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Q&A with Ambassador Ivo Germann Head of the Foreign Economic Affairs Directorate at SECO
What measures is the Swiss government taking to support businesses in expanding their economic ties with the UK?
IG: The good performance of UK-Swiss trade relations is not least the result of immediate government action to ensure a smooth regulatory transition after Brexit. Early on, the Federal Council adopted a "Mind the Gap" strategy, which enabled Switzerland to sign a roll-over trade agreement, a temporary services mobility agreement and many other agreements with the UK immediately after Brexit. Now, under "Mind the Gap Plus", we want to go beyond a simple preservation of the relations and further improve the framework for bilateral economic cooperation. The main milestones of this strategy are the MoU on Science and Innovation, signed in 2022, and the Berne Financial Services Agreement (BFSA), signed in 2023, which is still subject to approval by the Swiss parliament.
The BFSA is a first in kind agreement that aims at establishing a proof of concept and blue print for an open and outcomes based regulatory cooperation between like-minded countries. A third milestone still to be achieved is a new, comprehensive and ambitious free trade agreement. Negotiations were launched between the respective trade ministers in May 2023. The negotiation process for this FTA is ongoing. We have made good progress so far. The negotiations cover more than 20 topics and focus on those not yet covered by the existing trade agreement, such as services, mobility, digital trade, intellectual property or trade and sustainable development.
In light of these recent and upcoming bilateral agreements, how do you see the trade relationship between the UK and Switzerland evolving now and in the coming years?
IG: Given the strong common interest in creating the most favourable conditions for bilateral economic relations, I'm confident that the positive trade dynamics we see today are sustainable and have a potential to grow even further. In particular, bilateral trade in services, at CHF 26.5 billion in 2023, has never been as high and is likely to peak again in 2024. The total is well distributed and balanced between the two partners. The UK is Switzerland's third largest trading partner in services, accounting for 8.2% of Switzerland's global trade in services. Bilateral trade in goods, amounting to 12.3 billion Swiss francs in 2023, has seen more challenges and less growth compared to services.
This said, with an export volume of 8.5 billion Swiss francs, the UK remains our seventh most important export destination. We would like to see the UK re-join the so-called Pan-Euro-Mediterranean (PEM) Convention to facilitate Rules of Origin between our countries and towards the EU.
These impressive trade figures are supported by high levels of investment in both directions. In 2022, Switzerland's FDI stock in the UK was 60 billion Swiss francs, while the UK's FDI stock in Switzerland was 44 billion Swiss francs.
Are there specific areas or industries where you foresee opportunities for deeper collaboration and partnership between the UK and Switzerland?
IG: The UK is an attractive export market and business location for Swiss companies. They see particular opportunities in the areas of financial and professional services, ICT, AI and fintech, biotechnology, medical technology or digital health, cleantech or sustainable finance, mechanical engineering and aerospace. Switzerland supports companies in these and other areas with well-established instruments and promotion agencies. The key player for Switzerland is the Swiss Embassy in London. Focussing on innovation and sustainability, it organises various activities and events dedicated to the above-mentioned priority sectors, both in London and in the regions. The Swiss Business Hub in London is particularly important for business development. It interacts closely with the Swiss Embassy in London and represents Switzerland Global Enterprise (S-GE), the official Swiss organisation for export and investment promotion. It helps Swiss SMEs to export their goods and services to the UK, and provides information to UK-based companies about Switzerland as a business location. I saw the recent Interview with Michael Kühn from S-GE with BSCC that explains and complements the Team Switzerland approach very well.
Other important actors for the promotion of UK-Swiss business ties of course include yourself at the British Swiss Chamber of Commerce (BSCC) and the umbrella association of Swiss businesses, economiesuisse, which partners with its British sister federation, the Confederation of British Industry, on the UK-Swiss Bilateral Trade an Investment Council.
These many contacts and exchanges reflect the strong partnership between our two countries, which share the same fundamental values and significant economic and trade interests, and create excellent conditions for further deepening our economic relations.
