The visit of Swiss Prime Minister Ignazio Cassis to London in recent weeks has kick-started the first consultations for a free trade agreement between the UK and Switzerland.

The eight-weeks consultations are the prerequisite for negotiations which, once formalised, will offer significant opportunities to companies in both countries.

What are the goals of the future agreement? Which sectors could benefit most from it?

Exports of financial services from UK to Switzerland

The need for an update

Switzerland and the United Kingdom are linked by strong economic ties.

With bilateral trade worth nearly £35 billion annually, the two countries have trade relations in many strategic areas.

However, the current agreements date back to the 1970s and are therefore outdated.

The evolution of the technological landscape requires an updating of the rules so that companies can grow more efficiently.

This is a fundamental principle, especially if we consider the leading position of the UK and Switzerland in services.

In fact, the two countries are respectively the world’s second and twelfth largest net exporters of services. The UK exported more than £266.8 billion in services in 2020, while Switzerland exported £89.6 billion.

The lead is particularly in the financial field, where technology applications have evolved considerably in recent years.

Having an up-to-date framework of rules will facilitate the work of companies, encourage their growth and stimulate the development of strategic partnerships.

Figures from the Department for International Trade (DIT) for 2021 show that 14% of UK exports in services to Switzerland were in the financial services sector.

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The exports of chemical and pharmaceutical products: image of a woman working in a pharmaceutical firm

Not only services: the benefits for the other industries

Simplified customs procedures and reduced duties are among the main objectives of any free trade agreement.

The one between the UK and Switzerland will be no exception.

In fact, the Swiss Confederation absorbs 3.2% of UK-made exported goods; chemical industry in one of the manufacturing sectors in Great Britain that could benefit the most from the agreement.

In 2020, the UK exported £539 million worth of organic chemicals to Switzerland. Added to this are medicines and pharmaceuticals, totalling more than 677 million in 2021.

Another important export item is non-ferrous metals, which accounted for 11.7% of UK exports during the past 12 months.

What strategies should companies develop to take advantage of this scenario?

Growing in the post-Brexit era: the importance of diversification

Brexit marked a new season for the UK.

We are talking about an era where policies in international trade will increasingly play out on bilateral agreements.

In recent months, we have analysed the benefits of a partnership with the Gulf Cooperation Council and the recent free trade agreement between the UK and New Zealand.

The UK government’s strategy demonstrates the importance of a network of partner countries to negotiate specific agreements.

We can apply the same principle to business strategies.

How?

In the light of the agreements we have mentioned, market players will also have to diversify their network of business contacts.

Suppliers, customers, distributors, but also partners for joint ventures: knowing the best ones suited to your goals is essential.

It is for this reason that companies are called upon to explore new areas by identifying the right partners in order to seize the opportunities offered by international markets.