Switzerland is known for many things: chocolate, cheese, watches, banking, and of course multifunction army knives. Not surprisingly, what these Swiss items have in common is high quality.
Well, here is another thing that Switzerland may be recognized for: free trade.
Switzerland certainly makes for an attractive trading partner. It boasts an adaptive free market economy admired for its openness, regulatory efficiency, and respect for the rule of law.
It’s a willing trade partner, too. Switzerland’s strategic pursuit of trade deals around the globe has netted it free trade agreements with more than 70 countries, including all 28 European Union member states, as well as China and Japan. Having inked a pact with Indonesia last December, Switzerland is back in the market for its next trade deal.
Oddly enough, there is no free trade pact between the U.S. and Switzerland currently in place. And that’s too bad. Switzerland’s strong commitment to free-market capitalism makes the country an ideal partner for an America seeking to deepen “economic relationships rooted in fairness, reciprocity, and faithful adherence to the rules.”
Switzerland and the United States are no strangers to mutually beneficial arrangements. The two nations already have strong economic and business ties. As Switzerland’s largest trading partner outside of the European Union, the United States has a roughly balanced exchange of goods and services with the Alpine country, which amounts to some $100 billion annually.
American and Swiss companies produce cutting-edge pharmaceuticals, aerospace components, machinery, and other advanced equipment. Switzerland boasts a sophisticated service sector that accounts for roughly 75 percent of its gross domestic product (vs. less than 1 percent from agriculture). This makes Switzerland an exceptionally attractive partner for an advanced trade agreement.
Going beyond the recently signed apprenticeship accord, the shared values of the United States and Switzerland make the two countries natural, forward-looking economic partners. Pursuing a U.S.-Swiss free trade agreement, in effect, would serve as a strategic opening move and pragmatic building block for advancing the administration’s trade agenda of bringing forward “a fairer and more efficient global economy.”
In his recent trip to Washington where he had constructive discussions with Secretary of State Mike Pompeo and national security adviser John Bolton, Swiss Foreign Affairs Minister Ignazio Cassis pointed out that both sides clearly desire a bilateral free trade agreement. The question is no longer if, but when the two countries can move it forward.
What’s needed now is a formal, market-opening agreement. The Trump administration should prioritize its pursuit of a trade and investment pact with Switzerland. The fact that the two economies have flourished on the foundation of market principles should make it far easier to conclude an agreement with Switzerland than with other nations already engaged in negotiations.
Memo to Bern and Washington: You have a unique opportunity to form a free trade partnership that would benefit both your economies.
Edwin Feulner is founder of the Heritage Foundation