WORLD TRADE  
ORGANIZATION  WT/REG273/M/1 
29 March 2011  
 
(11-1529) 
Committee on Regional Trade Agreements 
Sixtieth Session  
 
 
 
CONSIDERATION OF THE ECONOMIC PARTNERSHIP AGREEMENT  
BETWEEN JAPAN AND SWITZERLAND,  
GOODS AND SERVICES 
 
Note on the Meeting of 14 March 2011  
 
Chairman:  Mr. A. Suescum (Panama) 
 
 
1. The 60th Session of the Committee on Regional Tr ade Agreements (hereinafter CRTA or the 
Committee) was convened in Airgram WT O/AIR/3692, dated 31 January 2011.  
2. Under Agenda Item B.II of this session, the CRTA considered the Economic Partnership 
Agreement between Japan and Switzerland (herei nafter the 'Agreement'), goods and services. 
3. The Chairman  said that the Agreement had entered into force on 1 September 2009 and had 
been notified by the Parties on 1 September 2009 to the WTO under Article XXIV:7(a) of the 
GATT 1994 and the Understanding on the Interpre tation of Article XXIV of GATT 1994 as an 
Agreement establishing a free trade area (doc ument WT/REG273/N/1) and under GATS Article 
V:7(a) as an Agreement providing for the liberaliz ation of trade in services  within the meaning of 
Article V of the GATS (document S/C/N/512).  The te xt of the Agreement was available, together 
with its Annexes, on the Parties' official websit es.  The Factual Presentation on the goods and services 
aspects (document WT/REG273/1 dated 6 January 2011) had been prepared by the Secretariat on its 
own responsibility in full consultation with the Part ies, in accordance with paragraph 7(b) of the 
Transparency Mechanism (TM) for Regional Trade Agreements (document WT/L/671).  
Additionally, he informed Members that written qu estions and replies on this Agreement had been 
distributed in document WT/REG273/2/Rev.1, date d 8 March 2011.  He suggested to organize the 
consideration of the Agreement by first asking the Parties and then other Members for general 
comments.  The Committee would then turn to th e specifics of the Agreement using the Factual 
Presentation to guide the debate.  He proposed to go through the Factual Presentation section by 
section, and then look at the questions and replies document.  
4. The representative of Switzerland  thanked the Secretariat for it s support during this process 
and for its excellent work in preparing the Fact ual Presentation which provided a comprehensive and 
informative overview of the Agreement.  He also  thanked the Japanese delegation for its excellent 
collaboration in preparing for this examination.  He  started with a few introductory remarks.  He said 
that Switzerland's economic structure was character ized by its pronounced outward orientation and 
that its prosperity depended, to a large extent, on international trade in goods and services as well as 
on cross-border investment activities.  Consequent ly, the constant improvement of access to foreign 
markets represented a core objective of Swiss foreign economic policy.  He adde d that the best way to 
achieve this objective was the multilateral approach w ithin the framework of th e WTO.  At the same 
time, Switzerland considered bilateral or plurilatera l, regional or supra-regional free trade agreements 
(FTAs) as complementary instruments to accelerate the liberalization of trade on an international 
scale. He observed that they were also an importa nt instrument in maintaining and strengthening WT/REG273/M/1 
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  Switzerland's competitiveness as a business location but that they could never replace the multilateral 
trading system. 
5. Following these remarks, he informed Member s that the Agreement was economically the 
most important FTA signed by Switzerland since the 1972 FTA between Switzerland and the 
European Community (EC).  The Agreement thus represented a major addition to Switzerland’s free 
trade network.  When initiated in 2007, it was th e first time a European country had embarked on 
negotiating a comprehensive free trad e and economic partnership with Jap an.  The relentless efforts of 
both sides to bring their joint endeavour to a fru itful closure had been rewarded on 1 September 2009 
when the Agreement had come into force.  The la tter stood in the tradition of almost 150 years of 
treaty-based trading between the Parties.  Comple mentary to WTO multilateral rules, he was of the 
opinion that this Agreement would provide the b asis for a closer bilateral relationship between 
