Free trade talks require watching and waiting

Economics Minister Schneider-Ammann and his Chinese counterpart meet to discuss trade agreements in July 2012 Keystone

After an eighth round of free trade talks with China the head of the Swiss economics ministry has dampened expectations that a deal will be reached soon.

In an interview with the NZZ am Sonntag newspaper, Economics Minister Johann Schneider-Ammann assumed a realistic tone when asked about the progress of free trade talks with China, stating that progress was made in the latest round of talks but that there remain “a few hard nuts to crack”.

“When we ask the Chinese to lower their customs duties, they ask the same from us,” Schneider-Ammann explained. “However, there are barely any duties on Swiss industrial products today, so we are asking the Chinese to take a step without necessarily expecting the same back from us.”

Another sticking point remains China’s human rights record; there, Schneider-Ammann says a “reasonable compromise” must be found, adding that China remains open to negotiation on such issues.

Next steps

After a new Chinese president took over in November 2012, the trade minister with whom Switzerland had been negotiating also changed. Schneider-Ammann says he is confident his new Chinese counterpart will also seek a timely end to the trade negotiations; the two will likely meet when the Swiss economics minister travels to Beijing in July.

A ninth round of Swiss-Chinese trade talks will take place in the coming months, according to Schneider-Ammann, who does not exclude the possibility of further rounds being necessary.

“For me, the speed of negotiations is less important than reaching a fair agreement,” he said. “Even if we come to an agreement in the next few months, we will still need time to formulate all the details…it will be some time before anything is really in effect.”

Meanwhile, across the border

In the meantime, the US and the European Union are in the midst of their own free trade negotiations which could have tough consequences for the competitiveness of Swiss products if an agreement is reached.

“If these big trading partners reach a free trade agreement, we have to make sure our economy isn’t discriminated against,” Schneider-Ammann emphasised, adding that he had registered Swiss concerns on a diplomatic level with both the US and the EU.

When it comes to negotiating its own free trade agreement with the US, Switzerland is in a tough position, and Schneider-Ammann isn’t holding his breath; the Swiss became the first country to cut off free trade talks with the Americans in 2006, largely over the consequences for the agricultural sector.

He stops short of saying cutting of the talks was a mistake but admits it puts the Swiss in a tough position in view of talks between the US and the EU.

“We can’t miss the moment to enter the game if we don’t want to be discriminated against,” he said, adding that “if one is convinced that open markets lead to prosperity, every missed opportunity is regrettable.”