In 1995, the United States trade deficit with Switzerland was $1.4 billion,
an increase of $593 million from that recorded in 1994. U.S. merchandise exports
to Switzerland during 1995 increased 11.2 percent to $6.2 billion. Switzerland
was the United States' nineteenth largest export market in 1995. U.S. imports
from Switzerland were $7.6 billion, a 19 percent increase over 1994.
The stock of U.S. foreign direct investment in Switzerland was $34.5 billion
in 1994, a 5.2 increase over that in 1993. U.S. direct investment in Switzerland
is largely concentrated in finance, wholesale and manufaccturing..
After the rejection of the European Economic Area (EEA) Treaty by the Swiss
electorate at the end of 1992, the Swiss government has sought to reduce
potential discrimination against Swiss products by EU countries through
bilateral sectoral negotiations with the European Union. These negotiations are
continuing in 1996, and it is not clear that agreement will be reached. The EU
insists upon a package agreement involving all seven negotiating groups.
Switzerland is known to have serious objections to EU proposals in at least two
of the groups. Any eventual deal with the EU is likely to cause collateral
damage to U.S. interests in some of the areas under negotiation. This phenomenon
has already been seen in cases where Switzerland adopts EU standards and
According to the OECD, Swiss farmers are one of the most highly protected
producer groups in the World. Switzerland is self-sufficient in pork, dairy and
other agricultural commodities, but imports approximately $6 billion in food
annually, accounting for 40 percent of total food consumption. The U.S. share of
the agricultural import market in Switzerland continues to be frozen at less
than five percent. This extremely low share contrasts sharply with U.S.
agricultural export performance in similar markets worldwide. Switzerland enjoys
significant access to the U.S. food market, exporting approximately $158 million
annually to the United States, the majority of which are high-value, processed
A serious obstacle to U.S. exporters has been restrictive government import
policies. While Switzerland has begun liberalizing some markets in response to
the GATT Uruguay Round results on agriculture and domestic budget pressures, the
full benefits of these reforms have not yet been realized. Difficulties have
been encountered in implementing a new import licensing system for wine, and it
is unclear at this pointwhether the methods of implementation chosen for certain
other products are fully in conformity with Switzerland's WTO obligations.
Currently, the main constraint blocking U.S. food products from Switzerland's
lucrative import market is the very limited competition in the retail sectors.
Two retail "giants" control over two-thirds of chain store sales. Although there
are a few exceptions, U.S. exporters are denied access to Swiss consumers
because both retail giants manufacture their own consumer-ready products and are
reluctant to market products which compete with in-house brands. U.S. exporters
are also disadvantaged by the long-standing business ties
Swiss retailers have with European suppliers. Further, U.S. exporters pay
tariffs on processed products while some European exports may enter the Swiss
market at preferential rates or tariff-free.
As a result of restrictive government policies and the lack of effective
competition, the U.S. has a weak presence in the Swiss food import market,
especially the high-value, consumer ready food market. Initiatives begun two
years ago to work jointly with the two Swiss retail giants to identify and
reduce constraints facing U.S. exporters have produced some positive results
with one of the retailers.
STANDARDS, TESTING, AND CERTIFICATION
Swiss technical standards and testing requirements for such key products as
automobiles have long been an expensive and difficult hurdle for foreign
suppliers. By adopting EU automobile standards in 1995, cars made in the EU can
now enter the Swiss market without additional testing. This development puts
U.S. manufacturers at a significant competitive disadvantage. Discussions with
the Swiss Government on this problem have been positive, and the Government of
Switzerland has now agreed that U.S.-made cars imported directly by individuals
can be registered with only minimal modification and testing. However, the
United States is still seeking complete parity with the favorable access now
enjoyed by EU models and encouraging the Swiss Government to recognize U.S. auto
standards and test results.
In 1995 the U.S. also encountered problems over Swiss standards for imported
pet food. U.S. sales of pet food in the growing Swiss import market doubled in
1994, but in July 1995 U.S. pet food exports were jeopardized when Switzerland
began enforcing a new, but not yet implemented, directive on pet food. An
interim agreement permitting resumed shipments was reached after months of
negotiation, but the problem remains outstanding.
There is a very high degree of cartellization in the Swiss economy, because
the existing Swiss law toleratescartels which are not deemed to be "harmful to
society." The new cartel law coming in force at the beginning of July 1996 will
still allow cartels, but it requires the companies in the cartel to justify such
action under restrictive economic requirements. The existence of the cartels
disadvantages U.S. exports to Switzerland. As noted above, the Swiss food
industry, for example, is controlled by cartels of producers, wholesalers,
processors and retailers. These organizations have succeeded in maintaining
non–tariff barriers, such as an import calendar, which is designed to favor
INTELLECTUAL PROPERTY PROTECTION
Switzerland has one of the strongest regimes in the world for the protection
of intellectual property rights and has shown a willingness to enforce its laws
effectively. A new copyright law entered into force in 1993, providing for
stiffer penalties for the illegal copying and distribution of video cassettes.
While some illegal importation and copying may still occur, video piracy appears
to have been driven entirely underground and does not have a significant market
impact. Software piracy has been a problem, but a large and well–publicized
corporate raid in 1993 appears to have made a significant dent in corporate
copying. An industry group estimated that U.S. software exports to Switzerland
had increased at least 50% between the first half of 1993 and the first half of
1994. However, while Swiss copyright law provides for a cable retransmission
right, claims by foreign producers can only be made through a local collection
society. Moreover, theft of pay-TV, premium channels, and other satellite
signals using decoding devices has become a widespread problem. The government
has shown some interest in legislating to solve this problem, but no specific
proposals have yet emerged.
There are widespread cantonal insurance restrictions that deny foreign
companies the ability to underwrite direct insurance in key areas. U.S. airlines
are also prohibited from providing ground handling services to third-country
airlines at Swiss airports, and U.S. government efforts to eliminate this
barrier have been unsuccessful.
Telecommunications and information services are dominated by the Swiss Post
Telephone and Telegram Administration's statutory monopoly over most of the
telecommunications market. The government is consulting on a legislative
proposal, adapted from current European Community initiatives, to end the
monopoly and to rely more on private investment and competition. However, its
offer in the ongoing WTO telecommunications services negotiations fails to
reflect these plans or commit to an eventual opening of the market, and does not
contribute to the need for high quality commitments to achieve an agreement.