News

TTIP: Consequences for Swiss exporters

TTIP is not off the table yet! If the TTIP agreement between the EU and the USA is concluded, certain Swiss industries may experience disadvantages, while others are likely to be less affected. These are the results of a recent study based on an analysis of customs data and commissioned by Switzerland Global Enterprise (S-GE).
Customs documents for using a free trade agreement
TTIP will have various effects on exporters

The effects of a possible Transatlantic Trade and Investment Partnership (TTIP), whose conclusion and content are still open after the presidential elections in the USA, would vary greatly for Swiss exporters, depending on their product category. “Small and medium-sized exporters in particular would likely face more intense competition from the EU on the US market. Most of them are active in sectors that still pay customs duties that might no longer apply to their European competitors if the TTIP agreement comes into effect,” commented Daniel Küng, CEO of Switzerland Global Enterprise.

At least 25% of Swiss exports to the USA are still subject to customs duties. This includes MEM and precision products such as machinery, motors, and generators as well as vehicles, watches, textiles, and chemical products. Among the food manufacturers, exporters still pay customs duties on cheese, certain food preparations, chocolate, and confectionery products. Many other products with lower export volumes, such as shoes, rubber and glass products, lamps, and sports and leisure equipment, are also affected. If Swiss companies no longer had to pay these customs duties, for example, in the event of the conclusion of a free trade agreement between Switzerland and the USA, or if Switzerland were to join TTIP, the study estimates the savings potential would exceed USD 222 million annually.

Concluding the TTIP agreement is likely to have only a limited impact on 63% of Swiss exports to the USA since the USA currently does not levy customs duties on them. Due to an agreement from the World Trade Organization, this applies in particular to pharmaceutical products, which account for 37% of Swiss exports to the USA. Other Swiss chemical products, on the other hand, are still subject to customs duties.

SMEs: Review market strategies

“We advise SMEs to review their own market strategies and competitive situation and, if necessary, to adapt them as soon as an agreement has been signed and it becomes clear how Switzerland will respond to it,” said Daniel Küng. The manufacturers of machinery, vehicles, instruments, and industrial textiles, for example, would have to compete more intensively with their German competitors. The chemical industry would face intensified competition, especially from companies based in Ireland and Germany. Chocolate and confectionery producers would have to look increasingly to Belgium, Germany, France, Spain, and the Netherlands. If the Trans-Pacific Partnership (TTP), which has already been signed, also comes into effect, the Swiss would also have competitors from the Far East who would have privileged access to the US market.

Furthermore, Swiss suppliers could be at a disadvantage if strict rules of origin are stipulated in the TTIP agreement. European buyers would be more likely to favor EU suppliers. In this case, it would be easier for them to prove an EU origin – and thus benefit from customs exemptions under the TTIP agreement – than install Swiss parts.

About the study

The analyses were carried out by Prof. Dr. Patrick Ziltener from the University of Zurich on behalf of Switzerland Global Enterprise and based on data from UNCOMTRADE 2015. The consequences of any regulatory harmonization between the US and the EU are not considered.

Documents

Recommend us

Related Content

Premium Partner

Strategic partners

Institutional partner

Official program