market of the 
European Union to the three EFTA states Iceland,  Liechtenstein, and Norway.  Norway welcomed 
Switzerland's recent participation in the Schengen Agreement. 
166. Norway had close cooperation with Switzerland and Liechtenstein in a number of areas in the 
DDA.  They cooperated very closely in agriculture  and their positions were well known.  In NAMA, 
their ambitions and priorities corresponded closely.  In all three countries, services was one of the most important sectors for foreign earnings;  this wa s reflected in their positions and priorities in the 
DDA negotiations.  Both Switzerland and Norway had supported the establishment of a list of 
environmental goods for which trade would be facilitated. 
167. The representative of Singapore
 noted that Switzerland and Li echtenstein had generally open 
economies, and both consistently ranked high on quality of life indices.  Their services sectors were 
particularly highly developed, with well known stre ngths in banking and financial services.  In a 
recent Newsweek  article, Switzerland had been praised for acting decisively to bring the financial 
situation under control in a mere three weeks.  In  particular, its swift response was seen as a model on 
how to best tackle the global financial crisis. 
168. As members of the EFTA, Switzerland and Liech tenstein had signed a landmark FTA with 
Singapore in 2002.  The EFTA-Singapore FTA, or ESFTA, had given a significant boost to their  
trade, and EFTA's investments in Singapore had almo st doubled since 2003.  Economic relations were 
well-developed with Switzerland, which was one Singapore's top ten investors.  This, contributed 
significantly to Singapore's growing biologics and pharmaceutical manufacturing industry.   
169. Singapore's economic links with Liechtenstein, t hough small, were relatively diversified and 
export-oriented, with a focus on industry, manufact uring, and services.  However, there remained 
much potential for growth.   
170. Both Switzerland and Liechtenstein had demons trated that with the appropriate economic 
strategies and a competitive edge achieved by bu ilding excellence in selected niche areas, small 
countries could enjoy sustained economic growth and prosperity.  As economies that depended 
strongly on free and open international trade, they ha d clear interests in a successful conclusion of the 
Doha Round, and he commended Sw itzerland and Liechtenstein for th eir active and constructive role 
in the WTO.   
171. The representative of Honduras  noted the economic growth recorded in both economies and 
the structural reforms carried out by Switzerland and those which it planned to implement over the 
next few years in order to improve its compe titiveness.  Honduras and Switzerland had concluded a 
series of agreements on investment, promotion and technical cooperation.  Moreover, Switzerland had 
helped Honduras to reduce its debt and had c ontributed to development aid programmes by  WT/TPR/M/208 
 Page 29 
 
 
  supporting sectors such as environmental protecti on, hydroelectric energy and drinking water 
services. 
172. Honduras recognized the work done by the Swiss Agency for Development and 
Cooperation (SDC), which focused on promoting sm all enterprises, managing public finances and 
providing infrastructure services at local level.  
173. The representative of El Salvador  observed that Switzerland and Liechtenstein were among 
the richest countries in the world and that they enjoyed average growth rates of 2.7 and 2.2%, 
respectively, owing to the impetus provided by exports and private consumption.  Switzerland was 
responsible for formulating monetary policy for bo th countries, and under the terms of the Customs 
Union Treaty between the two Members, Switzerland acted on behalf of Liechtenstein in matters 
related to the customs union, such as trade policy measures which might affect imports and 
agricultural policy.  The biggest sector in Switzer land and Liechtenstein was that of services.   
174. Switzerland and Liechtenstein had pursued a strate gy of trade liberalization at the multilateral, 
regional and bilateral levels, with a view to re forming their economies and liberalizing their trade 
regimes.  Nevertheless, restrictions on investment were still in place. 
