“In light of the discussion surrounding a possible trade war and rising protectionism in the world, our internationally active companies are faced with a great deal of uncertainty,” says Daniel Küng, CEO of Switzerland Global Enterprise. “The primary aim of this study is to give SMEs some guidance for their export strategies.”
In order to shine a light on the situation facing Swiss companies, the study outlines global trends in trade policy, highlights the circumstances of seven important countries and regions, and reveals the consequences for Swiss companies.
Barriers to trade in the USA growing since 2009
Since 2009 – and therefore a long time before Donald Trump took office – the USA has introduced more than 100 new trade-restricting measures every year. Regardless of this, Swiss exports to the USA have risen to CHF 34 billion today from CHF 22 billion in 2012. It therefore remains to be seen to what extent tariff increases – where these would actually apply to Switzerland – will have a negative impact.
Possible disadvantages in Japan and Mercosur due to new EU agreement
The EU recently signed a free trade agreement with Japan, and media reports suggest that the negotiations with the South American association of states known as Mercosur will soon be concluded. In Japan there may be disadvantages primarily for producers of foodstuffs. In South America the impact remains unclear, but in the most crucial market of Brazil especially, there are frequently high import duties. If these were to be reduced for Swiss firms’ competitors from within the EU, this would represent a significant advantage over the competition. Switzerland is likewise negotiating an agreement with the Mercosur states.
Globalization projects and mega-agreements in the Asia-Pacific region
The “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP) and the “Regional Comprehensive Economic Partnership” (RCEP) have the potential to influence global trade flows over the long term. Exporters need to follow their development closely, since the market access conditions will change and in some areas they will inevitably suffer competitive disadvantages. The two so-called “mega-regionals” show that the signs in the region still point towards trade integration.
China’s “Belt and Road” initiative is also increasingly significant. This huge globalization project aims to create closer links between 65 countries that represent two thirds of the world’s population and more than a third of global GDP. Swiss companies are very well placed in China thanks to a bilateral free trade agreement, and in 2018 they will benefit from a number of new tariff reductions as a result of this.
SMEs: Analyzing individual cases and utilizing opportunities
Daniel Küng comments: “The study by the two experts shows: Exporters should welcome the big headlines but with caution. In individual cases, new agreements in the Asia-Pacific region or in Latin America could perhaps exert greater influence than the tariff policies of the USA or China. At the same time, globalization is continually creating new opportunities. Negotiations are being held for free trade agreements, or trade facilitation measures are coming into force, which could benefit Swiss companies. We advise exporters to analyze what precisely is changing for them on the ground – and to continue to boldly pursue their international business!”