ࡱ> ,.+q wbjbjt+t+ !$AAe]****8b n*QSSSSSS$B6 wwQ**Q1Q {_**ITrade Policy Review Body 6 December 2000 JOINT TRADE POLICY REVIEW OF SWITZERLAND AND LIECHTENSTEIN 4 and 6 December 2000 Concluding Remarks by the Chairperson We have had a comprehensive, open and informative discussion of the trade policies and practices of Switzerland and Liechtenstein. Members were encouraged by the good performance of the Swiss and Liechtenstein economies since 1997. They attributed this performance largely to sound macroeconomic policies and structural reforms, which have contributed to a better allocation of resources and further exploitation of the comparative advantages of both Switzerland and Liechtenstein. Noting that growth, particularly in its early stages, had been export led, Members pointed to the important role of the multilateral system in keeping markets open to Swiss and Liechtenstein products. They urged Switzerland and Liechtenstein to continue the reforms, mainly in the highly protected sectors (agriculture, and electrical and gas utilities in particular), in order to reduce costs and market rigidities to the benefit of their economies and of the multilateral trading system. Members commended Switzerland and Liechtenstein for their active participation in the multilateral trading system, with several welcoming their support for the launching of a new round of negotiations with a broad agenda; they appreciated the continued role played by Switzerland as the host country for the ϲʹ. Pointing to the increasing participation of Switzerland and Liechtenstein in preferential trade agreements, Members sought assurance that such agreements would be ϲʹ-consistent. The functioning of the Swiss-Liechtenstein customs union, including the Market Control and Surveillance Mechanism (MCSM) established by Liechtenstein following its EEA membership, also attracted interest. Members noted that the tariff consisted exclusively of specific duties, with high-ceiling bindings in agriculture and clothing. They asked about prospects for a simplification of the tariff, including a move to ad valorem rates. Questions were also raised about customs valuation practices, particularly for internal taxation purposes. Most Members posed questions about standards and technical regulations, including labelling, sanitary and phytosanitary requirements, and on the links between environmental protection and international competitiveness of locally-produced goods. The need for greater market access to developing countries and LDCs was stressed. In the area of competition policy, some concern was expressed about the tolerance of dominant positions and about the lack of automatic sanctions against unlawful restraints. On sectoral policies, Members recognized the liberalization initiatives taken by Switzerland and Liechtenstein under the "Agricultural Policy 2002". However, many Members were concerned about the high level of tariff protection and government support (including export subsidies) for agriculture, which they deemed disproportionate to the share of the sector in GDP and employment. They suggested that legitimate non-trade concerns in agriculture be addressed through measures that would not unduly distort production and trade. Members also sought further clarification on a number of issues, including: pursuit of macroeconomic reforms; lack of economic data for Liechtenstein; regulations on foreign direct investment, including residency requirements; tariff quotas on agricultural imports and their administration through non-automatic licensing, including the "Prise en charge" system; non-use of contingency trade remedies; protection of intellectual property, including geographical indications; government procurement, including regulations on threshold values, and on purchases by cantons and municipalities; further structural reforms in the services sector, including professional services; and consultation with "civil society". Members appreciated the comprehensive responses provided by the Swiss and Liechtenstein delegations to most questions raised during the meeting. In conclusion, it is my feeling that this joint Review has allowed us much better understanding of the customs union between Switzerland and Liechtenstein. We have come, Ithink, to a deeper appreciation of Switzerland and Liechtenstein's trade policies and practices, and the environment in which they are framed and conducted. The large number of questions and comments reflected the widespread interest of Members in this regard. Members were encouraged by the ongoing economic performance in both countries. The active participation of Switzerland and Liechtenstein in the ϲʹ seems to me to be central to their trade liberalization efforts. Members encouraged Switzerland and Liechtenstein to maintain the momentum of the reforms, even on an unilateral basis. They urged both countries to ensure that their bilateral and regional arrangements be ϲʹ-consistent. -  PAGE 2 - ~  eghnopqsvw0JmH0J j0JU6CJCJ 56CJ5CJ)*Hf|}~vw6 7  2~-v$ & F$$$)*Hf|}~uvw6 7  2~-vDgheghnopqstuvw -Dghetuvw$$h$$ & F  0. 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