US/Swiss free trade pact on the horizon? For Switzerland, the USA represents the second-largest export market after Germany. But a free-trade agreement with America has rarely been pursued--until now.
| Auteur | Anderson, Robert |
| Fonction | Politics |
For millenia--from the Egyptians in the Old World to the Mayas, Aztecs, and Incas in the New World, from the mercantilist era to modern globalisation--countries have exploited bilateral commercial treaties to obtain comparative advantage.
Growth and decline of civilisations have been shaped by the environment, technology, warfare, religious beliefs--and free trade. For example, several 17th-century treaties made Portugal a virtual commercial vassal of England. In the past, commercial treaties were customarily imposed after wars. The English found that war, as an instrument of policy, could be both effective and profitable.
Today, the Swiss, as pragmatic free-traders conscious of the power of vested interests, are finding that economic wealth can also be an effective and lucrative instrument of policy.
Last year, Switzerland exported roughly 14 billion CHF in goods to the USA and imported the equivalent of about 6 billion CHF. Trade between the two countries has always been robust, but the concept of formalising a free trade pact never really took off.
'Encouraging'
The Swiss-American Chamber of Commerce currently sees a favourable opportunity for hammering out an agreement between the two countries and is enthusiastically touting the project. The Swiss State Secretariat for Economic Affairs (SECO) has taken the reins and is in the process of negotiating a deal with its US counterpart. Following a recent visit to Washington D.C., SECO State Secretary Jean-Daniel Gerber described the American response to a free-trade agreement as very encouraging.
Key partners
The basis for a formal pact between the USA and Switzerland is centered on the significance of America as one of Switzerland's key economic partners. The financial relationship between is probably closest when it comes to in direct investment. Swiss companies invested roughly 67 billion CHF in the USA in the period 1999 to 2003, while US firms invested around 34 billion CHF in the same period.
For Switzerland, the amount of foreign direct investment in the USA outstrips that of any other country in percentage terms. But even from the perspective of America, the bilateral investment flows are not insignificant. According to the Swiss-American Chamber of Commerce, Switzerland is the sixth-largest foreign investor in the USA, and going the other way, the fourth-largest recipient of export capital from America. These statistics underscore the fact that the conditions for investment are...
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