Kemi Badenoch will fly to Switzerland on Monday to talk with her Swiss counterpart about a new post-Brexit trade deal, describing the two countries as “natural trading partners”.
The business and trade secretary will meet Guy Parmelin in Bern to discuss a “modern” free trade agreement (FTA) between the UK and Switzerland that would boost trade between two “services superpowers”, she said.
“A great prize is on offer for both the UK and Switzerland in updating our business relationship to reflect the strength of our companies working in areas ranging from finance and legal to accounting and architecture,” Badenoch said ahead of talks at the Federal Palace. from Switzerland
“The UK and Switzerland are natural trading partners and today’s launch will build on our strengths as services superpowers, while driving investment in emerging technologies, data innovation and digital commerce.”
The government is eager to forge new trade relationships in the wake of Brexit, and most recently joined the 11-member Asia-Pacific trading bloc, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which includes Japan and Australia.
Switzerland, one of the richest countries in the world, is already the UK’s 10th largest trading partner, accounting for 3.1% of its trade in 2022. Total trade in goods and services (exports plus imports) between the UK Kingdom and Switzerland was almost £53 billion last year, £13 billion more than in 2021, according to the department for business and commerce.
William Bain, head of trade policy at the British Chamber of Commerce, described the Swiss talks as “one of the most important sets of trade negotiations the UK government has launched in the post-Brexit era.”
“The 2021 post-Brexit rollover deal only replaced the terms of trade for goods but not for services, so there has been a huge gap to fill affecting just under half of our trade with Switzerland,” he said. “We also need to make permanent the temporary service business travel and labor mobility rules agreed upon last year.”
The UK runs a trade surplus with Switzerland with a breakdown showing exports totaling £33.3bn and imports £19.5bn. Of all UK exports to Switzerland in 2022, £18.5bn (55%) were goods, including gold, art and medicines, while £14.9bn were services, of which two-thirds They were commercial and financial.
The current FTA is based on an EU-Switzerland agreement negotiated more than 50 years ago and does not cover services, investment, digital or data. With almost 70% of UK service exports to Switzerland being delivered electronically, both parties are said to be interested in a modernized deal.
Chris Hayward, policy chairman for the City of London Corporation, said the UK and Switzerland are Europe’s two biggest financial centers and “strengthening our services business relationship is a top priority.” The agreement needed to address key issues such as mobility, data flows and digital commerce for the “benefit of both jurisdictions,” he said.
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Talks will formally start next week with lower tariffs – red meat and chocolate are among British products attracting high import duties – also on the government’s list along with simpler customs procedures and better regulatory cooperation.
Naomi Smith, chief executive of campaign group Best for Britain, said closer ties with Switzerland would not replace trade lost after Brexit: “The government should prioritize removing new barriers to trade with our biggest trading partners in Europe , which continues to cost jobs and stunt growth.”
Nick Thomas-Symonds, shadow secretary of state for international trade, added that when it came to trade, the government was “big on promises and appallingly short on delivery”.
“Of course, it is important to deepen trade ties with allies like Switzerland,” he said. “However, the government promised agreements signed with the US and India by the end of 2022, none have been fulfilled and it seems increasingly distant. Not surprisingly, the OBR forecasts that UK exports will fall by 6.6% in 2023, a hit of more than £51bn on the economy.
