trade research report switzerland

• Trade Research ReportSwitzerland

• David Alonso 110152332

• Walter Durand 260103888

Switzerland

• Official Name : Swiss Confederation

• Capital : Bern

• Area : 41,200 sq Km. (Water : 1,520 ; Land 39,770)

• Government type : Federal Republic

• Independence : 1 August 1291

Population

Age Structure

0-1417%

15-6468%

65 +15%

Ethnics Group

65%18%

10% 1% 6% German

French

Italian

Romans ch

other

Population (continued)

Religions

Roman Catholic

46%

Protestant40%

other5%

none9%

Official Languages

63%19%

8%

1%9% German

French

Italian

Romansch

other

Swiss political System

N ation a l C ou n c il(E lec ted b y u n ive rsa l su ffrag e)

C ou n c il o f S ta tes(C h osen b y th e 2 6 C an ton s )

F ed era l A ssem b ly(leg is la tive b ran ch )

2 4 6 m em b ers

F ed era l C ou n c il(execu tive b ran ch )

7 m em b ers e lec ted b y th e F ed era l A ssem b ly

Political trends

• President: Christoph Blocher

• The president is supported by the Swiss People’s Party that won most seats in 2003.

• Agenda oriented towards drastic public spending cuts, limitation of immigration, and less political integration with Europe.

Key Ecomomic Data

• GDP: $268 billion• GDP per capita: $35,732• Inflation: 0.2%• Unemployment: 4.1%• GDP growth: 1.7%• Public spending: 51.6% of GDP• Public deficit: 2.8% of GDP• Public debt: 57% of GDP

Economy

GDP Composition

Agriculture2% Industry

34%

Services64%

Balance of Payments

Rankings

• Switzerland Canada

• GDP 20 9

• GDP/cap 2 14

• Corruption 8 11

• Human Development 11 4• Competitiveness 8 15

•

International Trade

Exports (main markets)

• Germanny: 20.5%• United States: 11.7%• France: 9.5%• Italy: 8.1%• United Kingdom 5.2%

• Canada: 1.1%• Mexico: 0.7%

Exports (products)

Imports (main suppliers)

• Germany: 31.5%• France: 10.3%• Italy: 10.0%• United States: 6.2%• Netherlands: 5.1%

• Canada: 0.3%• Mexico: 0.004%

Imports (products)

Foreign Direct Investment

FDI (inwards)

FDI (outwards)

Main Swiss Corporations

• Many Swiss corporations are involved in FDI. Some of the main investors include:

– UBS and Credit Suisse (banking)– Nestle (food)– Novartis and Ciba (pharmaceuticals)– ABB and Mettler Toledo (industrial equipment)– Adecco (human resources)

Relationship with Canada

• Relations between Canada and Switzerland are considered excellent and without any significant dispute.

• Both countries have shared interests in promoting multilateral free trade agreements.

• Both countries are members of the Francophonie.• Canada is home to the fifth largest Swiss expat

community.

Bilateral Trade

Canada was Switzerland 19th export market

Switzerland was Canada 22st export market

Swiss goods imported to Canada

0

500

1000

1500

2000

1999 2000 2001 2002 2003

Year

Sw

iss

fra

ncs

(m

illi

on

)

Major imports : pharmaceuticals, machinery, chemicals, watches,instruments/apparatus, agricultural products

Bilateral Trade (continued)

Canada was Switzerland 19th export market

Switzerland was Canada 22st export market

Canadian goods exported to switzerland

0

200

400

600

800

1999 2000 2001 2002 2003

Year

Sw

iss f

ran

cs

(mil

lio

n)

Major exports : machinery, pharmaceuticals, agricultural products,vehicles/aircrafts, paper/papergoods

Canadian Exports to Switzerland

• Composition:– Vehicles (including aircraft): 21%

– Machinery: 18%

– Agricultural Products: 15%

– Paper Products: 14%

Swiss exports to Canada

• Composition:– Pharmaceuticals: 40%

– Machinery: 18%

– Chemical Products: 16%

Main Corporations

• Canadian Companies in Switzerland:

– Bombardier

– Nortel Networks

– Alcan

– Nova Chemicals

• Swiss Companies in Canada:

– Nestle

– Novartis

– Roche

– ABB

Investments

• Switzerland held 6th rank among foreign investors in Canada.(2003)

• Canada held 18 th rank among foreign investors in Switzerland.(2003)

Direct investment : Canada vs. Switzerland

0

10002000

3000

4000

50006000

7000

8000

1999 2000 2001 2002 2003

Year

Ca

na

dia

n D

oll

ars

Canadian DI inSwitzerland

Switzerland DI inCanada

Main International Organizations

• Switzerland is member of the EFTA: free trade with Norway and Iceland.

• Switzerland is also actively involved in G-10, the Paris Club and many international banking and economical organizations.

• By contrast, Switzerland is not a member of the European Union.

Trade and Economic Issues

• Within the WTO framework, Switzerland filed a complaint against the American Safeguard measures on steel (later removed)

• Minor trade issues with Slovakia, Australia, and India on agricultural products.

• The Swiss financial system came into close scrutiny by international regulators for its bankinking secrecy laws.

Switzerland and the WTO

• In the current Doha round, Switzerland has welcomed the decision to further liberalize the international framework for non-agricultural market access (NAMA).

• Switzerland also advocates for reductions in trade barriers on services.

• Switzerland wants a longer transitional period for liberalizing agricultural trade.

• Switzerland regrets the failure to include new rules on international investments and government transparency.

Trade Policy

• Consistent with its emphasis to develop trade with Southeastern Europe and the Mediterranean Bassin, Switzerland has signed free trade agreements with Turkey, Israel, Romania, Bulgaria, Macedonia, Croatia, Jordan, Lebanon, Morocco, and the Palestinian Authority.

• Switzerland has an extensive set of trade agreements with the European Union.

Trade Policy (continued)

• Switzerland has also signed free trade agreements with Mexico, Chile, and Singapore.

• Trade negociations are currently made with Egypt, Tunisia, andthe SACU countries.

• Current talks are being held with Canada.

• Switzerland wants a predictable international trade environment without losing its political independence.

Advantages

• Switzerland has many competitive advantages:

– Location in Central Europe– Excellent Infrastructures– Minimal trade barrier with the EU– High productivity and well educated workforce

Weaknesses

• Switzerland ’s main weaknesses are:

– High costs– Heavy internal regulations– Small internal market

Conclusion

• Switzerland has many competitive advantages that make it an attractive place to invest.

• It offers safety and potentially high returns for investments in skill intensive activities.