Foreign economic policy in a challenging international environment

Berne, 11.01.2012 - On 11 January 2012 the Federal Council approved the 2011 Foreign Economic Policy Report. The main feature topic, which deals with the current status of foreign economic strategy, discusses the financial, economic and debt crisis and indicates where the Federal Council wishes to focus its attention in the next few years. The Federal Council lays particular emphasis on improving the competitiveness of the Swiss economy in the present challenging international environment. To this end, it is committed to facilitating access to foreign markets. Domestic reforms and autonomous liberalization measures are also regarded as priorities, as are contributions to the economic development of partner countries.

In the main feature topic, the Federal Council undertakes to update the foreign trade strategy it set out in 2004. It intends to maintain its current basic stance while strengthening Switzerland's economic position in the world over the next few years. In so doing it will focus on three main areas: market access abroad and the international regulatory framework, Switzerland's internal market policy, and contributing to the economic development of partner countries. Many events during the year under review resulted in progress in these three areas.

Market access abroad and the international regulatory framework
The Federal Council intends to improve market access and competitiveness in the goods, services and other factor markets. A strong international regulatory framework for foreign trade depends in particular on a strong WTO and a multilateral trading system able to exploit synergies with other international organizations (such as the International Labour Organization [ILO], multilateral environmental agreements, the IMF, World Bank and OECD) in order to achieve a sustainable global economy.

The Doha Round negotiations at the WTO Ministerial Conference in December failed to reach a conclusion. However, Russia's accession was approved. The monitoring of the trade measures introduced by WTO members - a procedure decided on after the onset of the financial crisis - helped to curb the threat of protectionism. The OECD celebrated its 50th anniversary. It aims to assist global growth by means of a number of strategies in the areas of innovation, green growth, and education and training. Furthermore, it intensified its cooperation with the major emerging countries and launched a new framework for a comprehensive development strategy. In the year under review, the OECD Guidelines for Multinational Enterprises were also updated.

Bilateral trade relations between Switzerland and the EU remained almost completely unchanged from the previous year despite the debt and currency crisis. One important reason for this is the good functioning of the existing agreements (including the 1972 free trade agreement and Bilaterals I and II). Progress was made in several areas of cooperation (emissions trading, cooperation with the competition authorities and the European Defence Agency). In other areas, negotiations remained challenging mainly because of unanswered questions on institutional issues. To safeguard the bilateral approach over the long term, the Federal Council pursues a coordinated, comprehensive approach to relations with the EU.

There was also progress on free trade agreements with countries outside the EU. In the year under review, free trade agreements with Colombia and Peru came into force, and agreements were signed with Hong Kong and Montenegro. Negotiations with India and with Bosnia and Herzegovina have reached an advanced stage. Switzerland has commenced negotiations with China and in the context of the European Free Trade Association as well with the Russia-Belarus-Kazakhstan Customs Union (EFTA) and with Indonesia. Similar negotiations are due to begin in 2012 with the Central American countries and Vietnam. Increasing importance is attached to extending the existing agreements, such as in the area of services and in relation to amending agricultural regulations to take account of new practices.

Switzerland's internal market policy
Access to foreign markets has become more difficult in recent years, since in many countries there is a trend towards protectionism. In addition, Switzerland's opportunities to exert an influence on international economic policy decisions are diminishing. The competitiveness of the Swiss economy must therefore also be maintained and improved by means of internal reforms and autonomous liberalization measures. Action in the areas of growth policy, competition policy, agricultural policy and educational policy, among others, should help to cut costs and increase productivity in Switzerland. Such measures are also a prerequisite for continuing to improve access to foreign markets.

Contribution to the economic development in partner countries
The Federal Council is also seeking to integrate the developing countries more closely into the global economy and to promote sustainable economic growth in those countries. Its aim is to help reduce poverty and inequality over the long term and encourage the efficient use of resources in partner countries. This is achieved by promoting trade and the private sector, strengthening economic and financial policy, expanding urban infrastructure and utilities, and taking steps to prevent climate change, protect the environment and guarantee food security.

In the year under review, the Swiss parliament approved three Messages relating to economic cooperation. These refer to increasing and extending framework credits for cooperation with eastern European countries and the Commonwealth of Independent States, capital increases for multilateral development banks, and financing an increase in official development assistance to 0.5% of gross national income by 2015. This year parliament will debate the Message for 2013-2016. This sets out a new strategy for international cooperation and, for the first time, brings together all the framework credits for economic cooperation and transitional assistance (including humanitarian aid).

The main feature topic and the overview of the report are available on the Internet in English.


Address for enquiries

Christian Etter, Head, Special Foreign Economic Service, SECO. Tel. +41 31 324 08 62

Hanspeter Tschäni, Head of International Economic Law Division, SECO. Tel. +41 31 324 08 69



Publisher

The Federal Council
https://www.admin.ch/gov/en/start.html

Federal Department of Economic Affairs, Education and Research
http://www.wbf.admin.ch

https://www.admin.ch/content/gov/en/start/dokumentation/medienmitteilungen.msg-id-42948.html