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Switzerland launches free trade talks with Singapore

Pascal Couchepin is representing EFTA in free trade talks with Singapore

(swissinfo.ch)

The Swiss economics minister, Pascal Couchepin, is in Singapore for talks on a free trade agreement between the Asian city-state and the European Free Trade Association (EFTA).

Couchepin and Singapore's trade and industry minister, George Yeo, formally announced the beginning of "exploratory talks" at a meeting on Friday.

Singapore is seeking an accord to boost exchanges with Europe and to reduce its dependence on the United States, which still takes most of its exports.

The downturn in the US economy is likely to hit Singapore particularly hard, as the worst affected hi-tech sector accounts for a big share of the island's exports.

The ING Barings bank estimates that a 10 per cent drop in exports of electronic goods to the US would lead to a 2.2 per cent fall in Singapore's Gross Domestic Product.

On the part of EFTA, the move to reach an accord with Singapore is in line with the strategy it adopted after the end of the Cold War.

Over the past decade, the association made up of Switzerland, Norway, Iceland and Liechtenstein, has sought to widen its network of relations.

In the 1990s, EFTA concluded 16 free trade agreements with countries in eastern Europe and the Mediterranean area. The move was partly sparked by fears that accords struck with these countries by the EU threatened to discriminate against businesses in EFTA states.

In 1995, EFTA decided to widen the geographical scope of its efforts beyond the confines of Europe. It has been pursuing free trade agreements all the more vigorously since multilateral negotiations under the auspices of the World Trade Organization have become paralysed.

A free trade agreement with Mexico and a declaration on trade and investment co-operation with the South American free trade association, Mercosur, both signed in 2000, extended EFTA's network across the Atlantic.

During his visit to Singapore, the Swiss economics minister will also be examining its financial centre. Switzerland is coming under pressure to fall in line with EU measures on taxing savings, and fears that Singapore could try to attract customers driven away by the lifting of banking secrecy.

Couchepin will also travel to Brunei for one day on Saturday, becoming the first Swiss minister ever to visit the Sultanate.

by Malcolm Shearmur


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