Swissmem shows support for business lobby group

Keystone

Switzerland's engineering sector ended a year-long row with the Swiss Business Federation, economiesuisse, by pledging full allegiance to the lobby group on Monday.

The sector’s umbrella body, Swissmem, denied the rift was ever about Switzerland’s parallel import ban. It said it was happy with cost-cutting and improved transparency at the federation.

Swissmem was among several economiesuisse members that threatened to leave early last year but softened its stance last November in return for a greater say within the federation.

The threats coincided with economiesuisse’s repeated support last April for a ban on parallel imports into Switzerland that favours the pharmaceutical industry at the expense of manufacturers.

Parallel importing is the practice of buying goods abroad at cheaper prices than in Switzerland and then undercutting the home market when those goods are sold on to consumers. The ban has been blamed in some quarters for keeping Swiss prices higher than in neighbouring countries.

But Swissmem President Johann Schneider-Ammann told swissinfo that the issue had never been at the heart of its dispute with the federation.

“Over the past couple of months Swissmem has gained more influence within economiesuisse regarding issues that are crucial for our industry, such as energy and innovation. A more transparent negotiation procedure now exists between different industry segments,” he said.

Public storm

In addition, Swissmem succeeded in reducing its membership contributions to the federation by ten per cent, now paying around SFr3.6 million ($2.99 million) a year compared with SFr4 million, with the prospect of further reductions in later years.

Economiesuisse President Gerold Bührer said the organisation is stronger thanks to Swissmem withdrawing its threat to leave once and for all. The federation launched a new strategy at the start of the year aimed at cutting costs, increasing transparency and focusing more on key issues.

“Last year, without doubt, economiesuisse endured a public storm. But storms can also have a clearing effect and we can take great satisfaction that we can quickly and effectively seal our strategy process,” he said.

Last week Swissmem surprisingly announced its support for the continued ban on parallel imports for patent-protected goods. Schneider-Ammann explained that the organisation wants them lifted in the long term, but only when the conditions are right.

“Parallel imports are fine as long as they are based on reciprocity with the European Union. As long as the EU as a bloc has restrictions it is normal that the Swiss do the same,” he told swissinfo.

Pirate threat

“We still hope for a lifting of the ban as soon as possible because it would bring down costs in Switzerland. But the time is not right at the moment.”

The issue has been hotly debated by the Swiss parliament this year with a number of changes to the current law being proposed.

These include allowing the agricultural sector to import cheaper products into Switzerland and reducing the time products can stay under patent protection.

Opponents of allowing such imports say they will damage innovation in Switzerland and open the country up to pirated copycat goods manufactured in other nations.

swissinfo, Matthew Allen in Zurich

Key facts

The Swiss Business Federation was created through the merger in 2000 of the Swiss Trade and Industry Association and the economic promotion organisation.
Since its creation, it has attracted more than 30 new members, including Microsoft, IBM and the SWX Swiss Exchange.
The federation plays an important role in the Swiss economy by representing the views of its members to the government and to the public.
Economiesuisse has pledged to trim its annual budget by 25% to SFr13.1 million ($10.89 million) by 2008, with the possibility of further savings in future years.

Year of discontent

The dispute between economiesuisse and certain members erupted in the spring of 2006.

It centred on membership costs, transparency and the balance of power between members of the lobby group.

Economiesuisse’s continued support of a parallel imports ban and its official position on the open market were also thought to have contributed to the row. Those views were seen as favouring the interests of the powerful finance and pharmaceutical industries to the detriment of other members.

Several other members also threatened to leave or were highly critical of the organisation. The Swiss Master Builders’ Association said it would not renew membership but was later persuaded to stay. And the aluminium industry’s umbrella group opted to sever ties with the federation.