Includes the barriers (tariff and non-tariff) that U.S. companies face when exporting to this country.
Switzerland generally meets its commitments under WTO and bilateral agreements, making it a desirable market for U.S. products and services. Switzerland has signaled its interest in pursuing a potential free trade agreement (FTA) with the United States.
However, some barriers to trade remain in a select few areas of Switzerland that present limitations to U.S. market opportunities. Swiss agriculture is highly subsidized and regulated, with price controls, import restrictions, tariff rate quotas, and tariffs all supporting domestic production. Imports of nearly all agricultural products, particularly those that compete with Swiss products, are subject to seasonal import duties, tariff rate quotas, and import licensing. U.S. agricultural product access to the Swiss market further faces challenges from restrictive standards of some private sector actors and certain government regulations.
Recently there have been signs that Switzerland is willing to reduce its agricultural barriers somewhat. Under a proposed FTA between the Mercosur states of South America and the European Free Trade Association (EFTA, a regional trade organization comprised of Switzerland, Liechtenstein, Iceland, and Norway), Switzerland has signaled a willingness to introduce more generous tariff rate quotas on agricultural goods than it had previously allowed. Further, in March 2021, Swiss voters approved a free trade agreement between Indonesia and the EFTA), which requires that any palm oil imported under preferential tariffs be produced sustainably. This is said to be the first-ever agreement of its type that links trade preferences to sustainable methods of production.
Switzerland also has a strict regulatory regime for agricultural biotechnology products. For biotech food or animal feed products to be imported and sold on the Swiss market, they must undergo a lengthy approval process. In addition, labeling is required for products containing biotech ingredients or derived from such ingredients. A moratorium on commercial cultivation of biotechnology crops and marketing agricultural biotechnology animals is currently scheduled to remain in force through the end of 2025, following renewal in 2022. Research is not restricted by the moratorium.
A continuing obstacle for certain U.S. exporters, particularly those of high-value products, is the food retailing system. Two retail giants, Migros and Coop, account for around 69% of grocery sales and dominate the Swiss food retail market. U.S. exporters are disadvantaged because the chains promote regional products and their own store brands over international brands. In addition, both retailers have a policy in place not to sell genetically modified produce. However, foreign retail chains have made inroads over the last decade, weakening somewhat the combined market power of Migros and Coop.
In January 2017, the U.S. and Swiss governments concluded the U.S.-Swiss Privacy Shield Framework to provide companies a mechanism to comply with Swiss data protection requirements when transferring personal data from Switzerland to the United States. A July 2020 ruling by the European Court of Justice (ECJ) struck down the adequacy decision that underpinned the EU-U.S. Privacy Shield framework, and the Swiss Federal Data Protection and Information Commissioner (FDPIC) followed suit in September 2020, concluding that the Swiss-U.S. Privacy Shield Framework does not provide an adequate level of protection for data transfers from Switzerland to the United States. In coordination with the U.S. data services industry, the United States continues to engage with our EU and Swiss partners to restore an appropriate mechanism for the transfer of personal data.
Some Swiss sectors operate under state or cantonal monopoly, such as long-distance rail transportation, delivery of letters up to 50 grams, some types of property insurance, and the production and importation of salt, though Switzerland’s growing trend towards liberalization has removed many barriers to competition in automotive, electrical, telecommunications, and postal industries.