175. The manufacturing sector specialized in produc ing high-technology goods which, together 
with processed agricultural products, constituted Swit zerland's main exports.  The agriculture sector 
was highly protected, and that had contributed to domestic prices for agricultural and food products 
being maintained at a high level compared with ot her Members.  Switzerland continued to subsidize 
exports of agricultural products, mainly by mean s of the price compensati on mechanism.  Following 
an evaluation of its subsidy programmes, however , Switzerland planned to phase out export subsidies 
for basic agricultural products by January 2010 at the latest. 
176. In the field of intellectual property, Swiss legisl ation had been revised to cope with the "pace 
of technological change", and to continue the pro cess of harmonization with the legislation of the 
European Communities and the latter's other trade ag reements with various Members.  Liechtenstein, 
for its part, used Swiss legislation on patents, but had its own laws on copyright, trademarks and 
industrial designs.   
177. The representative of Ecuador  noted the vital role played by foreign trade in the economies of 
Switzerland and Liechtenstein, which explained the im portance they attached to the strengthening and 
proper functioning of the multilateral trading system. 
178. Switzerland and Liechtenstein were two of the ri ches countries in the world.  Both had made 
the most of their comparative advantages, particul arly in the manufacturing sector, where they had 
specialized in the production of high-technology g oods, as well as in the services sector, which was 
the main employer in both countries and accounted for more than 70% of GDP in Switzerland and 
slightly over half of GDP in Liechtenstein. 
179. Despite its low contribution to GDP and employme nt in both countries,  the agriculture sector 
was still subject to substantial State intervention and continued to be highly protected, with an average 
tariff of 22.7% and a wide range of support meas ures for producers, such as the subsidies which 
Switzerland granted for exports of agricultural pr oducts by means of price reductions or direct 
contributions to subsidize inputs.  Although the leve l of aid to producers in both countries had fallen 
from 71% in 2002-06 to 60% in 2005-07, that figure was still 2.3 times higher than the average level 
of support in the OECD countries.  That was a cause of special concern for Ecuador, whose           non-petroleum exports consisted mainly of agricultura l products, since policies of that kind restricted 
access to the markets of those two countries. WT/TPR/M/208 
Page 30  
 
  180. Ecuador's trade relations with Switzerland and Liechtenstein fell short of the desired levels.  
However, a sustained increase in trade had been re corded in recent years in the case of Switzerland, 
and Ecuador trusted that th at trend would continue. 
181. The representative of Turkey
 noted that Switzerland and Liech tenstein gave great importance 
to the multilateral trading system and support for free a nd fair trade, as reflected in their foreign trade 
policies.  As a result of these policies, the two c ountries had built one of the most stable, competitive, 
and richest economies in the world.  They also  hosted several of the world's most competitive 
enterprises in insurance, banking, medical, and pharmaceutical products. 
182. Switzerland's economy was the 2nd most competitive in the world.  The private sector played 
an important role in the Swiss economy and taxes were low.  Doing business in Switzerland was easy. 
183. Economic growth in Switzerland had been good,  and unemployment low.  Switzerland had 
introduced a "growth package" in 2004 containing measures aimed at promoting productivity;  
however, some of these had not been implemented.  Labour productivity had declined, compared with 
many other high-income OECD countries, since th e late 1990s, because of high labour costs and the 
weaker performance in sectors that were protected  from global competition.  Therefore, Switzerland 
needed to take steps to fully implement the "growt h package" and to allow it to maintain its position 
as a leader in innovation. 
184. Financial services were very important for Switzerland and Liechtenstein but, given the 
current financial crisis, financial activities in both economies were expected to shrink in 2009.  Some 
measures had been taken to deal with the crisis, and he asked for further details on how they might 
maintain their growth and compe titiveness in the near future.  
185. Turkey appreciated the commitment of Swit zerland and Liechtenstein to the multilateral 
trading system and their active and constructive role  at the WTO.  Turkey shared many views with 
them in the ongoing DDA negotiations, in particular a successful outcome of the Round in improving market access for goods and services, enhancing the existing rules, and integrating developing 
countries gradually in global trade.   
