Kyodo News | 27 June 2008

Japan, Switzerland in last-minute talks on free trade accord

(Japan Economic Newswire Via Acquire Media NewsEdge) TOKYO, June 27 (Kyodo) — Japan and Switzerland continued last-minute negotiations Friday on a broad agreement to liberalize bilateral trade, trade sources said.

The two countries had planned to strike a deal Friday, but some differences apparently remain regarding how to liberalize imports of Swiss agricultural products to Japan.

They are trying to reach a broad agreement in the current talks in Tokyo, expected to wrap up Saturday mid-afternoon.

But depending on the outcome, they may postpone reaching a deal until the next round of discussions or thereafter, the sources said.

The countries, which are both net food importers, started negotiations in May last year to conclude an FTA for bilateral trade.

If realized, Switzerland will be the first European country to conclude a free trade accord with Japan, which has so far signed FTAs with nine economies including Singapore and Indonesia.

Japan exported 350 billion yen worth of goods, such as automobiles and household appliances, to Switzerland last year. Exports from Switzerland to Japan amounted to 610 billion yen, with wristwatches and medicines accounting for about one-third of the total.

The two counties have already agreed to eliminate import tariffs on most industrial products, the sources said.

But more adjustments appear needed to be made as Switzerland also wants Japan to liberalize imports of milk products and wines, among other food products.

To conclude an FTA, the two countries are required to scrap tariffs on 90 percent of all trade items in value terms.

Japan and Switzerland often act together in trade liberalization talks under the World Trade Organization in the interest of protecting their domestic agricultural sectors.