‘As a financial centre Switzerland is a small major power’

Michael Ambühl: concentration and clear goals are key Keystone

Speaking before the United Nations, Swiss President Ueli Maurer denounced the pressure put on small countries by big ones. Michael Ambühl, former Secretary of State and negotiations strategist par excellence, puts things into perspective.

Ambühl, who negotiated the Bilateral II treaty with the EU, the tax deals with Great Britain and Austria, the tax agreement rejected by the German parliament, and the FATCA agreement and bank deals with the US, tells swissinfo.ch that in fact, small countries have some leeway in negotiations with major powers.

swissinfo.ch: Based on your experience, do you agree with Swiss President Ueli Maurer’s assertion that small countries are steamrollered by big powers?

Michael Ambühl: Naturally, the big countries have more influence and weight, as well as more opportunities to exert pressure politically. And when a small country negotiates with a big one it can certainly lead to a sort of “David-versus-Goliath situation”. This doesn’t have to turn out badly, though; if you negotiate as wisely as David you can still achieve good results.

swissinfo.ch: Which countries have the greatest amount of influence and weight?

M.A.: That depends on political and institutional factors, as well as on the economic and geographic size, military power, and finally the technical know-how in a range of fields. If a country has weight in several areas, then naturally it has a big say in international politics, whereas a country with weight in only one or none of these areas has less influence.

Michael Ambühl

The 62-year-old studied applied mathematics and industrial engineering at the Swiss Federal Institute of Technology in Zurich (ETHZ) and served in the Swiss diplomatic corps from 1982 to 2013.

Beginning in 1992, after a variety of foreign posts, he was a counsellor to the EU mission and served as a member of the negotiating delegation for the Bilateral I agreement.
 
In 1999 the Cabinet appointed him head of the Federal Integration Office. In this post he was responsible for negotiations over the Bilateral II agreement.
 
In 2005 Ambühl was named State Secretary in the Foreign Affairs Ministry. Among other things he oversaw negotiations between Switzerland and the United States in the settlement of the UBS tax scandal of 2009.

In March 2010 he took over the newly created post of Swiss State Secretary for International Financial Matters, and moved from the Foreign Affairs ministry to the Finance ministry. In this position he was responsible for the negotiation of a variety of tax and banking agreements.

In September 2013 he left the government to become a professor of negotiation and conflict management at the ETHZ.

swissinfo.ch: How influential is Switzerland?

M.A.: If we look at what’s going on politically at the moment in the world, then we have to accept that logically, Switzerland is not going to be a major player.

If we look, however, at areas in which Switzerland is an experienced leader – such as human rights, peace negotiations, good offices, rights of participation, or federalism – then Switzerland is absolutely recognised. Kofi Annan, a former Secretary General of the United Nations, once said, “Switzerland punches above its weight”.

And in questions of finance, Switzerland is one of the important players – and could even be considered a small superpower. Zurich and Geneva play in the upper leagues with New York, London, Singapore and Hong Kong.

swissinfo.ch: How and where does Switzerland have an influence?

M.A.: On the one hand, in the abovementioned areas where it is a leader. Here it can develop initiatives, lay ideas on the table, and take part in multilateral committees.  

And on the other hand, naturally, on issues by which we are directly affected. Here we have to represent our own national interests, based on whether the effort is worth it.

Fighting against international standards, such as the OECD [Organisation for Economic Co-operation and Development] rules regarding official assistance in financial matters, doesn’t make much sense.

In terms of future rules – such as the concrete form to be taken by information exchange – it makes sense to be actively involved in the relevant committees, instead of waiting and then adopting whatever has been decided upon by someone else.

swissinfo.ch: In recent years you have overseen a variety of negotiations, such as with the US over the tax dispute. Was Switzerland at a disadvantage in the negotiation of the bank deal?

M.A.: In that case we were definitely dealing with a major player. The negotiations were certainly not easy and they lasted a long time. For us it was all about important constitutional principles. We had to prevent our economic players from being forced to violate Swiss laws by another state.

With time, the Americans understood that. They naturally wanted the same – that their legal system would be respected and that their taxpayers would pay their taxes as required.  We’ve now reached an agreement which complies with the laws of both jurisdictions and requires that all people who may have broken American laws be called to task – without tarnishing Swiss law.

Michael Ambühl

This means that Switzerland has to appear as a responsible partner and must show that it’s not just ‘cherry picking’, but rather takes its role as a member of the European community seriously.

swissinfo.ch: Moving on to another major power with which Switzerland has dealings: the EU. You were at the forefront of the negotiations of the bilateral treaties. Were the dealings with Brussels as difficult as those with the US?

M.A.: There are differences between these two major players. The US wanted to enforce their laws. It was about the principle.

The EU is an association of 28 states, and in Brussels the commission has to negotiate daily in order to achieve common rules, whether it has to do with meat or the weight of trucks or labour laws.

The EU has a slightly different way of thinking. As a negotiating partner it’s more sensitive to balance and more committed to solidarity. This means that Switzerland has to appear as a responsible partner and must show that it’s not just “cherry picking”, but rather takes its role as a member of the European community seriously. That’s important.

swissinfo.ch: To what extent do developing nations like China, India or Brazil change the geopolitical landscape? And does this development have repercussions for Switzerland?

M.A.: In the time of the Cold War the world had two poles: Washington and Moscow. After the fall of the Berlin Wall the world was described as monopolar, dominated by the US. Today the world is multipolar again – and with important countries such as China, India or Brazil it will become even more so.

Switzerland does well to acknowledge this development and not to make the mistake of concentrating only on one or two partners. The government therefore pursues a policy of strategic alliances.  It was also a major achievement that Switzerland was the first continental European country to sign a free trade agreement with China. The design of good partnerships with all these countries is important in this increasingly complex, multipolar world.

Michael Ambühl

There’s no patent remedy. Every negotiation is unique, and often the subject, partner and circumstances are, too.

swissinfo.ch: You’ve been a professor of negotiation and conflict management at the ETH [Swiss Federal Institute of Technology in Zurich] since September. Are there any recipes or strategies to help small players negotiate successfully with big ones?

M.A.: There’s no patent remedy. Every negotiation is unique, and often the subject, partner and circumstances are, too. What’s important is that a country like Switzerland tries to define exactly which positions and standards it wants to support.

Once you have decided to become involved – for example with the US dossier – you have do it actively. You have to make an effort to argue with facts, and try to base the negotiations on objective principles. If you set up the negotiations on a technical basis you have a better chance of finding a solution.

swissinfo.ch: Does it matter whether you like your negotiation partners?

M.A.: No, that shouldn’t play a role, but of course it’s more pleasant if you find the other side likeable. What’s important is that on a professional level you have a good rapport. Because at some point comes the moment when you have to sit together and say: “Now we’ve looked at the problem from all angles and we have to identify where you can give a little and where we can give a little, so that we can make a deal that’s good for both sides.”

(Translated from German by Jeannie Wurz)