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TWN
Info Service on WTO and Trade Issues (Nov25/14) Trade:
US secures farm access, investment pledge in Swiss trade framework Geneva, 17 Nov (D. Ravi Kanth) -- The United States signed a non-binding bilateral trade framework agreement with Switzerland and Liechtenstein on 14 November. The agreement reduces the reciprocal tariff on Swiss goods entering the American market to 15%, down from a high of 39%. According to details released by the White House, Switzerland secured this tariff reduction after several rounds of negotiations by agreeing to provide considerable market access for American farm products, including beef, and committing to a $200 billion investment in the US in sectors such as pharmaceuticals and manufacturing. The US-Swiss agreement is also being seen by some as a systemic shift away from the rules-based multilateral trading system, despite Switzerland hosting the World Trade Organization in Geneva. People familiar with the development stated that while the US remains a WTO member, it seems determined to continue with its coercive practice of pressuring countries to make large payments in addition to tariffs. In a joint statement issued on 14 November, Switzerland and Liechtenstein confirmed that they "have signed a non-binding memorandum of understanding with the United States. On this basis, the United States will reduce the country-specific additional tariff to 15%." According to Swiss officials, Bern will lower its import duties on a range of American products concurrently with the US. This includes all industrial products, fish and seafood, and agricultural products that Switzerland deems non-sensitive. The Swiss government stated that it will grant the US duty-free bilateral tariff quotas on 500 tons of beef, 1,000 tons of bison meat, and 1,500 tons of poultry meat. As part of the arrangement, Swiss companies plan to make direct investments of $200 billion (CHF159 billion) in the US by the end of 2028. The Swiss government noted that these investments will also include elements that strengthen vocational training. Helene Budliger Artieda, director of the State Secretariat for Economic Affairs (SECO) of Switzerland, indicated that the pharmaceutical sector would contribute a large portion of the $200 billion investment. "Regarding investments, I can't say I'm talking about specifics right now, but it's clear that a large portion is coming from the pharmaceutical sector, or I would say life sciences, because med-tech is also planning certain investments," she told reporters. Swiss economy minister Guy Parmelin sought to reassure the public, stating, "Switzerland has not made any concessions that would limit its ability to act or its neutrality." The agreement has drawn mixed reactions within Switzerland. Lisa Mazzone, leader of the Swiss Green Party, declared that "the Swiss economic elite and the Federal Council are bowing down to Donald Trump" and that Swiss agriculture and consumer interests had been sacrificed. In contrast, Pierre-Andre Page, a farmer and Swiss People's Party parliamentarian, expressed support. He told Swiss public television RTS: "I am not worried about this deal; it is an important contract for Gruyere cheese production. On my farm we produce Gruyere and exports are significant. With the reduction of taxes from 39% to 15%, it is still a tax, but it is already much better." WHITE HOUSE STATEMENT The Trump administration claimed that Switzerland and Liechtenstein "will provide US exporters unprecedented access" and "drive billions of dollars in investment on US soil, creating thousands of jobs across America." It provided the following details: * The Agreement on Reciprocal, Fair, and Balanced Trade will remove barriers to US exports to Switzerland and Liechtenstein, helping to secure US national and economic security. * This trade deal will lock in the largest expansion ever of US exporter access to Swiss markets, creating new opportunities for US manufacturers, farmers, ranchers, fishermen, and other producers. * Under the President's leadership, billions of dollars of investment by major Swiss companies such as Roche, Novartis, ABB, and Stadler have already been announced in connection with the Framework, with more on the way. * Swiss and Liechtenstein companies will invest at least $200 billion into the United States, with at least $67 billion worth of investment occurring in 2026. - These investments will create thousands of well-paying American jobs across all 50 states in a number of sectors, such as pharmaceuticals, machinery, medical devices, aerospace, construction, advanced manufacturing, gold manufacturing, and energy infrastructure. * Switzerland has made commitments to balance its trade with the United States. * As part of President Trump's strategy to establish more balanced trade with Switzerland and Liechtenstein, the trading partners will pay a cumulative reciprocal tariff rate of no higher than 15%, the same treatment given to the European Union. * Switzerland and Liechtenstein intend to remove a range of tariffs across agriculture and industrial sectors, including various fresh and dried nuts, fish and seafood, certain fruits, chemicals, and spirits such as whiskey and rum. In addition, Switzerland will establish tariff rate quotas for American poultry, beef, and bison. * Switzerland and Liechtenstein intend to address a range of non-tariff barriers that, for decades, have prevented US goods from entering their markets. They will work to make trade more seamless by: - addressing restrictive measures on US poultry and streamlining requirements for US dairy products; - opening Swiss and Liechtenstein markets for US medical devices; - streamlining customs processes to make it easier for US goods to enter; - negotiating robust commitments related to intellectual property rights protection and enforcement, including transparent and fair treatment of geographical indications; - working to address forced labor in their supply chains and increasing cooperation on labor-related trade issues; - adopting and maintaining high-levels of environmental protections and discussing commitments related to other environmental measures; - enhancing cooperation on the identification and alignment of international standards to reduce barriers for US exports; and - recognizing US Federal Motor Vehicle Safety Standards. * Switzerland has agreed to refrain from "harmful digital services taxes." * Switzerland and Liechtenstein intend to close loopholes that currently allow non-Government Procurement Agreement (GPA) and Free Trade Agreement (FTA) parties to access their procurement markets, in order to ensure greater reciprocal benefits for US products and services. * Additionally, "the Framework bolsters our shared national and economic security by expanding cooperation on export controls, sanctions, and investment screening." * The United States, Switzerland, and Liechtenstein will work expeditiously to finalize the Agreement on Reciprocal, Fair, and Balanced Trade, with the aim of concluding negotiations in early 2026, in order to lock in these benefits and create a level playing field for American businesses and workers. * "The US goods trade deficit with Switzerland and Liechtenstein was $38.5 billion in 2024, and this deal with Switzerland will put us on a path to eliminate that deficit by 2028." +
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