Economics Minister Doris Leuthard says Switzerland wants to extend a free trade agreement between Turkey and the European Free Trade Association (Efta).

Speaking in Istanbul on Friday, Leuthard said the accord between Turkey and Efta countries – Switzerland, Liechtenstein, Norway and Iceland – should also include services.

"The services sector is becoming more important in Turkey," Leuthard said. She said a joint working group would be set up to look into the issue.

Leuthard also said Turkey had made progress in its plan to build the controversial Ilisu hydroelectric dam, including dealing with the issue of flooding populated areas.

Switzerland, together with Germany and Austria, has said it would remove state guarantees for companies involved in the project if Turkey did not take measures to aid people threatened with resettlement and to protect cultural treasures and the environment.

The economics minister said, however, that a more detailed analysis was required before the Swiss government could pass final judgement.

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