This report is prepared on request of the Swiss State Secretariat for Economic Affairs (SECO), Division Growth and Competition Policy. SECO asked CPB Netherlands Bureau for Economic Policy Analysis to estimate the quantitative economic implications of a possible decision by the Swiss government to fully adopt the European Commission proposals for a services directive. This report estimates the quantitative economic implications of a possible decision by the Swiss government to fully adopt the European Commission proposals for a services directive. The European Commission's 2004 proposals for a Services Directive consists of measures to reduce or eliminate the obstacles of cross-border trade of services by introducing the ‘country of origin’ principle. It implies that regulation of the country of origin is relevant, and that the country of destination has no right to impose new regulation. The European Commission has also proposed measures to reduce the obstacles for the establishment of an affiliate abroad by introducing a single point of contact for the service providers to deal with all rules and procedures. Moreover, the EC also introduces mechanisms to build up trust of the member states in each other national regulatory regimes. The EU proposal is only partially aimed at reducing the level of service market regulation in Member States, although local producers might benefit as well from some proposed measures that focus on the elimination of unnecessary and EU-incompatible national regulations. Our results indicate that the introduction of the 2004 EU services directive in Switzerland would very much intensify the economic relations between the service industries of Switzerland and the European Union. We have investigated the direct effects of mutual liberalisation of services markets. These are strictly positive, both for Switzerland and the EU. Our estimates are presented as a range of likely outcomes, given statistical uncertainties and uncertainties related to the eventual implementation form of the services directive. The results must therefore be interpreted as a likely order of magnitude of the long-term effects rather than as point forecasts. Keeping this in mind, Swiss exports of commercial services to the EU could increase by 40 to 84 per cent, while Swiss foreign direct investment stocks in EU services industries could increase by 20 to 41 per cent. EU services exports to Switzerland may rise by 41 to 85 per cent, while EU direct investment stocks in Swiss service markets could rise by 29 to 55 per cent.