Switzerland and Britain pursue renewed free trade agreement

Switzterland wants to negotiate a free trade agreement with post-Brexit Britain. © Keystone / Peter Schneider

Negotiations for a new free trade agreement (FTA) between Switzerland and Britain will start later this month, according to a joint statement.

Swiss Economic Minister Guy Parmelin met with his British counterpart, Kemi Badenoch, in Bern on Monday to give negotiations the green light from May 22.

+ Lofty ambitions for ‘innovative’ Swiss-British financial services deal

The two countries have also been negotiating ways to boost the trade of cross-border financial services.

An existing stop-gap trade treaty between the two countries was thrashed out in 2019 to keep many measures in place that existed when Britain was part of the European Union.

This treaty was largely based on the provisions of the Swiss-EU FTA signed in 1972.

That treaty is outdated, according to the British Department for Business and Trade, because it was signed “before the advent of the home computer or the internet – and does not cover services, investment, digital or data”.

“Prize on offer”

“As two of the world’s leading service economies, there’s a huge prize on offer to both the UK and Switzerland by updating our trading relationship to reflect the strength of our companies working in areas ranging from finance and legal, to accountancy and architecture,” said Badenoch on Monday.

“The UK and Switzerland are natural trading partners and today’s launch will play to our strengths as services superpowers, while also boosting investment in emerging technologies, data innovation, and digital trade.”

Badenoch hopes that a new FTA could save British business £7.4 million (CHF8.3 million) per year with the reduction of tariffs. Another aim of the deal is to create “simpler trade rules for products of origin, customs procedures and digitization”.

“Switzerland aims to integrate provisions on trade in services, investment, digital trade, intellectual property rights, small and medium-sized enterprises, and trade and sustainable development,” stated the Swiss government on Monday.

“The new agreement is intended to ensure non-discriminatory market access conditions in various areas that are important for the Swiss economy, contribute to strengthening legal certainty for economic exchange and cooperation between Switzerland and the UK.”

Trade volumes

Britain is one of Switzerland’s top ten trade partners, with nearly CHF44 billion of trade in goods and services flowing between the two countries, according to Swiss figures.

From the British side, Switzerland is its tenth most important trading venue with a combined trade volume (imports and exports) it says is worth £53 billion.

Both countries have experienced difficult relationships with the EU in recent years.