advanced economies. Trade relations between Sw itzerland and Japan were close and important.  
Although imports from Japan to Switzerland had decreased by 13.7% in 2009 during the world 
economic crisis according to the Swiss Federal Cust oms Authority (FCA), Swiss exports to Japan had 
grown some 1.3% due to extraordinary factors lik e the 2009 influenza pandemic.  The following year 
imports from Japan had increased about 0.1% to CH F3.6 billion, while Swiss exports to Japan had 
fallen by 5.9% to CHF6.72 billion according to provisi onal data by the FCA.  With regard to traded 
products, he informed Members that over the last y ears, the categories of the most traded goods had 
changed little. The most important Swiss exports  to Japan were chemi cal and pharmaceutical 
products, watches and machines.  On the other ha nd, Japan's main exports to Switzerland were 
vehicles, precious metals and jewellery, machinery and chemicals.   
6. He then turned to the Agre ement's characteristics and provided a few comments on the 
liberalisation and rules foreseen in it.  The Agreement established a comprehensive economic 
partnership between Switzerland and Japan.  It co ntained substantive provisions on trade in goods, 
trade in services, the movement of natural pe rsons for business purposes, the establishment and 
protection of investments, the protection of inte llectual property, the promotion and facilitation of 
electronic commerce, provisions in the field of competition and the promotion of a closer economic 
relationship.  Regarding the establishment of a free trade area for industrial goods and other 
provisions on trade in goods, Switzerland had elimin ated almost all tariffs on industrial goods as of 
the Agreement's entry into force.  As for agri cultural goods, Switzerland and Japan would grant each 
other tariff concessions on a selected range of basi c and processed agricultural products.  A general 
review of the Agreement's provisions on trade in  goods would take place in 2014. With regard to 
customs procedures, the Agreement foresaw the u se of an "Approved Exporter" scheme with the 
objective of speeding up customs procedures and preventing delays at the border. Swiss companies were granted this status under the condition that th ey fulfilled its requirements.  As for services, the 
Agreement contained specific provisions that went beyond the GATS such as financial and telecommunication services, disciplines on domestic  regulation in services, and the recognition of 
qualifications of service suppliers.  It used a "negat ive list" approach, which implied that instead of 
positively listing market access, national treatment and most-favoured-nation (MFN) treatment commitments, only the exceptions to these principles were  listed in the Agreement.  Such an approach 
provided a higher level of transparency.  It also  included specific provisions on transparency and 
procedures regarding the entry a nd temporary stay of natural pe rsons for business purposes.  The 
Parties had contracted specific commitments on the en try and temporary stay of certain categories of 
natural persons (mainly service providers) of the other Party.  In the field of investment, the 
Agreement foresaw provisions concerning the estab lishment of Swiss and Japanese investments based 
on the principles of national and MFN treatment.  In  addition, the chapter on investments contained 
provisions on the protection of established investment s, as a complement to the bilateral Agreement 
on Investment Protection.  The Agreement also included provisions on the protection of intellectual 
property rights, which strengthened the protection of copyrights, tr ademarks, designs, patents, new 
plant varieties, geographical indications, test data , and addressed issues related to unfair competition.  
He mentioned that the Agreement with Japan was Switzerland’s first FTA including specific  WT/REG273/M/1 
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  provisions to promote and facilitate electronic co mmerce (“e-commerce”).  The relevant provisions 
covered trade in electronic products and services, digital signatures and the protection of online 
consumers.  The Agreement also contained pr ovisions designed to prevent anti-competitive 
behaviour.  In the field of government procurement,  since Japan and Switzerland were both Parties to 
the WTO Agreement on Government Procurement (G PA), the Agreement only confirmed the rights 
