WT/TPR/S/208Trade Policy Review Page 106
Manufacturing in Switzerland and Liechtenstein also includes the processing of agricultural goods (section 2(iii)(a)). While certain incentive schemes are in place to support the production of processed agricultural goods (e.g. the Price Compensation Scheme (section 2(ii)), there are no specific incentive schemes for other manufacturing subsectors. Nonetheless, the close cooperation between universities and manufacturers, as well as Switzerland's high level of R&D expenditure, has contributed to the success of its high-tech industries.
Using ISIC definition, imports in the manufacturing sector face an average tariff of 6.9%, down from 7.7% in 2004. However, these averages mask peaks of up to 121.6% on used clothing. Tariffs exceeding 25% are applied mostly on textile products, but also on used tyres, and fish liver oils.
(ii) Textiles, clothing, and footwear
Employment in Switzerland's textiles and clothing industry has contracted continuously, from over 33,000 in 1995 to less than 16,200 in 2007.23 Imports of textiles, wearing apparel, and leather products amounted to over US$8.8 billion in 2007, while exports were US$4.1 billion. MFN tariffs on textiles and clothing products remain relatively high, averaging 12.8% on cordage and 9.1% on made-up textile goods. Tariffs exceeding 45% are applied on used clothing, catgut imitations, and woven fabrics obtained from synthetic textile strip.24 The industry's interests are represented by Swiss Textiles.
The footwear industry has virtually disappeared from Switzerland, with remaining employment estimated at 350, producing mainly for niche markets.25 Tariffs on footwear average 2.3%.
(iii) Chemical and pharmaceutical products
Switzerland's chemical and pharmaceutical industry consists mainly of export-oriented companies producing a wide range of highly specialized goods. Alongside major companies, the industry is made up of some 1,000 small- and medium-sized businesses, with an increasing importance of biotech companies. Some 64,000 persons are employed in the subsector. Sectoral interests are represented by SGCI Chemie Pharma Schweiz.
Switzerland's exports of chemicals, plastics, and pharmaceuticals (ISIC code 35) amounted to US$61.8 billion in 2007, whereas imports were US$44.3 billion. Import tariffs are low, with an average of 1.3%. Drugs and medicines are tariff-free.
(iv) Machines and equipment
The Swiss machine and equipment industry produces a wide range of goods, including precision instruments, watches, optical and scientific instruments, and generators and turbines. The industry employs some 98,000 people. Exports of goods belonging to the category of machinery, equipment, and fabricated metal products (ISIC code 38) amounted to US$73,622 million, while imports were US$59,062 million in 2007. Tariffs on machines and equipment are low, with an average of 1.0% and a maximum of 24%.
23 Swiss Textile online information. Viewed at: http://www.swisstextiles.ch/boxalino/files/ Document71file.pdf.
24 HS codes are 6309.0000 (121,6%), 5804.9010 (49%), and 540.7200 (47.4%).
25 NZZ Folio, "Nichts geht mehr", November 2007.