How some EU states harm Swiss interests

EU and Swiss flags fly in the wind in Zurich Keystone

European Union member states and the EU commission have taken 200 measures that have harmed the Swiss economy since the beginning of the economic crisis in 2008, a study has found.

However, 37 measures were however found to be favourable, according to the study, conducted by the University of St Gallen’s Global Trade AlertExternal link. By October 2016, 151 of the harmful measures and 23 of the beneficial ones were still in effect, revealed the Swiss public radio SRF programme RendezvousExternal link on Friday.

The study, led by Simon EvenettExternal link, professor of International Trade and Economic Development at the university, was recently publishedExternal link in the State Secretariat for Economic Affairs (Seco)’s economics magazine Die Volkswirtschaft.

In terms of the 200 measures, Evenett told SRF that “none of those measures directly target Switzerland. Many of them are collateral damage or knock on effects from measures that these European governments have taken to try and stabilise their economies”.

He added most were bailouts and state subsidies. And the harmful measures have been accumulating much faster of late. This is despite the EU having agreed in several international agreements not to undertake such measures.

Switzerland is not a member of the 28-bloc EU, but does have numerous bilateral agreements with the body. The EU is also its main trading partner.

Swiss neighbours

The countries at the top of the list for harmful measures were Swiss neighbours and larger EU members Germany, France and Italy.

The study estimated that one Swiss franc in seven of Swiss exports to the EU faced a trade distortion of one form or another. This was the equivalent of CHF17 billion ($17 billion).

Bilateral agreements cover many areas, Evenett said, but “that does not necessarily mean that they are as effective as one might think”.

Switzerland should therefore be thinking about how best to represent its interests to EU member states to lower or to eliminate these trade distortions and to ensure that these types of measures are not put in place in the future, he explained.

How to react

Switzerland can react in different ways: bilaterally by advocating better policies with different states within the EU and internationally by advocating at organizations like the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO), in particular by taking a lead in promoting new international trade disciplines, Evenett suggested.

According to SRF, Seco, in an afterword to the article in its magazine, called the study’s results “very important”. The data from the Global Trade Alert, the Seco expert writes, would allow for intervention at EU and member-state level.