Switzerland and UK Agree Trade Deal to Deepen Post-Brexit Ties

(Bloomberg) — Switzerland and the UK concluded talks on an updated free-trade agreement, bringing Western Europe’s two major non-European Union economies closer together with a pact focused on services.

Both countries announced the completion of negotiations on Monday, slightly more than three years after they started. Building on a 2023 financial services agreement, the accord is intended to make it easier for firms in finance, technology, pharmaceuticals and legal services to operate across borders.

UK Business and Trade Secretary Peter Kyle and Swiss President Guy Parmelin — who is also economy minister — shook hands on the deal in Bern, highlighting how improved data sharing and worker mobility encourage investment in both countries.

“This is the most significant services trade deal the UK has ever negotiated,” Kyle said in an emailed statement. “This deal will mean faster journeys through the border, cheaper phone use for families and business travelers to Switzerland, and new opportunities for British firms selling their world-class services overseas.”

At a press conference in Bern on Monday morning, Parmelin said the agreement sent a clear political signal “in a context marked by geopolitical tensions, the fragmentation of the global economy and the rise in protectionist trends.”

Bilateral trade was more than £50 billion ($67 billion) last year, the UK said, around £30 billion of which was in goods. Improved market access and reduced administrative barriers under the accord are estimated to boost services trade by £5.2 billion per year in the long run, it added.

Both sides aim to sign the deal before the end of this year, Parmelin said. It has to pass parliaments in both countries before it can enter force.

Negotiations began in May 2023 under the UK’s then-Conservative government. The aim was to modernize arrangements that had rolled over after Brexit from a 1972 agreement with the EU. That treaty largely covered goods and predated the rise of internet-based services trade.

Monday’s handshake is a late success for Prime Minister Keir Starmer, whose government continued the negotiations. Starmer resigned last month after a poor round of local elections for the governing Labour Party.

His presumptive successor, former Greater Manchester mayor Andy Burnham, has not yet announced who his cabinet might consist of. Kyle — who has been publicly loyal to Starmer — said at Monday’s press conference he hoped to keep his position.

There were earlier disagreements on intellectual property rights, a key issue for the pharmaceutical industries in Switzerland and the UK. For the first time in any FTA, the UK will commit to maintaining its 10-year Regulatory Data Protection period, which prevents generic drug manufacturers from competing for a decade after an original medicine is licensed.

Broader intellectual property regimes will remain unchanged. Previous reports suggested that the UK’s Department of Health and Social Care was reluctant for existing protections to be enshrined in the trade deal, amid concerns around costs for the National Health Service.

Parmelin said the main gain on intellectual property was “to firmly entrench it in an international agreement that binds the high levels of protection that are already applied by both countries.”

The deal will also cover worker mobility between the two countries. The UK will open up a new migration route whereby high-skilled Swiss workers, who have a sponsoring employer, can move to the UK for three months visa-free. Switzerland will allow the same opportunity to British workers.

UK firms will be able to move staff to their Swiss offices for up to five years without being subject to strict economic needs tests, while the UK said graduates in areas like finance, insurance and consultancy would now find it easier to gain a work permit in Switzerland.

Switzerland will also allow UK nationals to use eGates to scan their passports at the border, cutting down on waiting times in airports for both tourists and business visitors.

On digital services, the deal will prohibit either the UK or Switzerland from imposing localization requirements on the storage of data — so businesses can choose more freely where to set up data centers, and will not have to put their data on a Swiss server in order to operate there.

While negotiators did not intend to delve into the more controversial area of agriculture, they did agree some minor adjustments to tariffs on goods including a reduction in the levy charged on Swiss wine.

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