186. He mentioned that Turkey and Switzerland ha d unique, close bilateral relations based on 
wide-ranging economic and commercial ties, as well as a shared history.  Turkey was an important trade partner and a promising market for Switzerland;   the volume of bilateral trade had increased 
since 2004, and Switzerland was one of the biggest investor in Turkey.  An FTA had been signed between EFTA and Turkey in 1991. 
187. Energy was a vital issue for both parties, and there could be new opportunities for increased 
international cooperation, especially with the European Communities and other energy-producing 
countries.  Turkey believed that special attention ha d to be paid to the energy transit countries, like 
Turkey, not only in the formulation of new energy strategies with a view to securing energy supply, 
but also in every effort to strengthen the ex isting multilateral trading rules, such as ongoing 
negotiations on trade facilitation. 
188. The representative of Nigeria
 acknowledged Switzerland's cont ribution to the multilateral 
trading system and its support for the opening up  of markets to products from the LDCs, as well as 
enhanced technical assistance for developing count ries to facilitate their integration into the 
multilateral trading system.  Nigeria recognized th e active participation of Switzerland in the DDA 
negotiations, generally acknowledged through its leadersh ip of the G10.  Nigeria together with a large 
group of countries was working with Switzerland on TRIPS issues.  WT/TPR/M/208 
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  189. Nigeria enjoyed excellent bilateral trade and economic relations with Switzerland.  Nigeria 
was one of the Switzerland's most important African tr ade partners and a major supplier of crude oil.  
In addition, agreements on aviation, investment  assistance, and investment protection had been 
signed.  Nigeria appreciated Switzerland's continued s upport in its efforts to tackle its various      
socio-economic problems, within the bilateral and multilateral frameworks. 
190. Switzerland was to be commended for its hi ghly successful market economy based on 
international trade and banking.  It enjoyed a worldwide reputation for the high quality of its 
manufactures and had become one of the world's mo st important financial ce ntres.  Switzerland and 
Liechtenstein were amongst the wealthiest countries in  the world in 2006, and were dominated by the 
services sector;  their manufacturing sectors were  largely specialized in high technology and 
knowledge-based production, reflecting their comparative advantage.  However, the agriculture sector 
had remained highly protected despite its marginal  economic importance in terms of contribution to 
GDP and employment.  This situation, unfortunately , had led to the continuing high domestic prices 
of agricultural products, by international comparis on, despite the ongoing reforms in the sector.  
Nigeria believed that further liberalization in agri culture could enhance the efficient allocation of 
resources and consumers welfare. 
191. The representative of Pakistan  noted that Switzerland's and Liechtenstein's GDP per capita 
was over US$50,000 each in 2006, and that growth in both countries was largely driven by exports 
and private consumption;  this could become ch allenging during the coming years in the wake of a 
global economic slowdown.  However, due to strong fundamentals and prudent macroeconomic 
management, these robust economies had escaped the de vastating effects of the "bubblenomics" being 
experienced in a number of economies at a global s cale.  Trade was important in both economies.  
Switzerland was the 12th largest bilateral and multilateral donor of aid (as a percentage of GDP) and 
several other global indices showed very positive results.  These were the end product of sound 
macro and microeconomic policies, and balanced participation in th e international trading system. 
192. The two countries had harnessed the benefits of  several bilateral and multilateral trading 
arrangements, and through their EFTA membersh ip had concluded several FTAs with trading 
partners.  
193. However, a number of trade distorting practises were still in place in the agriculture sector.  
Switzerland had allowed market access without cu stoms duties or quotas to all imports from LDCs 
with the exception of sugar, and was planning abo lish all export subsidies on all basic agricultural 
commodities;  but, at the same time, direct payments  to farmers remained a central part of future 
agricultural policies.  He noted that reforms in th e agriculture sector would be undertaken at a pace 
that permitted "socially acceptable development", and asked for clarification in this regard. 
