Swiss work on improving US economic relations

Keystone

Economics Minister Doris Leuthard says a forum set up last year to boost trade ties between Switzerland and the United States makes good sense.

Although both countries have decided not to proceed with a free-trade agreement, Leuthard told swissinfo that the joint forum enabled constructive discussions.

A year after the idea of an accord was dumped because of disagreements over terms of negotiation, the economics minister met US Trade Representative Susan Schwab at the World Economic Forum summit in Davos on Thursday.

swissinfo: How far has the joint forum progressed?

Doris Leuthard: The forum was set up in May. We are still in the initial phase of talks. During my visit to Washington in December, we agreed on three themes that we are now discussing: electronic commerce, intellectual property and some agricultural sectors. Hopefully we will see some concrete results this year.

swissinfo: Do we have any idea of the forum’s impact on Switzerland?

D.L.: The United States is among the biggest foreign investors in Switzerland. With the forum, we are in touch constantly with the Americans. That means we can discuss problems faced by companies on both sides of the Atlantic and have a real impact.

swissinfo: And what is the real impact on investments and exchanges?

D.L.: It’s very difficult to say. When a US company sets up shop in Switzerland, it’s difficult to say the forum played a role in its decision. But entrepreneurs have told us that political contacts at the highest level help solve certain problems. It can even make a difference when a company decides to move to either country.

What we can measure are new jobs, and figures so far are encouraging. It shows that the forum is useful in helping improve economic conditions.

swissinfo: Aren’t Switzerland and the US simply slowly progressing towards a free-trade agreement?

D.L.: The government has taken its decision [not to sign a free-trade accord]. We cannot change that. I am concentrating on the forum. We have listened to firms who were against an accord, but we still have plenty in common with the United States. With no agreement, some sectors of our economy cannot develop. That’s why I am working sector by sector.

swissinfo: Will the new Democrat majority in Congress influence economic relations between Switzerland and the United States?

D.L.: It’s hard to say. In December I was able to talk to a number of new members of Congress. Generally speaking, the Democrats aren’t particularly interested in multilateral ties, but rather in standards [social, environmental and so on].

We want a system that gives us access to a market, an access that is linked to conditions and regulations associated to standards. Our positions are somewhat different, but I hope the Democrats will realise that it is important for the United States to give the rest of the world a positive sign. Multilateralism, as proposed during the Doha round of talks of the World Trade Organization (WTO) [aimed at lowering trade barriers], is tied to a sense of justice and solidarity with developing nations.

swissinfo: On Saturday you will host the first ministerial-level talks of WTO members since the Doha talks broke down last July. What do expect from this meeting?

D.L.: We’ll have a better idea on Saturday [of where future talks are headed.] There will be a lot of pressure on the United States, Brazil, India and the European Union. Switzerland is ready to negotiate, to be flexible. But everyone has to be ready to show some flexibility, otherwise we will be facing the same problems [as when the last negotiations broke down.]

swissinfo-interview: Pierre-François Besson in Davos

Key facts

The United States is Switzerland’s biggest export market after Germany, worth SFr16.1 billion ($12.9 billion) in 2005.
It is also the main destination of Swiss investments abroad – SFr86 billion.
Switzerland is the United States’ 17th biggest export market – SFr10.7 billion.

In brief

In June 2005, the Swiss government announced preparatory talks ahead of a possible free-trade agreement with the United States.

The idea was dropped early last year at least temporarily by both parties, mainly because of disagreements over agricultural subsidies.

But during the 2006 WEF summit in Davos, they announced the creation of a joint forum on trade and investment, officially launched last May.

The forum is supposed to discuss specific issues and promote cooperation between the two countries.