and obligations of the Parties under the GPA, and designated a contact point for information about 
government procurement in each country.  Finally , he informed Members that a Joint Committee 
overseeing the implementation and further developm ent of the Agreement had been established and 
that the second meeting of the Joint Committee had taken place on 10 February 2011 in Tokyo.  In addition, the Agreement had established a ve ry innovative and unique instrument:  the Sub-
Committee on the Promotion of a Closer Economic Re lationship.  The objective of this instrument 
was to offer the possibility to business companies to address specific company problems in bilateral 
trade and investment in an innovative and direct wa y.  For this purpose, the Agreement foresaw direct 
channels of communication between government agencies and business sector representatives.  
Concretely, this new instrument would serve as a platform for direct discussions between business 
representatives and competent government authorities from both sides.  He concluded by thanking 
Members for their interest and questions.  He said they had answered questions they had received and 
looked forward to a fruitful discussion during this session. 
7. The representative of Japan
 expressed his appreciation for the opportunity to present this 
Agreement.  He started by saying that the multilateral trading system was at the centre of Japan's trade 
policy and that FTAs aimed to supplement and prom ote trade liberalization and not to replace the 
WTO.  He remarked that this Agreement was Japan 's first Agreement with a European and developed 
economy, and thus had a strategic meaning.  Sw itzerland and Japan shared many values as well as 
initiatives in trade and economic areas, and were in constant cooperation with each other (e.g. G10 in 
WTO).  This Agreement would enhance further th e existing good trade relationship between the two 
countries.  It covered not only goods and investment  liberalization but also many other areas such as 
intellectual property rights, competition policy, and contained new elements such as e-commerce 
which would provide the basis for future negotiati ons.  The Agreement also introduced a different 
rules of origin certification system. In addition to the third party certification system that Japan had, the Agreement established a new system based on th e origin declaration by "Approved Exporters".   
As for the consistency of this Agreement with Article XXIV of GATT 1994 and Article V of GATS, 
the Agreement provided for the elimination of tari ffs on more than 99% of trade volume within ten 
years. Most of the elimination had taken place immedi ately after the Agreement's entry into force.  He 
therefore considered that the Agreement was consis tent with GATT Article XXIV.  In the area of 
services, the Agreement included a wide range of liberalization measures and used a negative listing 
approach, which in his opinion was also consistent with GATS Article V.  Finally, he said that the 
Agreement was possible because it was between deve loped economies.  He a dded that it would be a 
landmark for future FTAs as it included many high standard elements such as intellectual property 
rights, investments, rules of origin, movement of natural persons and e-commerce provisions.  To conclude, his delegation believed th is Agreement had established a very  good basis for the bilateral 
economic relationship in the years to come and w ould contribute to the multilateral trading system 
and liberalization in the WTO. 
8. The representative of the United States
 thanked Japan, Switzerland and the Secretariat for the 
information provided on this Agreement.  He remark ed that according to the Factual Presentation, by 
the end of the Agreement's implementation, 88.8%  of Japan’s tariffs would become duty-free, 
covering 99.5% of imports from Switzerland.  In term s of tariff lines by sectors, 62% of agricultural 
tariff lines and 95.2% of industrial tariff lines would be duty-free.  In the case of Switzerland, duties 
on 83.2% of all tariff lines would be eliminated cove ring 99.75% of imports from Japan.  However, in 
terms of tariff lines, only 32.3% of agricultural ta riff lines were duty-free, compared to 99.9% in the 
case of industrial tariffs.  His delegation was ther efore disappointed by Japan's and Switzerland's 
liberalization as it was disproportionate between industr ial and agricultural sectors.  He remarked that WT/REG273/M/1 
Page 4  
 
