British business reaches out to eastern Switzerland

David Roberts says British business ties with Switzerland have never been better swissinfo.ch

The British embassy in Bern is trying to convince eastern Switzerland to do more business with Britain.

In a bid to boost economic ties with the region, the embassy’s trade and investment division – in conjunction with the British-Swiss Chamber of Commerce – has organised two days of activities in the Swiss city of St Gallen.

“We have to admit that we’ve neglected this area in the past, ” said David Roberts, deputy head of mission at the British embassy. “Yet this region of Switzerland has tremendous connections with Britain that date back centuries.”

The founder of a seventh century convent in St Gallen, Gallus, was originally from the British Isles, while the first envoys sent by a British monarch to the town date back to the same period.

Roberts notes that the British are slowly changing their perception of the region from being just a quaint part of Switzerland to a place which is home to a number of companies that have become leaders in niche markets around the world.

Trade relations

By taking an interest in the eastern part of the country, the British are also attempting to build on an already strong bilateral trading partnership with Switzerland.

Roberts says people are often surprised to discover the extent of economic and cultural relations between the two countries.

“There has always been a very good relationship between the British and the Swiss, almost a love affair,” he told swissinfo. “Yet many British people think of Switzerland as holiday destination, they love the hospitality, the beauty of the mountains, and so forth.”

Less widely known is the fact that Switzerland is Britain’s biggest market outside the United States and the European Union, and is its 10th most important international trade partner.

According to statistics from the State Secretariat for Economic Affairs (Seco) in Bern, Britain is also Switzerland’s fifth biggest trade partner.

Popularity of British goods

British goods and services are popular with the Swiss, says Roberts, and Switzerland is Britain’s fastest growing European market. According to recent British government statistics, goods worth a total of £3.8 billion (SFr8.68 billion) were sold to the Swiss last year, up 17 per cent over 2000, while trade with other countries fell during the same period.

Roberts also believes the Swiss – much more so than their French or German neighbours – tend to prefer buying British, and he points out that Swiss people are attracted to quality products.

“Since the economic downturn of last year, there has been a sort of flight to quality,” he said. “People are looking to reliable markets.”

British goods and services may be attractive to the Swiss, but Switzerland also invested a total of £8.5 billion into British industry during 2000.

British reluctance

The British, though, seem less interested in putting their money into Swiss businesses, investing a quarter of the amount that the Swiss do in Britain. Roberts says a number of factors may explain this reluctance.

“The average British entrepreneur may find Switzerland a slightly more difficult place because of the cantonal system and the wide variety of rules and regulations,” he told swissinfo.

“The British aren’t particularly good at languages either. So it’s a potentially difficult choice between investing in North America, Scandinavia or the Netherlands, or coming to Switzerland.”

Nor are economic relations between Britain and Switzerland without their occasional strains. Swiss bankers in particular were rankled by recent remarks made by the British chancellor, Gordon Brown.

In a speech to European Union finance ministers in Luxembourg, Brown warned that countries which did not lift banking secrecy in tax-related matters could face isolation.

Banking secrecy

Secrecy has always been touted as one of the pillars of Switzerland’s banking system, and the Swiss finance minister, Kaspar Villiger, has repeatedly made it clear that the subject is non-negotiable.

But Roberts denies that the British chancellor is out to destroy Swiss banking secrecy.

“It is certainly not a personal crusade by Gordon Brown,” he said.

“This can be seen in terms of a wider global tide flowing towards greater openness, greater transparency in banking matters. Gordon Brown has simply asked if Switzerland wants to be part of this process, or to swim against this tide.”

“Everybody agrees that in banking you need some client confidentiality, you need privacy, and Switzerland competes and will continue to compete very successfully on those terms.”

Competitive banking sector

The British diplomat says he has no concerns that Switzerland will suffer if the country’s banking secrecy laws are watered down.

“Switzerland has a particularly competitive banking industry, and I think it will continue to be the centre of the European banking industry, not by protecting EU tax evaders, but by offering a broad service to investors, something that it has always done.”

Roberts dismisses as nonsense accusations that Brown wants to help the city of London attain pre-eminent status in Europe by attacking rival financial centres.

“Financial centres aren’t working against each other, they are working together,” he said.

“You only have to see how the London and Swiss stock exchanges are collaborating to see that.”

by Scott Capper