WTO questions Swiss tariff quotas

Switzerland has lately failed to comply with most World Trade Organization (WTO)-approved tariff quotas, the Geneva-based organisation declared in its regular review of Swiss trade policies.

“Most WTO tariff quotas have been over-filled in recent years,” the organisation said in its fifth review of Switzerland’s trade policies, published on Tuesday.

The WTO report, which takes place every four years, said Switzerland had a “generally open” trade regime, and it praised the alpine nation for its ongoing support for trade liberalisation and a rules-based multilateral order.

The agriculture sector, however, “continues to be protected with high import tariffs on sensitive products”. Ongoing subsidies in this field also show how vulnerable it is to market competition, “highlighting the need for more market-oriented reforms.”

Stockpiling products

The trade body said the average Swiss tariff on imports in 2016 was 9%, compared to 9.2% in 2012. Tariffs on agricultural products were higher, averaging 30.8% in 2016, while the average for non-agricultural products was 2.3%. Rates above 100% apply to some vegetables, meat, and dairy products.

The report said that last year Switzerland imported more agricultural products than planned, which meant that importers had to pay higher duties for surplus quantities.

It noted that Switzerland also traditionally builds up reserve stocks of certain foodstuffs, fuels, animal feed, fuel and medicinal products in the event of shortages. Excessive customs levies, which “may exceed Switzerland’s bound commitments”, are currently imposed on imports of these products to finance the reserves.

The Swiss State Secretariat for the Economic Affairs (SECO) said on Tuesday that it would work towards meeting its obligations as a WTO member by 2019 at the latest. The Agricultural Policy 2014-2017 is aimed at improving the efficiency of direct subsidies in the sector, and more will be eliminated by 2019.

Tariffs on 201 communications technology products will also be lifted by the end of June.

WTO member states have also raised questions surrounding the removal of the Swiss franc-euro peg in January 2015, Swiss progress on the automatic exchange of tax information, as well as export support and tax reforms.