Switzerland Expands Free Trade Network Despite Doubts

(MENAFN- Swissinfo) Switzerland is taking its tally of free trade agreements (FTAs) up to 37 with new economic deals being signed with Thailand and Kosovo. But not everyone is happy about the Thailand deal.

When not covering fintech, cryptocurrencies, blockchain, banks and trade, swissinfo's business correspondent can be found playing cricket on various grounds in Switzerland - including the frozen lake of St Moritz.

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Switzerland, as a member of the European Free Trade Association (EFTA), is committing to reducing trade tariffs with the two new countries by signing the agreements on the fringes of the World Economic Forum (WEF) annual meeting in Davos.

+ Read more: who benefits from FTAs with Switzerland?

However, in common with some previous FTAs, the trade agreement with Thailand has not been met with objections.

“The Swiss government is not particularly concerned about making trade treaties with undemocratic states,” Simon Degelo, of the NGO Swissaid, told SWI swissinfo.

Thailand has a long history of strict, conservative governments, punctuated by military coups. Even during the current period of relatively stable democratic rule in Thailand,“it's hard to justify FTA negotiations when the Thai population has no realistic opportunity to influence the process,” he added.

Another NGO, Alliance Sud, also accuses EFTA of conducting a slapdash Sustainability Impact Assessment (SIA), which was published in September, just over two months before the negotiations, which began in 2005, were concluded.

Alliance Sud also criticises the SIA for being vague about the potential risks of enhanced trade with Thailand and for failing to recommend concrete actions for dealing with sustainability violations.

“The SIA gives the impression that it is just trying to justify the FTA,” Isolda Agazzi, trade policy officer at Alliance Sud, told SWI swissinfo.

However, the NGO is pleased that the final EFTA-Thailand FTA did not include a proposed International Union for the Protection of New Varieties of Plants (UPOV) clause that would have restricted the rights of Thai farmers to fully utilise imported seeds.

“This goes to show that FTAs with developing nations do not have to contain an intellectual property rights monopoly on seeds,” said Agazzi.

Switzerland's State Secretariat for Economic Affairs (SECO) argues that trade agreements can be instruments to improve governance and sustainability in other countries.

“Switzerland includes binding sustainability provisions in its free trade agreements in order to establish sustainable bilateral economic relations,” SECO says on its website.“In doing so, the parties to the agreements undertake to align the economic objectives pursued by the free trade agreement with targets relating to environmental protection and labour rights.”

“Switzerland monitors the implementation of sustainability provisions in free trade agreements and works systematically with its partner countries to address any problems in this area.”

But civil society, some politicians and occasionally large sections of Swiss population, do not always agree with this statement.

Objections were raised to the signing of a free trade agreements with China in 2013. The Swiss government now faces criticism for seeking to expand the terms of the agreement .

In 2021, voters narrowly approved an FTA with Indonesia (51.3% in favour), following objections that the deal would encourage further deforestation to make room for palm oil plantations.

Ratification of a controversial FTA with the Mercosur states of Brazil, Argentina, Uruguay and Paraguay has been delayed for years amid concerns from environmentalists and Swiss farmers.

“The FTA is immediately associated with the deforestation of the Amazon, even if this fact has not necessarily been proven,” Cédric Dupont, professor of international relations at the Geneva Graduate Institute, told a recent edition of SWI Swissinfo's Let's Talk studio debate.

EFTA and the Swiss government hope that both the new FTAs can be implemented without hitches and further boost trade with Thailand and Kosovo.

“Every free trade agreement is primarily about facilitating access to important markets for our companies. This strengthens the competitiveness of our business location and thus Switzerland's prosperity,” Christine Moser of Switzerland Global Enterprise, the official Swiss organisation for export and investment promotion, told SWI swissinfo in an interview last year.

According to SECO, Thailand was Switzerland's 21^st largest global trading partner in 2023.

“In the period from January to October 2024, trade between Thailand and EFTA already reached a total of $10.29 billion, representing a year-on-year growth of 23.22%,” stated EFTA in December.

Swiss exports to Kosovo rose from €21 million (CHF19.8 million) in 2013 to €66 million a decade later. Switzerland imported €5.8 million of Kosovar goods in 2013, rising to €75 million in 2023. This made Switzerland the fifth largest export market for Kosovo.

In 2022, Swiss companies saved a total of CHF2.4 billion ($2.7 billion) in customs duty thanks to all the FTAs in place, according to the Swiss FTA Monitor released last year.

Edited by Reto Gysi von Wartburg/sb

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