Statement as delivered by Christopher Wilson,
USTR Deputy Chief of Mission/Chargé d’affaires a.i.
May 16, 2017
Thank you, Chair.
I would like to warmly welcome State Secretary Ineichen-Fleisch of Switzerland, Ambassador Matt of Liechtenstein, and the rest of their delegations for the fifth trade policy review of Switzerland and Liechtenstein. In addition, I would like to thank the two governments and the Secretariat for their work in compiling the helpful reports on trade policy developments in Switzerland and Liechtenstein over the course of the review period. Each of the reports has helped to establish a solid foundation upon which to build our TPR discussions. I would also like to thank Ambassador Walker for serving as Discussant for this review. We are also pleased to include today in our own delegation Toby Wolf of U.S. Embassy Bern, who covers many economic and commercial aspects of our bilateral relationship.
The United States enjoys a close friendship and partnership with Switzerland and Liechtenstein across a range of issues based on shared values and principles. This partnership includes a robust trade and investment relationship. Two-way goods trade between the United States and Switzerland totaled almost $60 billion in 2016, and two-way services trade between the United States and Switzerland totaled more than $52 billion in 2015. The U.S. stock of foreign direct investment in Switzerland was more than $150 billion in 2015. And Swiss FDI in the United States was more than $250 billion in that year. With regard to Liechtenstein, total two-way goods trade between the United States and Liechtenstein was more than $300 million in 2016. The U.S. stock of foreign direct investment in Liechtenstein was $300 million in 2015.
As we have seen in previous reviews, the economies of Switzerland and Liechtenstein are among the world’s most advanced and prosperous, and both are characterized by high living standards and a highly skilled labor force. Their trade regimes are also among the most liberal in the WTO. However, as we have also seen in previous reviews, the agricultural sector remains highly protected from global competition despite its limited contribution to GDP and employment.
Many of the questions we pose today reflect our desire to see Switzerland and Liechtenstein take steps to promote market-oriented support for agriculture. We would note that as a result of various tariff and non-tariff measures, Switzerland enjoys a greater than 3 to 1 trade surplus in agricultural products with the United States.
In particular, the report from the Secretariat states that the allocation of some tariff rate quotas in Switzerland is a “discriminatory system whereby the allocation of the tariff quota is contingent upon local purchase.” This is particularly true for the tariff quota for beef, sheep meat, and offal, where 50 percent of the quota is allocated based on the contribution to Swiss production. This provision is disadvantageous to companies that principally source products through imports.
The lack of competition for agricultural products is further reflected in the approach of Switzerland and Liechtenstein, along with the approaches of their 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, including trade agreements.
Switzerland has also noted “the need to adequately take into account non-trade concerns” in negotiations related to agriculture. We look forward to learning which non-trade concerns Switzerland intends to address in the WTO. Similarly, we look forward to more information on the recent “Swissness” legislation that came into force at the beginning of this year, as mentioned by the Discussant. That new law appears to create new requirements regarding the identification of country of origin for food and industrial products and also appears to impact requirements regarding labeling of foods. We would be interested to know when Switzerland intends to notify the measure to the WTO.
We also have questions about the implementation of the “Precautionary Principle,” and the implications of Switzerland and Liechtenstein harmonizing their SPS and TBT standards with those of the EU. We have posed several questions regarding Switzerland’s scientific and risk basis for food safety measures, including pesticide and veterinary drug standards, food additives, and the moratorium on approvals for the cultivation of biotechnology crops, which was recently extended until 2021. We would appreciate an explanation of the science behind the moratorium.
In addition to our agricultural preoccupations, the United States remains particularly concerned about the ability of copyright owners to protect their copyrighted works in the digital environment. We look forward to updates on the status of draft Swiss legislation expected to address this issue, including the timeline for implementation, as well as mechanisms under current Swiss law that could also provide protection. We also look forward to hearing from Liechtenstein about the status of its proposed copyright law amendments.
We thank both Governments for their efforts to respond to our questions, and we plan to review the responses carefully and request clarifications as necessary during the course of this TPR.
Before closing, I wish to underscore for the record of this TPR the abiding appreciation of the U.S. for Switzerland’s critical but often overlooked role as the WTO’s host, as well as its leadership within the important group of Members known as the Friends of the System. Let me emphasize that the U.S. never takes for granted that Switzerland is indeed among the most faithful friends of this system.
We wish both Governments a successful review and thank the delegations for their attention to our questions.