194. A number of NTBs also needed to be looked into, while investment restrictions were 
maintained in areas under state monopolies, including rail transport, postal services, insurance, and 
other commercial services.  Domicile requirements we re in place in the hydroelectric sector, including 
operation of oil pipelines.  In Liechtenstein, some controls on the purchase of real estate, and other 
restrictions on a number of financial services were still in place.  All these sen sitivities needed to be 
fixed. 
195. There was a wide trade imbalance as Switzerland's exports to Pakistan far outweighed its 
imports from Pakistan.  Pakistan hoped that Swit zerland would take steps to narrow this gap. 
196. The representative of Burkina Faso  said that the Trade Policy Review of Switzerland and 
Liechtenstein reflected the Secretariat's determina tion to apply the operational rules.  International 
trade played a vital role in the Swiss economy and had been one of the main driving forces behind its 
growth since 2004.  Switzerland attached great impor tance to the opening up of markets in goods and WT/TPR/M/208 
Page 32  
 
  services.  The main objectives of its foreign trad e policy strategy included increased competition in 
the domestic market and integration of the developi ng and transition countries in the world economy.  
Burkina Faso welcomed Swiss economic devel opment cooperation, and hoped to intensify its 
excellent cooperative relations with  Switzerland.  It was on the priority list for Swiss development 
cooperation.  The SECO programme had focused on the fight against poverty by strengthening 
macroeconomic stability while fostering private sector development, and Burkina Faso was grateful to 
Switzerland for its support.  As the coordinator of the cosponsors of the Sectoral Initiative in Favour 
of Cotton, Burkina Faso thanked Switzerland for its partnership through the NGO Ideas Centre which, 
since 2003, had helped to train many in the cotton sector.  As an LDC, Burkina Faso welcomed    
duty-free, quota-free market access for at least 97%  of tariff lines for LDC products.  Switzerland was 
not immune to the economic turbulence caused by the international financial crisis, and Burkina Faso 
hoped that it would be quick to overcome these econom ic difficulties that could slow its development, 
and above all, adversely aff ect its development assistance. 
  WT/TPR/M/208 
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  VI. REPLIES BY THE REPRESENTATIVES OF SWITZERLAND AND 
LIECHTENSTEIN, AND ADDITIONAL COMMENTS 
197. The representative of Switzerland  noted that some issues raised by Members (e.g. agriculture) 
had been more expected than others (e.g. the sa lt monopoly).  Switzerland had received and replied to 
264 questions.  The representative encouraged Member s to read the statement prepared for the second 
session as it provided details on all technical qu estions.  Members had recognized and trusted 
Switzerland's work in the WTO.   
198. The discussant, as well as the representatives of Canada, China, Norway, and Singapore had 
raised questions on the economic environment.   The Government had taken specific measures 
effective in early 2009.  It did not decide on a budgetary stimulus package because:  (i) it was not 
convinced of the effectiveness of su ch a package;  (ii) a package would be at the federal level only, 
and the federal budget comprised only one third of the Swiss budget;  (iii) measures consisting in 
reducing taxes or giving more money to house holds would not only stimulate savings but induce 
consumption of imported goods;  and (i v) experience showed that the ef fect of a packag e always came 
too late.  Very limited measures rela ted to one large bank had been ta ken in response to the financial 
crisis.   
199. Australia, the EC, Korea, and Chinese Taipei had raised questions on Switzerland's 
institutional framework and FTAs.  The WTO was Switzerland's priority.  Its FTAs complied with the WTO and went somewhat further as some dealt with services or new issues (e.g. competition and investment).   
200. Regarding questions from Argentina, Colombia , Chile, India, and Korea on specific issues 
regarding investment conditions, taxes, and work pe rmits, details were available in the statement.  
201. The issue on specific duties had been raised by the discussant, El Salvador, and New Zealand.  
Switzerland was the only Member to apply only speci fic duties;  having a different system did not 
mean that it was bad.  It was simple, predicta ble, transparent, and complied with the WTO.  
