Statement delivered by Ambassador Michael Punke
U.S. Permanent Representative to the WTO
April 23, 2013
Thank you, Chair. The United States is pleased to participate in the fourth trade policy review of Switzerland and Liechtenstein. We extend a warm welcome to Ambassador Didier Chambovey of Switzerland, Ambassador Norbert Frick of Liechtenstein, and the rest of their delegations. We appreciate the reports prepared for this meeting. I would also like to thank Ambassador Mariam Salleh (Malaysia) for her role as discussant for today’s meeting.
The United States enjoys a long tradition of friendly relations with Switzerland and Liechtenstein. Our countries have an active history of cooperation and we each appreciate the powerful role that international trade can play in global economic and political stability. The U.S. economic relationship with Switzerland and Liechtenstein is positive and growing across several dimensions. Two-way goods trade between the United States and Switzerland totaled $51.9 billion in 2012, and two-way services trade between the United States and Switzerland totaled $43 billion in 2011. The U.S. stock of foreign direct investment in Switzerland was $125.0 billion in 2011, led by the nonbank holding companies, manufacturing, and wholesale trade sectors. Swiss FDI in the United States was $211.7 billion in 2011, led by the manufacturing and finance sectors. With regards to Liechtenstein, total two-way goods trade between the United States and Liechtenstein was $332 million in 2012. The U.S. stock of foreign direct investment in Liechtenstein was $285 million in 2012. Liechtenstein FDI in the United States was $556 million in 2012.
As we have seen in previous reviews, the economies of Switzerland and Liechtenstein are among the world’s most advanced and prosperous, both of which are characterized by high living standards and a highly skilled labor force. Their economies have recovered well from the global economic crisis, and unemployment has been kept in check at about three to four percent. The major economic challenge for the two economies has been how to mitigate economic distortions that result from the strong pressures for appreciation of the Swiss franc.
Trade continues to be an important driving force of both economies, with the value of trade in goods and services equivalent to more than 100 percent of GDP. The two countries together are home to some of the world’s most specialized enterprises, including electronics, metal manufacturing, pharmaceuticals, food products, precision instruments, optical instruments, and dental products. The services sector is the main employer and makes a significant contribution to GDP in both economies. Both are net exporters of services, and financial services represent an important branch of the sector.
The trade regimes of Switzerland and Liechtenstein are among the most liberal in the WTO, with the exception of the agriculture sector. Despite its marginal contribution to GDP and employment, agriculture remains highly protected from global competition by various tariff and non-tariff measures. And as the Secretariat report notes, this level of protection in agriculture has remained largely unchanged since the last TPR.
Several specific agricultural policies are particularly of concern to the United States. The Secretariat’s report notes that, Switzerland does not apply administered prices for price support measures, but rather uses “observed” prices to calculate the support. Also, market support measures have been reduced by less than 50 percent since 2009. We would appreciate further explanation from Switzerland regarding how its system of “observed prices” differs from “administered prices.” We would also appreciate further explanation on how these prices are reflected in Switzerland’s domestic support notifications.
The United States understands that the Swiss government does not appear to have taken into account the results of a comprehensive and definitive review of the benefits and risks of genetically modified plants completed by the Swiss National Research Program in 2012. Rather, both chambers of Parliament recently adopted a second extension of the moratorium on approvals for cultivation of biotechnology crops until the end of 2017. We therefore look forward to hearing Switzerland’s views on this scientific research including why a ban was imposed on something that Swiss research determined to be safe.
The lack of competition for agriculture products is further reflected in Switzerland’s and Liechtenstein’s approach, along with its EFTA partners, to the negotiation of free trade agreements, which eliminate tariffs on markedly fewer agricultural tariff lines than non-agricultural tariff lines. We continue to encourage Switzerland and Liechtenstein to increase the market orientation of their agricultural production and trade policies.
In addition to our agricultural concerns, the United States is particularly concerned about subsequent interpretations of a 2010 Swiss Federal Supreme Court decision that have seriously undermined the ability of companies and individuals to enforce their intellectual property rights against infringement over the Internet. We look forward to hearing about steps that the Swiss government is taking to address this concern and to combat copyright piracy over the Internet generally. The United States will be closely monitoring the results of the current “Copyright Working Group 2012,” or AGUR12, as well as the Swiss Ministry of Economy-led process.
The United States also looks forward to hearing about the steps that both Switzerland and Liechtenstein are taking to address issues caused by their dominant or government-owned telecommunications service providers.
Finally, we note that the Government of Switzerland indicated that it is in the process of revising its long standing legislation on alcohol, and we look forward to hearing Switzerland’s views on how the revised legislation may affect imported products.
The United States, Switzerland, and Liechtenstein share a common fundamental desire to ensure the health and vitality of an open global trading system, which we view as critical to promoting economic growth and development for all Members. We share Switzerland and Liechtenstein’s view that a strong, rules-based system is the best guarantee against protectionism, and provides important transparency and predictability for traders around the world. We wish both Governments a successful review, and we look forward to further discussions.