Tackling high prices: Switzerland takes measures
Market competition

Tackling high prices: Switzerland takes measures

Businesses in Switzerland will benefit from cheaper goods and less paperwork, enabling them to produce their own goods more cheaply and be more competitive in global markets.

The Swiss Federal Council decided in December 2017 to unilaterally remove tariffs on imported industrial goods. Now that's quite a measure! 

Tariffs will also be reduced on selected agricultural goods not produced in Switzerland. Furthermore, Switzerland wants to expand the “Cassis de Dijon” principle – which states that products lawfully produced and marketed in the EU can also be sold in Switzerland without restriction – by reducing the number of exceptions. 

These measures should lead to considerable savings of around CHF 900 million for businesses and consumers. The Swiss Federal Council launched a consultation procedure to simplify the process for authorizing foodstuffs under the Cassis de Dijon principle on December 8, 2017, which ran until March 23, 2018.

>> View the official press release of the Swiss Federal Council

Removing industrial tariffs will have direct benefits for consumers, as duties are still imposed on a range of imported goods, including cars, bicycles, toiletries, household goods, and clothes.  

At the same time, many businesses in Switzerland will benefit from cheaper intermediate goods and have less paperwork to complete. This will enable them to produce their own goods more cheaply and be more competitive on international markets. Studies show that the removal of industrial tariffs will result in substantial savings for the Swiss economy and its consumers.  

In terms of state revenue, however, this means losses of several hundred million francs. The proposal put to consultation will therefore be closely aligned to the Swiss Federal Council’s fiscal policy. 

Lower import duties on selected agricultural products 

The markup on agricultural goods and foodstuffs in Switzerland is 60%, higher than in any EU country. The Swiss Federal Council has therefore instructed the EAER to reduce the import tariffs on goods not otherwise produced in Switzerland, including bananas and other exotic fruits. Import tariffs will not be removed from agricultural products that are also grown in Switzerland. 

More efficient application of Cassis de Dijon principle 

Technical barriers to trade also push up prices in Switzerland. In order to remove such barriers to trade in dealings with the EU, Parliament introduced the Cassis de Dijon principle in 2010. This allows products to be imported into Switzerland if they are produced according to EU regulations and are lawfully traded within the EU. 

At the time, exceptions to the principle were also defined, thereby reducing its effectiveness. The Swiss Federal Council has therefore now decided to shorten the list of exceptions and launched the consultation on simplifying the authorization system for foodstuffs traded in Switzerland that ran until end of March 2018.

Fair Price Initiative to be debated next year 

The popular initiative on reducing prices in Switzerland (Fair Price Initiative) was submitted on December 12, 2017. The series of measures now proposed by the Swiss Federal Council serves to combat high prices in Switzerland, thereby promoting the initiative’s objectives. The Federal Council will discuss the initiative in the coming year, within the statutory period.

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