  the selective coverage of agricultura l goods had adverse effects on the trade of other Members.  The 
continued, systematic protection of these Parties' agricultural sectors through FTAs made multilateral 
liberalization more difficult. 
9. The representative of the European Union
 thanked both Parties for the comprehensive 
presentation of the Agreement and for responding in writing to the questions her delegation had asked 
prior to this meeting.  She rema rked that the Agreement was not su fficiently balanced in terms of 
sectoral coverage.  She encouraged the Parties to make further commitments in those areas which had 
not been liberalized and to take advantage of  the general review clause for trade in goods. 
10. The representative of Australia  also expressed his concern about the lack of balance in the 
coverage of the Agreement.  While there was a hi gh level of liberalization in terms of industrial 
goods, the coverage in terms of agricultural goods was significantly lower.  This was worrying in 
terms of the objective of the Agreement which was to  liberalize trade in a comprehensive way.  He 
highlighted that the rules stated that it was important not to neglect any important sectors. 
11. The representative of Switzerland  replied that a number of dele gations considered that a FTA 
covering more than 99% of the trade among the parti es was unbalanced.  He said  he would retain this 
criterion for further discussions. 
12. The representative of the United States  also asked a few follow-up questions. Given that the 
Factual Presentation indicated that there might be  an overlap between the commitments under Chapter 
6 (trade in services) and Chapter 9 (investment) of the Agreement, he asked the Parties if they could 
explain the extent of this overlap.  More specifi cally, he asked whether the Parties intended for the 
scope of the obligations in Artic les 46.2(f) and 47 to be broader th an, narrower than, or perfectly 
coterminous with the obligations in Article 87.  He also asked Japan to confirm that local 
governments in Japan might have measures in place th at did not conform to the TRIMs Agreement.  
Article 96 of the Agreement incorporated the TR IMS Agreement into the Agreement and under the 
latter, Japan had reserved for its local governments the right to maintain, continue, or renew measures 
that therefore did not conform to the TRIMs Agr eement. He also remarked that the Parties had 
indicated that for practical reasons, they had limited the scope of their domestic regulations 
obligations only to those sectors in which they had undertaken GATS commitments.  His delegation 
was interested in the specific practical obstacl es that had prevented Parties from ensuring that 
regulatory measures were administered in a reasona ble, objective and impartial manner.  Finally, he 
added that Annex III (List of reservations) permitte d the adoption or maintenance of any measure 
relating to services supply and he asked how these reserv ations were not in conflict with the principle 
of technological neutrality.  
13. Regarding the question on e-commerce and the principle of technological neutrality, the 
representative of Switzerland  replied that Article 74 of the Agreement covered measures governing 
electronic commerce (i.e. electronic selling of a service) and implied that the e-commerce legislation should not be tougher than the current applicable legislation on the commerce of services.  The 
reservation regarding new services dealt with the ser vice itself and with the supply of the service, as 
defined by the Agreement which was the same defi nition as in the GATS.  He added that although 
there was a difference between the supply of a ser vice and engaging in e-commerce, the reservation 
dealt with the service itself.  According to the Sw iss reservation in the Agreement, a new service was 
a service not currently delivered in Switzerland.  Th is was the same definition contained in the GATS 
Financial Services Understanding which also include d the manner in which a service was supplied. 
Yet, he highlighted that the definition of a ne w service focused on the fact of the delivery or non-
delivery of a service in Switzerland at a given point in time.  As for the question concerning the link 
between services and investments, another representative of Switzerland said that for his country the scope of obligations in Articles 46.2(f) and 47 was intended to be coterminous  with obligations in 
Article 87 as far as those obligations applied to mode three concerning the supply of services.  WT/REG273/M/1 
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  14. The representative of Japan  replied that he would send written responses at a later stage, as 
some of the questions could not be answered i mmediately.  Nevertheless, concerning the overlap 
between the services and investment chapters, he sai d that historically chapters on investments had 
better and stronger provisions than the chapter on serv ices.  For this Agreement, Japan wanted to be 
sure that the same type of provisions contained in  the chapter on investments applied also to mode 
three in services, which could explain an overlap.  In the case of any inconsistency between the two 
chapters, the commitments under the chapter on ser vices would prevail over those under the chapter 
on investment.  He added that there were some rese rvations in the services area that did not exist in 
the case of investments and that in that case the reservations on services would also be applied to 
investments.  He believed that there were no serious  problems of inconsistency.  With regard to local 
government measures and their conformity with  the TRIMS agreement, he said that local 
governments at the provincial/prefectural level were , like in other Member countries, covered by the 
Agreement.  Japan therefore did not maintain any measure inconsistent with the TRIMS agreement.  
He added that local governments had other sub-divisi ons like cities, towns, and villages and that he 
would refer to his colleagues in Tokyo for furthe r details on the measures at these levels.  For the 
remaining questions he would reply in writing. 
15. The Chairman  said that the consideration of the goods and services aspects of the Economic 
Partnership Agreement between Japan and Swit zerland had allowed the Committee to clarify a 
number of questions and oral discussion of the Ag reement could be concluded in accordance with 
paragraph 11 of the Transparency Mechanism.  If any delegations wished to ask follow-up questions 
they were invited to forward submissions in writing to the Secretariat by 22 March 2011  and the 
Parties were asked to submit replies  in writing by no later than 5 April 2011.  In accordance with 
paragraph 13 of the Transparency Mechanism all written submissions, as well as minutes of this 
meeting would be circulated promptly, in all WTO official languages, and would be made available 
on the WTO website. 
16. The Committee took note  of the comments made. 
__________