The UK is set to begin negotiations on a new trade deal with Switzerland as trade and business secretary Kemi Badenoch flies to Bern to open talks today (15 May).
Badenoch is set to meet with her opposite number, federal councillor Guy Parmelin, in Bern and discuss how a “services-based” agreement could be formed.
The first round of negotiations is due to start on 22 May.
Pre-internet deal
The Department for Business and Trade (DBT) says that the previous trade deal – a roll-over agreement following Brexit – was based on a pre-internet treaty and gave limited support to services.
According to a government press release, Switzerland is the UK’s tenth largest trading partner and this relationship is worth £53bn in joint trade, with trade in services representing a significant proportion of this.
‘Services superpowers’
Describing the two countries as global “services superpowers”, DBT hopes to remove market access barriers, improve cooperation on regulatory matters and enable “UK firms to compete on an equal footing with Switzerland”.
Badenoch said:
“The UK and Switzerland are natural trading partners and today’s launch will play to our strengths as services superpowers, while also boosting investment in emerging technologies, data innovation, and digital trade.”
She also told City AM that the “potential is limitless” in relation to the potential agreement.
Welcome news
Director general of the Institute of Export & International Trade, Marco Forgione, said:
“We welcome news of this latest trade deal negotiation. UK services are an incredibly important part of UK trade, and a vital cog in the country’s economy.
“Any support for this sector is a welcome step and we look forward to hearing more about how the government hopes to reinforce the status of the UK as a ‘services superpower’ by removing barriers to entry for lawyers, architects and other service traders.”
EU elephant
David Henig, founder of the UK Trade Forum, welcomed the news as “positive” but said that the “elephant outside the room” would be the EU and its regulatory policy, with Switzerland needing to stay close to the trade bloc’s rules in negotiations.
Noting that, “that modern trade barriers are regulatory” in nature, Henig pointed out “that Switzerland prioritises maintaining trade flows with the EU through a plethora of alignment agreements. Also that Switzerland-EU relations are improving again after some recent issues.”
As reported previously by the IOE&IT Daily Update, last month Brussels restarted long-stalled trade negotiations with Bern.
Priorities
Chris Hayward, policy chair of the City of London Corporation, told the Guardian that “strengthening our services trade relationship is a top priority”.
He added that any agreement would need to address common services issues such as mobility, data flows and digital trade.
DBT also hopes that the deal will help traders in other areas, as the Times reports that potential tariff reductions could save UK businesses over £7.2m in annual duties.
