The prices of goods and services in Switzerland are on average significantly higher than in neighbouring countries. There are a number of factors contributing to Switzerland's reputation as a 'high-price island'. One is the country's high wages and costs, which drive up prices. But another reason is the various tariff and non-tariff trade barriers, which have the effect of isolating the Swiss market, allowing companies to charge higher prices here than abroad. SECO previously examined the impact of these in a series of studies. With a view to reducing trade barriers, the Federal Council adopted a package of import facilitation measures on 20 December 2017. One of these measures is the lifting of industrial tariffs.
Removing industrial tariffs will strengthen Switzerland's position as a business and industrial location. The welfare gains achievable are estimated at some CHF 860 million. Whereas customs duties once served to protect domestic industry from foreign competition, today they make it more expensive to procure input materials from abroad. With the lifting of customs duties and the associated simplification of administrative procedures, businesses in Switzerland will benefit from cheaper inputs and thereby also lower production costs. Given that the Swiss economy is highly integrated in global value chains, this will also improve its international competitiveness. Trade ties will become more efficient overall and competition will improve. Consumers also stand to benefit from the measure as import duties are still currently levied on various consumer goods such as cars, bicycles, personal care products, household appliances and clothing. In sectors with functioning competition, the savings will be passed on to consumers, and this will be monitored.
In addition to the lifting of industrial tariffs, the bill also provides for a streamlined tariff structure for industrial products, which will further reduce the administrative burden.