We welcome the delegations from Bern and Vaduz for the WTO Trade Policy Review of Switzerland and Liechtenstein. We look forward to hearing more about the efforts that Switzerland is making toward liberalization, its plans for further reform, and receiving responses to the written questions that we have submitted. We are pleased to participate in Liechtenstein's first trade policy review. The Secretariat and the Governments of Switzerland and Liechtenstein deserve to be commended for their informative reports.

With international trade playing such an important part in Switzerland's economy and as well as being the host country for the WTO, Switzerland plays an important role in furthering trade liberalization and strengthening the WTO. Switzerland's support for the multilateral trading system has been helpful in efforts to further open world markets for goods and services in many areas.

The United States and Switzerland maintain close ties, both culturally and economically. The U.S. is the largest investor in Switzerland ($37 billion as of 1998) and is the 2nd largest purchaser of Swiss goods. Total merchandise trade between the two countries grew to $18 billion in 1999. American tourists are the second largest group to visit Switzerland annually.

We are pleased to see Switzerland's economic reform process show signs of success. A clear example of this is the liberalization of the telecommunications sector. During the negotiations on the Basic Telecommunications Agreement, Switzerland took advantage of the opportunity to improve its commitments, which have led to new investment and a reduction in prices in this sector. Switzerland has made similar progress in government procurement by transposing the Government Procurement Agreement into federal legislation and practice. While Switzerland can be pleased with the results of its reform efforts to date, several areas, in particular agriculture, need greater attention.

We have provided written questions regarding some of these subjects. However, I would like to make a few overall comments.

The report highlights the problem of Switzerland's agricultural sector. It ranks top among OECD countries in government supports for agriculture. In 1999, Switzerland provided aid to farmers equivalent to 73 percent of gross receipts from agricultural products, well above the average of 40 percent for OECD countries. With high average tariff rates on agriculture imports, the simple average ad valorem equivalent of MFN tariffs on agricultural imports is about 34 percent, with a maximum tariff of 678 percent. Thus, Switzerland's agricultural sector remains highly insulated from foreign competition.

We understand Switzerland is taking steps to try to reform its agricultural sector. The WTO Agreement on Agriculture helped establish the necessary conditions for long-term agricultural reform, but it is important to build upon the foundation by accelerating the process of reducing trade distortions. The WTO negotiations on agriculture under the built-in agenda offer an opportunity to lower tariffs and bind them and substantially reduce trade-distorting domestic supports. We strongly urge Switzerland to reform its agricultural sector and to support proposals in the agricultural talks to reduce substantially or eliminate disparities in tariff levels among countries and reduce substantially the disproportionate levels of support Members use.

Furthermore, administration of agricultural tariff-rate quotas has led to numerous lines where the quota is not filled.

The report notes the importance of services to the Swiss economy, accounting for two-thirds of GDP and three-fourths of employment. The services regime is fairly liberal, and state intervention in the services sector has been reduced substantially. However, competition remains limited in certain branches, where public or private companies still hold monopolies or exercise exclusive rights, such as in salt, passenger transport by bus, ports and certain types of insurance. The General Agreement on Trade in Services provides a framework for addressing barriers to services. The WTO built-in agenda talks on services offer an opportunity to liberalize a broad range of service sectors. We strongly urge Switzerland to support proposals in the services talks to reduce current restrictions.

We have provided Switzerland with a list of comments and questions on its trade policy regime and are eager to discuss the Government of Switzerland's responses to our inquiries Wednesday