The European Free Trade Association (EFTA), of which Switzerland is a member, has concluded a free trade agreement with South Korea.
The deal follows an initiative launched by Swiss Economics Minister Joseph Deiss and is the first of its kind reached between Seoul and Europe.
Deiss finalised the agreement with the South Korean trade minister, Kim Hyun-Chong, in the Chinese city of Dalian, where they are attending a mini ministerial meeting of the World Trade Organization.
"This treaty offers considerable opportunities for Switzerland," Deiss commented at the end of the talks, noting that Asia was home to some of the world’s fastest-growing economies. EFTA’s other members include Liechtenstein, Norway and Iceland.
Deiss insisted that the accord covered both free trade and "cooperation", which meant that it extended beyond commerce alone.
The accord contains clauses on competition policy, services and intellectual property, he explained.
The total volume of trade between South Korea and EFTA currently stands at $2.13 billion (SFr2.75 billion).
A preliminary analysis by South Korea of the potential gains from the agreement indicates that EFTA exports to that country could increase annually by more than $700 million (SFr894 million), while South Korean exports to the EFTA states could increase by more than $600 million.
Deiss believes that the increase of trade for Switzerland alone could be between ten and 30 per cent.
Swiss exports to South Korea are already worth more than SFr1.3 billion, while imports have reached about SFr600 million.
In 2004, South Korea’s gross national product (GNP) was more than $600 billion, making it the world’s seventh largest economy - counting the European Union as a single market. By the same calculation, EFTA as a group is the world’s tenth largest.
In a communiqué on Tuesday, EFTA said the agreement would provide a wide range of tangible benefits for both sides.
It also created considerable potential for the expansion of regional business opportunities.
The text of the free trade agreement is due to be signed in November at the autumn EFTA ministerial meeting in Geneva.
Negotiations between the two sides were launched in Geneva last December and completed in four rounds of talks.
swissinfo with agencies
According to the World Bank, South Korea is the world’s seventh largest economy (counting the EU as a single market).
EFTA is the tenth largest.
Swiss exports to South Korea in 2004 totalled SFr1.3 billion.
Swiss imports from South Korea totalled SFr600 million.
The volume of trade between South Korea and EFTA members stands at SFr2.75 billion.
Preliminary estimates say this volume could rise by an annual SFr1.65 billion.
The European Free Trade Association was created in 1960 as a counterweight to the European Economic Community (now European Union). Its founding members were Austria, Denmark, Norway, Portugal, Switzerland, Sweden and Britain.
EFTA now has four members – Iceland, Norway, Liechtenstein and Switzerland.
Switzerland is the only EFTA country which is not part of the European Economic Area.
In addition to its free trade relations with the EU, EFTA states have free trade accords with 14 other countries.