Clouds appear in sunny Swiss-US economic ties
Swiss trade with the United States has reached record levels but the Swiss-American Chamber of Commerce warned on Friday that there are clouds on the horizon.
It said the sunny picture of bilateral economic relations was marred by a considerable slowdown in recent years of Swiss investment in the US, and there were many hurdles to new investments.
Swiss exports to the US grew by 14 per cent last year to reach a record level of SFr16.1 billion ($12.97 billion). Exports of US goods to Switzerland saw a real boom, increasing over 16 per cent to $10.7 billion.
But at the Chamber’s annual news conference, chamber chief executive Martin Naville said that with the failure of the World Trade Organization’s Doha Round of trade liberalisation talks, Switzerland risked being relegated to a secondary role, as the US intensified dialogue with the European Union.
He added that Switzerland also risked experiencing growing discrimination compared with countries that had completed free trade agreements with the US.
Earlier this year, hopes of serious negotiations on such a Swiss-US accord were dashed over differences on the controversial issue of agriculture. Switzerland has long been criticised by the international community for its heavy subsidies to the sector.
Missed opportunity
Naville described the failure to open such negotiations as a “missed opportunity”.
“I’m obviously very disappointed. I thought this would have been a great opportunity for Switzerland,” he told swissinfo.
However, he described the creation of a Trade and Investment Cooperation Forum between the two countries in May as a positive step.
“We’re much better off than 12 months ago… The disappointment is kept in bounds but obviously you’re always disappointed when your dreams are not realised,” he commented.
Naville called for recognition that trade and investment with the US was of key importance and for full implementation of the Swiss government decision in May last year for a “balanced focus” between the EU and the US.
He added that it was also time for Switzerland to do some confidence building with the US at the Forum.
“We told the Americans we didn’t want to negotiate [on a free trade agreement]. It’s time to show that Switzerland is ready to negotiate. Negotiations imply you are also ready to give something and not only want to have something.”
“The American economy is of great value to Switzerland. Let’s treat the US adequately,” he added.
The acting US chargé d’affaires in Bern, Carol Urban, pointed out it was vital for both Switzerland and the US to focus their energies on the substance to be discussed during the Forum’s first year.
Urgency
“We must have a productive first year to prove to our business communities that the Forum can result in greater trade, higher employment, more investment and stronger economic growth.”
“Our two governments must move forward quickly and ambitiously. The urgency is greater than ever now that the Doha Round of talks has stalled,” she said.
For his part, Switzerland’s new ambassador to the US Urs Ziswiler said he was not disappointed by the decision against talks on the free trade agreement.
“I was always a realist, knowing that a free trade agreement also includes agriculture… To include agriculture would have been extremely difficult,” he told swissinfo.
“Just look at the stumbling block of the Doha Round. It was agriculture and it was the same for the free trade agreement.”
He noted that topics for discussion at the Forum, which will take a sectorial approach to strengthening Swiss-US ties, could include e-commerce, culture and intellectual property.
Ziswiler also outlined what he saw as his primary role in Washington.
“My main job is bridge building, opening doors and to be more concrete to emphasise the positive things – that means what unites Switzerland and the United States and not what divides us”.
swissinfo, Robert Brookes in Zurich
The Swiss direct investment position in the US amounts to $123 billion. Switzerland is the second largest foreign investor in the US manufacturing sector.
Swiss companies have created nearly half a million high-value jobs in the US. The average compensation per employee is $70,000.
The US invests over $101 billion in Switzerland – more than in South America and the Middle East combined.
Switzerland is the 8th largest buyer of US private services and purchases more US goods than Russia and Saudi Arabia together.
650 US companies employ 67,000 people in Switzerland.
From the Swiss perspective:
Swiss exports grew 14% last year to the record level of SFr16.1 billion.
The US is the second largest export market (10.7%) behind Germany (20%) but ahead of France (8.5%), Italy (8.2% and Britain (5.1%).
Foreign direct investments (FDI) of Swiss companies in the US remain high with about 34% of all FDI, compared with 5.4% to Germany.
From the US perspective:
Exports of US goods to Switzerland increased more than 16% to $10.7 billion (making Switzerland the 17th largest export market)
US exports to Switzerland are four times those of US exports to Austria and larger than US exports to Saudi Arabia and Russia combined.
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