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Leuthard pushes for stronger trade with US

Economics Minister Doris Leuthard will discuss Swiss-US trade in Washington

(Keystone)

Economics Minister Doris Leuthard has begun a two-day visit to Washington, where she will meet the United States trade representative Susan Schwab.

The discussions will mainly concern the stalled Doha Round of trade liberalisation talks and the US-Swiss Trade and Investment Cooperation Forum.

Meetings with Secretary of Agriculture Mike Johanns as well as with the Department of Commerce, the business community and several members of Congress are also on the agenda.

The visit comes at an important time, when efforts are being made to relaunch the Doha negotiations and Switzerland and the US are extending their collaboration through the Trade and Investment Cooperation Forum.

The US is Switzerland's second-largest export market, worth $16 billion (SFr19 billion) or roughly 12 per cent in 2006. It is also the main destination for Swiss direct investments abroad, totalling $71 billion.

Leuthard, a member of the centre-right Christian Democratic Party, will be picking up the baton passed to her in June by previous economics minister and party colleague Joseph Deiss, who unexpectedly resigned earlier in the year.

She has her work cut out. So far negotiations on a wide-ranging free-trade accord with the US have never got past the agree-to-disagree stage. Agriculture is always the main stumbling block.

Switzerland would like differentiated treatment for certain agricultural products. Washington on the other hand prefers the option of a global agreement covering all sectors.

Forum

Before Deiss stood down, however, he signed an agreement with the former US trade representative Rob Portman aimed at strengthening trade and investment between Switzerland and United States.

Deiss said the Trade and Investment Cooperation Forum was important to maintain the smooth flow of goods, services and investment between the two countries.

The proposal for the joint forum to boost economic relations was launched in January at the annual meeting of the World Economic Forum in the Swiss mountain resort of Davos.

The announcement came only days after the two sides failed to agree on the terms for negotiations on a free-trade accord amid differences over trade in agricultural products.

Washington insisted on a fully fledged deal, while the Swiss government wanted to exclude agriculture in a bid to protect the Swiss farming sector.

Doha

The Doha Round of world trade talks collapsed in July after the breakdown of negotiations in Geneva between the six leading members of the World Trade Organization.

The negotiations aims to lower trade barriers around the world, permitting free trade between countries of varying prosperity.

Analysts said the last-ditch talks between the European Union, the United States, Japan, Brazil, Australia and India failed due to the intransigence of Washington and Brussels to give ground on agriculture.

Switzerland, which has a strong farmers lobby, has always rejected WTO calls to lower farm subsidies and import tariffs on agricultural products, but has pushed for liberalisation of services and lower tariffs for industry.

swissinfo with agencies

In brief

From the Swiss perspective:

Swiss exports grew 14% last year to the record level of SFr16.1 billion.
The US is the second largest export market (10.7%) behind Germany (20%) but ahead of France (8.5%), Italy (8.2% and Britain (5.1%).
Foreign direct investments (FDI) of Swiss companies in the US remain high with about 34% of all FDI, compared with 5.4% to Germany.

From the US perspective:

Exports of US goods to Switzerland increased more than 16% to $10.7 billion (making Switzerland the 17th largest export market).
US exports to Switzerland are four times those of US exports to Austria and larger than US exports to Saudi Arabia and Russia combined.

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Free trade

Free trade is an international trade system which is based on reducing the barriers to the free circulation of goods and services.

Switzerland has followed this policy for some time. In 1960 it joined the European Free Trade Association (Efta).

Most Efta countries have left to join the EU, but Switzerland has not become a member, preferring to conclude bilateral accords with the EU.

Efta (which also includes Liechtenstein, Norway and Iceland) has also concluded free trade agreements with non-European countries including Singapore, Israel and Chile.

Recent Swiss negotiations with the US on free trade have, however, stalled.

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