According to various sources including the official UK government website – www.gov.uk, Britain has kick-started new trade talks with Switzerland. Boris Johnson, UK prime minister and Ignazio Cassis the Swiss President, are aiming to unlock new opportunities between the two “services superpowers”.
Both countries are keen to negotiate a new free trade agreement that will boost their economies and demonstrate what is possible between two “like-minded and innovative democracies”. With the UK being the second largest exporter of services worldwide in 2020 (an estimated GBP 266 billion / CHF 325 billion) and Switzerland having the 12th largest Economy globally (valued at GBP 89 billion / CHF 109 billion), there could be a lot to talk about! Current trade between the UK and Switzerland is valued at GBP 35 billion / CHF 43 billion annually.
The UK Trade Secretary recently stated that an enhanced trade agreement with Switzerland would boost the economies of both countries and would be a huge opportunity to liberalise trade with Switzerland, which is currently the UK’s 10th largest trading partner based on value. From a UK perspective the immediate agenda looks like this:
- The UK will plan to work towards a new enhanced free trade agreement with Switzerland.
- The UK Department for International Trade is launching an 8-week consultation with UK businesses to determine the negotiating objectives.
- Current focus is on industries such as digital trade and innovative services.
Opportunities to be discussed cover customs, reducing complexity in short term mobility and building cooperation on innovation.
Brexit has meant that many provisions regulated by EU law have to be re-negotiated bilaterally. From 2021 on, a series of follow-up deals have been agreed with the UK as part of the Swiss Mind the Gap strategy.
Switzerland and the UK have always maintained close relationships over the years. The focus on economic and financial market issues has solidified this relationship and cross-border recruitment has become more prevalent.
The Federal Council has concluded new agreements covering trade, migration, road and air transport, and insurance.
Both Switzerland and the UK operate liberal economic systems and open markets are a high priority for both. In terms of numbers:
- The UK is Switzerland’s sixth most important trading partner. In 2020, Swiss imports and exports amounted to around CHF 16 billion each, a total trade volume of approx. CHF 32 billion.
- At the end of 2019, Swiss direct investments in the UK stood at nearly CHF 79 billion, which makes the UK the fifth most important destination for Swiss direct investments.
- At the end of 2019, UK direct investments in Switzerland stood at CHF 68 billion.
With at least some of the dust now settling for UK citizens working in Switzerland after Brexit, and with the UK taking a more open position on EU imports into the UK, the timing for enhanced trade talks with Switzerland is right – at least from a UK perspective.
Switzerland on the other hand, is still in “enforced limbo” with the EU, having rejected the demand for closer alignment to the EU’s rules. For Switzerland this means that the increased opportunities for trade and collaboration with the UK could represent a really positive move forward for its service-based economy.
At Accurity we shall be providing regular updates in the coming months on the developments of these trade discussions between Switzerland and the UK.
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