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How free trade agreements benefit Switzerland

In order to simplify international trade, Switzerland has concluded free trade agreements with partner countries. But how do these agreements benefit the Swiss economy? The Bakbasel research institute has evaluated this on behalf of the Parliamentary Administration Control. The report has now been published. 

The effects of free trade agreements are difficult to assess

The result of the evaluation shows that the federal government has only limited information regarding the effects of free trade agreements. Once an agreement is in force, the results are not systematically monitored.
Accordingly, there are only a few demonstrable direct effects. Overall, it can be said that the pharmaceutical, chemical, watch manufacture, mechanical engineering and measurement technology industries in particular benefit from free trade agreements. However, it is the business cycle that is usually decisive in the development of exports.

Joint committees are responsible for reviewing free trade agreements. These committees are assembled together with the partner countries; the composition varies according to topic. The Parliamentary Administration Control’s evaluation is critical of the joint committees’ activities in that they are not very transparent. There is no institutionalized and systematic reporting. 

Nevertheless, the evaluation stresses that, in recent years, free trade agreements have become increasingly important in foreign trade policy. It is important to bear in mind that the creation of legal certainty in trade relations is an important objective of the agreements. The Federal Council is also keen to remove disadvantages for Swiss exporters on the international market.

On the basis of the evaluation, the National Council’s Audit Committee considers free trade agreements to be an important tool for Swiss foreign trade. Nonetheless, it does see some room for improvement. According to the Audit Committee, the Federal Council must have the best possible information bases for assessing whether a free trade agreement should be concluded or not. Sustainability studies must therefore also be carried out in advance.

The Parliamentary Administration Control was commissioned to carry out an evaluation by the Federal Council’s Audit Committee.

If you have questions about free trade agreements, please contact one of our consultants. We can support you with our expertise and network.

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