With 77 partners, Switzerland’s Free Trade Agreements (FTAs) cover 55 percent of the world market. Despite the large number, much remains uncovered. Where is there further potential?
Worthwhile deals involve countries whose GDP exceeds $250 billion and which show a compound annual growth rate of more than 2 percent over the past ten years. Of the 32 states meeting the criteria, Switzerland already has FTAs with well over half. That leaves 15 possibilities, together responsible for 30 percent of the world market. Switzerland is already in talks with six of them.
However, some talks have stalled. Discussions with the Russia-Belarus-Kazakhstan Customs Union (EAEU) have been put on hold due to international legal concerns over Russia’s annexation of the Crimea. And negotiations with India are stymied by unresolved intellectual property rights issues.
Two attempts at an agreement with the USA have already failed. The Swiss agricultural sector hindered the start of official negotiations in 2006. Although a deeper free trade agreement would clearly benefit both sides, attempts to resume negotiations stumbled again in 2019.
High potential in Asia and Africa
But there are opportunities elsewhere. Of the former “Tiger states,” deals are still pending with Thailand, Malaysia and Taiwan. Although entering negotiations with Taiwan is politically sensitive, a deal could prove very promising.
In Africa, there is great untapped potential in Nigeria. Various African customs unions, such as the West African (Waemu), Central African (Cemac), or East African (EAC) alliances offer longer term opportunities to access emerging markets. The nascent AfCFTA trade area, encompassing 55 African states, should also be explored, as large parts of Africa remain blank on the Swiss free trade map.
Never forget the Middle East
Iraq, with its enormous economic potential, counts as a possible partner. The humanitarian aid already initiated by Switzerland would be a good starting point to deepen bilateral relations. Nevertheless, Switzerland’s foreign minister Ignazio Cassis did not seize the chance to initiate, or even mention, a free trade agreement during his last trip to Iraq. An agreement would also create additional opportunities for regular exchanges.
For a flourishing economy, Switzerland needs new economic agreements, and the necessary steps s must be taken in both foreign and domestic policy.