Trade Tuesday: Can this latest deal plug the holes in UK-Swiss trade?

By Emily Chen

The meeting between Prime Minister Boris Johnson and Swiss President Ignazio Cassis last week, would indicate that the long-standing UK-Swiss relationship is as strong as ever. The stage has been set for an enhanced Swiss trade deal to be struck in 2022, following the launch of a new trade Consultation on 28 April. The Government wants the deal 'to boost two-way trade between two of the world’s biggest services superpowers’ and looks to break down barriers, opening up access for UK firms to the Swiss market (Source). 

This is welcome news for the services sector which has felt a little left behind in trade discussions more broadly, including Brexit negotiations.   

The UK was the world's second-largest exporter of services in 2020, worth £266bn, while Switzerland was the 12th largest with £89bn (Source).  The bilateral relationship is worth nearly £35bn, and indeed half of that money is attributed to services. Not surprising given both Switzerland and the UK are major financial centres.  

In January 2021, the UK-Switzerland Trade Agreement came into force, taking an ‘umbrella’ approach of governing existing trade relationships between the European Union and Switzerland. Shortly afterwards, Chancellor Rishi Sunak and Federal Councillor Ueli Maurer, raised the importance of a new deal, identifying a need to reduce costs for firms to access the other nations’ markets. Whilst recent successful agreements have covered air transport, migration, social security and police cooperation, it is expected for the new deal to focus on services like insurance, banking, and asset management. This discussion laid the foundations for the consultation happening now. Upon completion, the UK has agreed with Switzerland to open negotiations to enhance trade arrangements.   

The current UK-Switzerland free trade agreement – struck in 2019 - replicates agreements between Switzerland and the EU for the UK. Hence, it is one of the so called “roll-over” deals we have seen publicised on the Department for International Trade website since exiting the EU.  

So, while recent agreements are therefore not a true sign of particular closeness between the UK and Switzerland, the outcome of the Consultation is an opportunity for both economies to build closer ties and boost bilateral relations as negotiation rounds happen this year.  

If you have any questions about how this might impact on your business; or would like help responding to the Consultation (open until 22 June), contact trade@secnewgate.co.uk