Federal Council adopts measures to tackle high prices in Switzerland

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Bern, 20.12.2017 – On 20 December the Federal Council decided to unilaterally remove tariffs on imported industrial goods. Tariffs will also be reduced on selected agricultural goods not produced in Switzerland. Furthermore, the government wants to apply the Cassis de Dijon principle more widely by reducing the number of exceptions to it. These measures should lead to considerable savings of around CHF 900 million for businesses and consumers. Previously, on 8 December, the Federal Council launched a consultation procedure on simplifying the process for authorising foodstuffs under the Cassis de Dijon principle.

Removing industrial tariffs will have direct benefits for consumers, as duties are still imposed on a range of imported goods. These include 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 so 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, it means losses of several hundred million francs. The proposal put to consultation will therefore be closely aligned to the Federal Council’s fiscal policy.

Lower import duties on selected agricultural products

In Switzerland the mark-up on agricultural goods and foodstuffs is 60%, higher than in any EU country. The Federal Council has therefore instructed the EAER to reduce the import tariffs on goods not otherwise produced in Switzerland. This includes 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 Federal Council has therefore now decided to shorten the list of exceptions.

In particular, the Federal Council proposes eliminating differences in Swiss regulations on the energy efficiency of household appliances and in declarations on wood and wood products. This should result in a wider range of goods being available in Switzerland, greater competition and lower consumer prices.

On 8 December the Federal Council launched a consultation on simplifying the authorisation system for foodstuffs traded in Switzerland in accordance with the Cassis de Dijon principle. This will make it easier to import foodstuffs. In the proposal, the obligation to obtain authorisation for foodstuffs according to the Cassis de Dijon principle will be replaced by a digitised reporting procedure. The consultation runs until 23 March 2018.

Fair-Price Initiative to be debated next year

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