Switzerland would implement any DDA decisions on specific duties.   
202. Questions had been raised on state enterprises (Korea, Mexico, Pakistan, Chinese Taipei, and 
discussant) and on the salt monopoly.  The salt monopoly was a historical, cantonal monopoly introduced when, for health reasons, iodine was a dded to salt to combat goitre, and to ensure 
affordable prices.  It would not be removed in the near future.   
203. Regarding the several questions on rail transpor t, the Secretariat Report had not been totally 
accurate, as the monopoly on rail transport related only to the transport of passengers.  Transport of 
merchandize was liberalized;  as such, it had been re moved from the Swiss-EC bilateral agreement.   
204. Colombia and Brazil had raised questions on th e alcohol monopoly.  No restrictions were 
maintained on alcohol up to 80° or on bio-fuels.  A new law encouraged sust ainability for bio-fuels, 
which could be exonerated from ta xes under specific conditions.   
205. Switzerland was harmonizing its standards with the EC's to simplify export procedures;  
exports to Switzerland would face the same measures as exports to the EC.  
206. A specific issue on GMOs was raised by Ca nada and the United States.  The Swiss 
moratorium on the cultivation of GM crops resulted from a popular vote.  Only the cultivation of GM 
crops and imports of GM livestock were subject the moratorium but not imports of GM food nor 
research.  Before the moratorium had been put in  place, there had been no demand for the cultivation WT/TPR/M/208 
Page 34  
 
  of GM crops.  The absence of demand showed that pe ople were not interested in this kind of export to 
Switzerland.  The representative did not exp ect the moratorium to end in 2010.   
207. Full details on the labelling of  eggs and on the competition law were available in the 
statement.  
208. Agricultural reforms had been taken and were  ongoing.  However, Members did not seem to 
appreciated this.  Over 1992-06, agriculture had lost  a third of its production value, jobs, and farms, 
and this had been difficult.  Under the DDA, Switze rland would have to face similar actions.  As the 
results of DDA might be submitted to a refere ndum, Switzerland would have to explain to its 
population that being a Member to the WTO was still in its interest, despite very big concessions in 
agriculture.  Switzerland would pay a high price if its citizens were to decide that it was not worth it;  
this should be more appreciated.  Members had asked whether lower pric es for consumers and 
producers would be in Switzerland's interest.  In  this regard, the Government was committed to 
agricultural reform through the Agricultural Polic y 2011 and the FTA negotiations with the EC, which 
would cover 70% of Swiss imports.  However, for the reasons explained, Switzerland had to adopt a 
stepwise approach to reforms.  These had to be unde rstood by the public and be socially bearable.   
209. Questions were raised regarding electricity, construction, services, work permits, and the 
monopoly on insurance for fire and on natural damage  to buildings.  A new agreement with the EC on 
construction should ease up procedures.  Information could be found in the statement.  
210. The representative of Liechtenstein
 thanked Members for their interest, statements, and 
interesting questions.  As Switzerland was competen t on behalf of the customs union for trade policy 
measures affecting imports and exports of goods, answers and comments given by Switzerland 
covered Liechtenstein.  Written responses to ques tions addressed specifically to Liechtenstein had 
been delivered.   
211. The discussant had asked what safeguards were being put in place to make banking more 
transparent, expose fraud, and increase prudential re quirements and regulations of the banking sector 
to reduce systemic risks, and what lesson the Swiss and Liechtenstein economies had drawn from the 
current financial crisis.  China and Turkey had asked how Switzerland and Liechtenstein would deal 
with possible challenges from the economic crisis. 
212. The recent financial turmoil had revealed poor business and risk management in the financial 
sector of many countries;  the United States and Europe had acknowledged insu fficient regulations in 
their financial markets.  The United States and several European governments had implemented a 
broad range of measures to im prove liquidity and balance sheet s of large domestic financial 
institutions.  Liechtenstein had established a monito ring group but was not considering taking special 
action.  
