Kemi Badenoch will fly to Switzerland on Monday for talks with her Swiss counterpart on a new post-Brexit trade deal, describing the two countries as “natural trading partners”.
The business and trade secretary met Guy Parmelin in Berne to discuss a “modern” UK-Switzerland free trade agreement (FTA) that would boost trade between the two “services superpowers”, he said .
“There is a huge prize to be offered to the UK and Switzerland by updating our trade relationship to reflect the strength of our companies working in areas from finance and legal, to accountancy and architecture,” said by Badenoch before the talks at the Federal Palace in Switzerland.
“The UK and Switzerland are natural trading partners and today’s launch will play to our strengths as services superpowers, while also increasing investment in new technologies, data innovation and digital trade.”
The government wants to forge new trade ties after Brexit and most recently joined the 11-member Asia-Pacific trade bloc – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – which includes Japan and Australia.
Switzerland, one of the world’s richest countries, is already the UK’s 10th largest trading partner, accounting for 3.1% of its trade in 2022. Total trade in goods and services ( exports plus imports) between the UK and Switzerland was almost £53bn last year, rising to £13bn by 2021, according to the department for business and trade.
William Bain, head of trade policy at the British Chambers of Commerce, described the Swiss talks as “one of the most important sets of negotiations for business launched by the UK government in the post-Brexit era”.
“The 2021 continuity agreement post-Brexit only operates in terms of trade in goods but not services, so there is a huge gap to fill that affects less than half of our trade with Switzerland,” he said. “We also need to make permanent the temporary labor mobility service and business travel rules agreed last year.”
The UK runs a trade surplus with Switzerland with a breakdown showing exports worth £33.3bn and imports £19.5bn. Of all UK exports to Switzerland in 2022, £18.5bn (55%) were goods, including gold, works of art and medicine, while £14.9bn were services, of which two-thirds were business and financial. .
The current FTA is based on an EU-Swiss deal brokered more than 50 years ago and does not cover services, investment, digital or data. With almost 70% of UK services exported to Switzerland delivered electronically both sides are said to want a modern agreement.
Chris Hayward, policy chair of the City of London Corporation, said that the UK and Switzerland are the two largest financial centers in Europe and “strengthening our business services relationship is a key first priority”. The agreement is needed to address key issues including mobility, data flow and digital trade to the “benefit of both jurisdictions”, he said.
Talks formally start next week with lower tariffs (red meat and chocolate are among the British products that attract high import duties) also on the government’s list along with simpler customs procedure and development of regulatory cooperation.
Naomi Smith, chief executive of campaign group Best for Britain, said closer ties with Switzerland would not replace lost trade after Brexit: “The government must prioritize removing new barriers to trade with our largest European trading partners continues to cost jobs and stunt growth.”
Nick Thomas-Symonds, shadow secretary of state for international trade, added that when it came to trade the government was “big on promises and very under-delivering”.
“Of course, it is important to deepen trade links with allies like Switzerland,” he said. “However, the government has promised to sign agreements with the USA and India by the end of 2022, neither has delivered and is looking that far. No wonder the OBR predicts that UK exports will fall by 6.6% in 2023 , a hit of over £51bn to the economy.