The cabinet has decided to end subsidies for farm exports to the least developed countries, in keeping with a World Trade Organization (WTO) agreement last year to end direct export subsidies on farm produce.
At its meeting on Friday, the cabinet approved an amendment to the ordinance on Swiss export contributions. International trade law considers such contributions – part of Switzerland’s so-called Chocolate Act governing import and export of processed agricultural products – to be export subsidies.
The change, meant to help farmers in poor countries compete more fairly, takes effect on April 1.
Ministers at a WTO conference in Nairobi last December agreed to a ban on subsidising exports to the least developed countries, where they can harm local agriculture markets.
Developed countries agreed to stop the subsidies immediately while developing nations agreed to follow suit by the end of 2018. Agriculture subsidies in rich nations had been a major obstacle in trade negotiations for more than a decade.
The 162-nation WTO had called it the most significant result pertaining to agriculture since the organisation began in 1995.
“The amendment of the ordinance is to reduce the adverse effects that the export contributions from Switzerland have on this group of countries,” the cabinet said in a statement.
Only 0.5% of Swiss products eligible for export contributions have been exported to least developed countries over the past three years, according to Federal Customs Administration estimates.