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Federal Councilor Parmelin: “We’re holding intense exploratory talks with the USA”

Preliminary talks between Switzerland and the USA on starting negotiations for a free trade agreement are well underway, says Guy Parmelin, Minister for Economic Affairs, in an interview. Switzerland also aims to further develop the agreement concluded with China in 2014.

Expansion and further development of Switzerland’s network of free trade agreements is a key focus of Federal Councilor Guy Parmelin’s foreign-trade policy.
Expansion and further development of Switzerland’s network of free trade agreements is a key focus of Federal Councilor Guy Parmelin’s foreign-trade policy.

Councilor, what will be your priorities in economic affairs over the next few years?
I’m not aiming to do anything really revolutionary, but rather to improve and optimize existing instruments. Take the corporate tax system, for instance: The go-ahead from the Swiss population in the tax reform referendum on May 19 has brought us the necessary stability in terms of corporate taxation. In other areas, however, we can further improve the framework conditions, for example by dismantling bureaucracy, particularly for SMEs What it boils down to is shaping the framework conditions so that we can preserve the trump cards we have, such as our outstanding education and research system.

What can Swiss exporters expect from your foreign-trade policy?
Switzerland has a well-established network of bilateral free trade agreements. We now need to improve and further expand this network where we believe it is expedient to do so. This applies, of course, to the free trade agreement with China from 2014, and there is a strong commitment on both sides here, but we also want to update the free trade agreement we have with Japan, which is now ten years old. With regard to new free trade agreements, talks are currently underway with the Mercosur states in South America, but also with Asian nations including India, Malaysia and Vietnam. We’re likewise holding intense exploratory talks with the USA about launching negotiations for a free trade agreement.

What improvements need to be made to the free trade agreement with China?
Basically there are various things that can be improved. Criticisms have been raised in the Swiss parliament because state enterprises in China can buy companies here, but it’s not really possible the other way around. We therefore need greater reciprocity for investments. Each free trade agreement has a clause stating that after a certain amount of time the parties will sit down together to discuss what is going well and what isn’t. Switzerland can make use of this clause, but effective implementation of a proposal for improvement requires the agreement of both parties.

The global economy is currently burdened by Brexit, the US-China trade conflict and other political crises. Many exporting Swiss SMEs are showing uncertainty. What would be your advice to them?
A structure like Switzerland Global Enterprise represents an important support for SMEs, particularly in times of uncertainty in global politics and economics. Switzerland can’t control the outcome of international political events such as Brexit, but what we can do is anticipate the individual scenarios early on. We signed a new bilateral agreement with the UK back in February, which will govern our trading relations in the case of a hard Brexit. In the trade dispute between the USA and China, however, it’s very hard for Switzerland to have any direct influence. Here, all we can do is work with other countries to try to bring the two major powers back to the table in the interests of the global economy.

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