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The UK Trade Secretary has launched negotiations for a new UK-Switzerland FTA (free trade agreement). Mrs. Kemi Badenoch aims to boost trade activities between the two countries. Generally, Switzerland is Britain’s 10th largest trading partner and is one of the world’s wealthiest nations. The two countries account for services worth about £15 billion annually, including architecture, legal, professional, and financial. Thus, Switzerland and the UK are among the leading service economies worldwide.
The current free trade agreement between the UK and Switzerland relies on a 50-year-old deal between the European Union and Switzerland. In other words, the agreement does not cover data, digital & investment services since it came before the advent of the internet and home computer. A 2020 research indicates that almost 69% of Switzerland and UK deals occur electronically. Therefore, the two sides seek to rectify their agreements through the upcoming talks.
Meanwhile, ONS data indicates that the UK services sector experienced record-high exports in 2022 of about £397 billion. The increase marked about a 20% rise from the 2020 data. UK Business & Trade Secretary will likely initiate talks for a modernized deal in Bern with Federal Councilor Guy Parmelin. Mrs. Kemi will also visit SIX, the Switzerland Exchange operator. SIX is one of the top post-trade service providers and the 3rd largest stock exchange worldwide.
In addition, she will also visit Tenity, an innovation accelerator, where she will hold meetings with Jrny, SmartPurse, Xworks, and Enterprise Bot. Discussing a new trade deal between the countries will likely boost Britain’s growing service-focused industry. Other benefits it will also bear include enabling United Kingdom companies to compete with Switzerland, improving regulatory cooperation, and removing market access barriers.
In any case, research indicates that Switzerland's imports might rise by 78% by 2050. A new free trade agreement will lower UK export tariffs and reduce annual tax on UK firms by about £7.4 million. The new deal will benefit over 14,000 firms in the UK that export products to Swiss. Overall, 86% of these firms are medium-sized & small-scale enterprises that will leverage simpler trade rules on digitization, customs procedures, and regulations on product origin.
Swiss is a crucial investment partner for Britain, with direct stock investment in UK sectors like financial services, manufacturing, chemicals, and textiles worth £74 billion by 2021. On the other hand, the United Kingdom’s investment in Switzerland was about £52 billion in 2021. The new free trade agreement will help facilitate more investments between the two countries. Above all, Mrs. Kemi will also meet with top female business leaders, comprising a network of up to 140 Swiss firms dedicated to women's investments.