Leuthard targets developing markets
Economics Minister Doris Leuthard, who returned from Brazil on her first economic mission last week, lays great importance on trade relations with new economies.
Leuthard, a member of the centre-right Christian Democratic Party, tells swissinfo about the need for greater liberalisation, not only for industrial goods and services but also in agriculture.
swissinfo: Your first trade visit as economics minister took you to Brazil – what were the most important results?
Doris Leuthard: We signed a memorandum of understanding – with a mixed commission and representatives of the private sector – which will serve as a platform for providing concrete solutions to economic issues.
And of course we also discussed the Doha Round of trade talks, in which Brazil is an important player.
swissinfo: So the trip was worth it?
D.L.: Definitely. The Swiss government adopted its so-called BRIC strategy [focusing on the markets in Brazil, Russia, India and China] back in December and is now busy implementing it. This was a first measure and I am satisfied with the result.
swissinfo: Did you also come across any problems in Brazil?
D.L.: Sure. Brazil’s economic growth of 2.7 per cent last year was relatively low for an emerging market. The [Brazilian] government wants to double that.
There are various reasons for this figure. Brazil is still a relatively bureaucratic country that has creative ways of getting round tolls and taxes.
Counterfeiting goods is also a problem in Brazil – as it is in other countries. Here we discussed whether it would make any sense to tighten sanctions, since that could act as a deterrent.
swissinfo: You mentioned the BRIC nations – why does Switzerland find these specific countries so attractive?
D.L.: We’re not the only ones to find these countries attractive. We’re talking about large states with correspondingly large market opportunities.
As an export country, Switzerland is interested in these markets because we offer considerable know-how and top-quality products. This is why it is important for us to be involved right from the beginning.
swissinfo: Economic developments invariably have negative side effects. How important for you are issues such as the environment and human rights?
D.L.: These are among the most important values for which Switzerland stands.
When it comes to economics, the environment is more of an issue as it is hard to make a direct connection between investment and problems surrounding human rights. Anyway, the question of human rights is not in the foreground in Brazil as the situation there is not problematic.
As for the environment, we learnt a lot for example about ethanol fuel.
swissinfo: Human rights are likely to be more of an issue when you visit China. Have you already thought about how to deal with this?
D.L.: This trip is still being planned. My task is not primarily to criticise China – we want to learn more about the country and improve economic relations.
But this must be done in a way that is consistent with our system of values and constructive – we don’t want to act as moralists.
swissinfo: Regarding the World Trade Organization (WTO), Swiss interests diverge somewhat from those of the BRIC nations. Is Switzerland prepared to make some concessions or is it more likely to take a hard line?
D.L.: The positive thing that came out of the ministerial conference in Davos was that in addition to the BRIC states, the G-20 [a bloc of developing nations] have signalled that they are indeed focusing on the agricultural sector but they are aware that a result can only be achieved if the other states also gain something.
For us the gain can only lie in the liberalisation of industrial goods and services. Here they have showed flexibility, which then allows us to approach the liberalisation of agricultural goods.
swissinfo: You’re going to have to explain that to the Swiss farmers.
D.L.: We’re aware of that. But the farmers obviously see the developments as well. We could hardly be the only country in the world to scupper the Doha talks.
Secondly, the price pressure on the Swiss market concerning agricultural goods is a reality which is not coming from the WTO but from our neighbours, where products are 20-40 per cent cheaper. That is why we’re trying to lead our farmers in the right direction with our agricultural reforms. It’s a question of timing.
swissinfo: Would you rather speed up or slow down?
D.L.: The government has pressed ahead with its structural changes with its agricultural policy for 2011, which is currently being discussed in parliament.
This speed is necessary because the pressure from the EU and from other states is considerable. Procrastinating doesn’t benefit the farmers.
swissinfo-interview: Christian Raaflaub and Christian Schmid
Swiss Economics Minister Doris Leuthard’s four-day trip to Brazil was aimed at improving access to the Brazilian market for Swiss products and investment.
Leuthard, who was accompanied by a delegation of Swiss business leaders, also signed a memorandum of understanding on the creation of a joint economic commission.
In the first 11 months of 2006, Switzerland exported goods valued at around SFr1.3 billion ($1.04 billion) to Brazil and imported goods worth SFr719 million.
Compared with 2005, this represents a 25% increase in the volume of bilateral trade.
The level of Swiss investment in Brazil in 2005 was SFr6.5 billion.
Swiss companies provide employment for 91,000 people in Brazil.
Free trade is an international trade system which is based on reducing the barriers to the free circulation of goods and services.
Switzerland has followed this policy for a while. In 1960 it joined the European Free Trade Association (Efta).
Most Efta countries have left to join the EU, but Switzerland has not become a member, preferring to conclude bilateral accords with the EU.
Efta (which also includes Liechtenstein, Norway and Iceland) has also concluded free trade agreements with non-European countries such as Singapore, Israel and Chile.
Recent Swiss negotiations with the US on free trade have, however, stalled.
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