WTO criticises Swiss over farm subsidies

The WTO says Swiss agricultural policy is too protectionist swissinfo.ch

The World Trade Organization (WTO) has released a report criticising Switzerland’s protectionist agricultural policy.

It said the amount of state financial support for farming had not changed since 2000, the date of the Geneva-based WTO’s last policy review of Switzerland.

The WTO said on Wednesday that bilateral agreements with the European Union had led to some market liberalisation in Switzerland, but pointed out that the agriculture sector was still lagging behind.

It added that Swiss agricultural policy still had to distance itself from the principle of self-sufficiency set out in the country’s constitution.

Agricultural imports that are in direct competition to home-grown produce are still subject to high customs tariffs.

This was mainly to the detriment of Swiss consumers and other sectors of the Swiss economy, said the WTO.

Subsidies

The WTO said the level of state subsidies for farming had not changed for four years, although it noted that a gradual move away from price support towards direct payments had continued.

Last August Switzerland signed up to an international agreement with the WTO, which foresees the gradual phasing out of protective tariffs and subsidies for farmers.

The country’s agricultural community criticised the move and warned that more farmers would go out of business.

In November the Federal Agriculture Office warned that farmers stood to lose an estimated SFr1.5 billion ($1.3 billion) to SFr2.5 billion from 2008 because of the new WTO rules.

Farmers are already having a tough time, with 2.5 per cent of farms having to close between 1999 and 2003, and many farmers having to diversify to survive.

Other sectors

Away from agriculture, the WTO report noted that the government had undertaken a number of reforms to external trade in order to increase transparency and competition as well as reduce prices.

It also recognised that Switzerland’s economy was recovering from a prolonged period of stagnation and that the country was still heavily dependent on external trade.

Switzerland is due to respond to the report, which also covers Liechtenstein, at a press conference on Friday.

swissinfo with agencies

Key facts

The WTO promotes free trade by persuading countries to abolish import tariffs and other barriers.
It was founded in 1995 as the successor to the General Agreement on Tariffs and Trade (GATT).
It has 148 members. China joined in 2001, but Russia is still battling to become a member.

In brief

The principle of agricultural self-sufficiency is set down in the Swiss constitution. It was adopted during the Second World War.

Reform of the sector only really started in the 1990s, following the GATT and WTO trade rules.

But Swiss farmers still receive higher subsidies than their counterparts in other countries, despite a move away from price support towards direct payments.