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US free-trade deal on shaky ground

Deiss gives an update on the status of the talks Keystone

The prospect of a Swiss-US free-trade accord is in doubt, mainly due to differences over agriculture, according to Swiss Economics Minister Joseph Deiss.

This content was published on January 18, 2006 - 21:54

On Wednesday the Swiss cabinet asked Deiss to look at the feasibility of such an agreement, now that exploratory talks have come to an end without clear progress.

Following the discussion with cabinet and the conclusion of the initial talks, Deiss played down hopes of a deal.

He told a press conference in the Swiss capital, Bern, that he was very cautious about the prospect of an agreement.

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

Martin Naville of the Swiss-American Chamber of Commerce told swissinfo he was hopeful that the two sides could work out their differences. "But that's more hope than certitude," he said.

"We very much hope that in the balance between the 99 per cent of Gross Domestic Product that provides value and the one per cent that gets a lot of money [agriculture], the balance would rather go in favour of the 99 per cent," Naville added.

Exploratory talks

Last June the Swiss cabinet announced plans to begin exploratory talks with Washington on a free-trade agreement. They started in September and ended last week.

Deiss is due to meet the US trade representative, Rob Portman, at the end of January at the World Economic Forum meeting in Davos to decide whether to proceed with formal negotiations.

They are both convinced that economic ties between the two countries must be significantly deepened, but this should not mask the problems to be overcome, said Deiss.

The US is Switzerland's biggest export market after the European Union, accounting for 10.4 per cent of exports.

It is also the most important target country for Swiss investors, with Swiss investments in the US currently totalling SFr80 billion ($62 billion). The US invests the same amount in Switzerland, making it the country's biggest investor.

Disappointment

Swiss business representatives have expressed disappointment at the government's "hesitant" approach to brokering a free-trade agreement with the US.

Thomas Pletscher of the Swiss Business Federation, economiesuisse, said this great opportunity to open up markets with the world's biggest economic power should not be missed.

But the Swiss Farmers Association as well as the country's main consumer organisation were pleased with the government's slower pace.

"We are glad that the cabinet seems to be approaching the issue with the necessary caution and taking account of agricultural interests," said Urs Schneider of the Farmers Association.

swissinfo with agencies

Key facts

In 2004, Swiss exports of goods and services to the US totalled SFr14.2 billion.
The US market accounts for 10% of all Swiss exports, making it the second most important market after Germany (20.6%).
In 2004, imports of US goods and services totalled SFr5.7 billion.

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