Swiss businesses must prepare for both the opportunities and risks posed by enlargement of the European Union, according to a Credit Suisse report.
The study, entitled "The European Union - the big push eastward", says Switzerland stands to benefit greatly from increased trade with eastern European nations, which has doubled in the last five years. But it also faces the challenge of increased competition from imports from the region.
"The EU will be enlarged eastwards by 2005 and that's a very short time to prepare," Fritz Stahel, a senior economist at Credit Suisse, told swissinfo. "Swiss businesses still have some work to do."
The greatest trade opportunities are expected to be with the Czech Republic, Hungary and Poland, says Stahel. "It's really those countries which will continue to be the region's most important trade partners," he added.
Pressure from imports
"But while enlargement gives us direct access to these countries, there's also an increased pressure from imports", says Stahel.
The EU intends to conclude negotiations with new candidates by the end of 2002, with full membership possible by 2004. However, Credit Suisse said it expected expansion to be delayed until the following year owing to the protracted nature of the negotiations.
Ten countries are being considered for the first phase of the expansion programme: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Malta, Poland, Slovakia and Slovenia.
Once they have joined, the new members will be covered by EU legislation, including the 1972 Free Trade Agreement with Switzerland and the seven new bilateral agreements signed between the Swiss and the EU, which come into force on June 1.