213. In 2005, the new Liechtenstein Financial Market  Authority (FMA) had started operating.  It 
was an integrated, independent, financial supervis ory authority to safeguard the stability of the 
financial market, protect clients, prevent abuse,  and implement interna tional standards.  The 
Parliament had agreed to increase further the FMA budget and staff to fulfil its core responsibilities.  
Liechtenstein followed closely inte rnational trends and discussions of relevance on financial services;  
these included discussions in international organi zations (UN, IMF, OECD) and standard-setting 
bodies, but also within the EC and the EEA or at a bilateral level.  It im plemented and met all EC 
standards subject to monitoring mechanisms within the EEA.  Some of Liechtenstein's recent measures had already been mentioned.  Parliame nt had approved the third EC money laundering 
directive;  the relevant laws would enter into force in 2009.   WT/TPR/M/208 
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  214. The discussant had asked what efforts were being made to increase competition in the 
economy.  There were no concrete measures to  increase competition further in services or 
manufacturing.  Succeeding in a globalized world was a challenge that Liechtenstein's economic actors had been facing for decades;  and as Liechtenstein had no natural resources and an extremely limited local market, they had had to orient them selves outwards.  Dynamic world markets had forced 
them to improve their productivity and increase their competitiveness.  Responding to the United 
States, the representative said that Liechtenstein in tended to submit its offer in the GPA negotiations 
during the meeting of the Committee in February.   
215. Korea had asked whether there were plans to libera lize services further.  In the past few years, 
Liechtenstein had liberalized telecom, postal, a nd transport services, as well as its energy market.  
Liechtenstein followed closely all trends in servi ces and analysed the needs of the economy.  There 
were no current plans to liberalize services further;  and Liechtenstein had no plans to provide better 
access opportunities to non-EC professionals.  
216. In response to Ecuador, the representative said th at Liechtenstein did not foresee any strategy 
to overcome the high production costs that  had limited investment opportunities.   
217. Switzerland had fully answered the numerous questions on the customs union agricultural 
policy.  Agriculture in Liechtenstein was very sm all;  political support to keep it viable was very 
broad and popular.  However, Liechtenstein was prepar ing its farmers for future challenges in an even 
more market-oriented and competitive environment.  Liechtenstein's agricultural policy had to take 
into account non-trade concerns and multifuncti onality.  The ambitious goals and production 
conditions imposed on farmers could only be justifie d with direct payments otherwise agriculture 
would disappear.  As one of its members, Liech tenstein stood firmly behind the G10 policy. 
218. The discussant
 noted that the large number of participan ts and great interest displayed showed 
clearly that Members considered Switzerland and Liechtenstein as important trading partners and valued their contribution to the WTO, in particular Switzerland's contribution as host to the WTO and in facilitating the Doha Round.  The Swiss and Liech tenstein economies were highly integrated into 
the world economy, especially in financial services.  Their responses to the current financial crisis 
were of vital importance to Members, who would ob serve their actions very keenly.  Members asked 
Switzerland (in particular) and Liech tenstein to make further reform s in agriculture and encouraged 
them to continue their efforts.  Members appreciat ed Switzerland's contribution to development;  they 
looked to Switzerland and Liechtenstein to play a br idge-building role in the WTO, to continue to 
provide leadership in building coherence between trade and development policies, and to contribute 
towards a more inclusive and development-friendly WTO.  
219. The representative of the EC
 thanked Switzerland and Liechtenstein for their very 
comprehensive replies.  The EC had omitted to po se a question on the lack of reference to other 
requirements laid down in rules of origin;  it would submit this in writing.  The EC was confident that 
its very close cooperative relations with Switzer land and Liechtenstein would continue at the 
multilateral and bilateral levels.   
220. The representative of Rwanda  said that Switzerland had been one of the countries to 
implement early duty-free quota-free market access for LDCs.  WT/TPR/M/208 
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  VII. CONCLUDING REMARKS BY THE CHAIRPERSON 
221. The third joint Review of Switzerland and Liech tenstein has been informative, open, and 
thought-provoking.  The delegation of Switzerland, le d by Her Excellency Ambassador          
Ineichen-Fleisch, and the delegati on of Liechtenstein, led by His Ex cellency Ambassador Frick, have 
been highly cooperative.  We have  greatly benefited from the perceptive remarks by our discussant, 
Mr. Faizel Ismail of South Africa, and the active involvement of many Members.   
222. Members commended Switzerland and Liechtens tein on their economic performance in 
recent years, and stressed that external trade, in cluding access to foreign markets, is central to both 
economies.  Members appreciated the commitment a nd support by both countries to the multilateral 
trading system, particularly Switzerland's technical  cooperation efforts in favour of developing and 
acceding countries.  Members also noted that both countries are participating in various free-trade 
arrangements.  In particular, Switzerland's bila teral agreements with the expanding European 
Communities (EC) have resulted in notable market  liberalization between the two partners, and 
considerable convergence of Swiss re gulations to those of the EC.  Li echtenstein is a member of the 
European Economic Area and all trade agreemen ts concluded by Switzerland also apply to 
Liechtenstein.  Concerns were expressed about  the potentially discriminatory aspects of such 
economic integration for other WTO Members, and information was s ought about the future bilateral 
agreements between Switzerland and Jap an, and between EFTA and Canada.    
223. Members noted that the tariff structure for Switzerland and Liechtenstein has remained 
unchanged since their last Review in 2004, and enquired about plans to move away from specific to ad valorem  duties;  to reduce tariff peaks;  and e liminate nuisance rates.  Members commended 
Switzerland and Liechtenstein for maintaining ge nerally low tariff protection for non-agricultural 
products, and Switzerland for implementing agricultur al reforms with the intention of eliminating 
export subsidies for "basic agricultural products".  Members observed that the agriculture sector 
remains highly protected and this has contributed to  high domestic prices for agricultural and food 
products.  Concerns were raised about specific measu res, including export subsidies, direct payments, 
the price compensation scheme, and tariff quotas and their complex administration system consisting 
of various procedures, notably the "prise en charge ".  They encouraged Switzerland to consider the 
benefits of a more open agriculture sector for consum ers and food processors, as well as for exporters.   
224. Members commended both countries for not having taken any contingency trade remedies.  
They welcomed the ongoing efforts to increase dome stic competition, and encouraged the countries to 
continue with the reforms.  Other issues of in terest to Members include economic prospects and 
planned reforms in the light of the global econo mic slowdown;  investment regimes (including 
incentive schemes and remaining restricted areas);  ru les of origin for non-reciprocal preferences;  
technical and sanitary/phytosanitary regulations;  intellectual property regime;  and services (telecommunications, tourism, construction,  professional, and financial services). 
225. Members appreciated the comprehensive res ponses provided by the two delegations, and 
looked forward to receiving written answers to a ny subsequent questions that may be submitted 
within one month. 
226. This Review has given Members the opportunity  to gain a much better understanding of the 
policy developments in Switzerland and Liechtens tein since 2004.  The wide interest shown by 
Members is reflected in the depth of the inte rventions and the large number of advance written 
questions.  The importance of further reforms by both  countries, in particular greater liberalization of 
agriculture, have been emphasized.  I should like to  thank the two delegations for their willing and 
cooperative presence in this meeting, and Me mbers for their active participation.    WT/TPR/M/208 
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  227. Once again, I thank Members for their active pa rticipation in the third joint Trade Policy 
Review of Switzerland and Liechtenstein, and the Secret ariat for the excellent report.  I also thank the 
interpreters for their usual efficient good work. 
__________