U.S.-Swiss Free Trade Agreement: It’s On the Horizon
Switzerland and the United States have enjoyed a long history of fruitful economic cooperation and cross-border investment. The two countries are key trading partners, and the U.S. is the No. 1 destination for Swiss investment, as well as one of the largest foreign investors in Switzerland. Despite these strong ties, the two countries do not have a free trade agreement. Voices on both sides of the Atlantic have been growing louder in support of a bilateral free trade agreement. Here’s what you need to know.
On April 17, 2019, U.S. Ambassador to Switzerland Edward McMullen (YL 1995) discussed this year’s hot topic for the U.S.-Swiss relationship—“The Future of Swiss-American Economic Relations”—at an ASF Young Leaders reunion in Rüschlikon. He highlighted the importance of the U.S.-Swiss trade relationship, as well as the positive outcome of meetings between U.S. Trade Representative Robert Lighthizer and Swiss Economics Minister Guy Parmelin in Washington the previous week.
Ambassador McMullen had previously detailed the benefits of a U.S.-Swiss free trade deal for both countries, including for Swiss farmers.
His Swiss counterpart in Washington, DC, Ambassador Martin Dahinden, emphasized the strength of U.S.-Swiss economic relations in a recent speech to the U.S. Chamber in March.
The significance of the trade and investment relationship between Switzerland and the United States can hardly be overstated. Sergio Ermotti, CEO of UBS and chairman of the board of the Swiss-American Chamber of Commerce, believes that Switzerland might be more important to the United States than China.
A U.S.-Swiss free trade deal was also on the agenda of the 2019 meeting of the World Economic Forum. And Swiss entrepreneur Michael Pieper, the owner of Artemis Holding, wrote of the significance of the trade relationship between the U.S. and Switzerland—and about the important role of the American Swiss Foundation.
U.S. Trade with Switzerland
According to the U.S. Trade Representative, in 2017 (latest data available), U.S.-Swiss trade totaled $122 billion. U.S. exports to Switzerland were $59.0 billion; imports were $62.9 billion. The U.S. goods and services trade deficit with Switzerland was $4.0 billion in 2017.
Switzerland sent 12.2 percent of its total export goods to the United States in 2016, making the U.S. Switzerland’s No. 2 export destination (after Germany, at 14.4 percent).
Swiss Direct Investment in the United States
The United States is—by far—the most important destination for Swiss foreign direct investment (FDI). Switzerland’s cumulative direct investment in the U.S. amounts to $258 billion, and Swiss companies directly support nearly half a million jobs in the U.S.
Manufacturing is the most important sector of Swiss FDI, making up 36 percent of total Swiss investment abroad. Switzerland is now the seventh-largest foreign director investor in the United States. At the end of 2014, Switzerland and seven other countries made up 80 percent of all FDI in the U.S.
The Time Is Ripe for a U.S.-Swiss Trade Agreement, Ed Feulner & Anthony Kim, The Daily Signal
The United States and Switzerland: Strengthening Our Economic Ties, speech by Ambassador Martin Dahinden
Building New Free Trade Alliances, Kent Lassman and Patricia Schramm, The Washington Times
5 Reasons to Pursue a U.S.-Swiss Trade Agreement, Anthony Kim, The Daily Signal
Opportunity Knocks for Switzerland in the US, Ralph Pöhner, Handelszeitung
It’s Time for a Free Trade Agreement with Switzerland, Anthony Kim, Terry Miller, & Ed Feulner, The Heritage foundation
Swiss-U.S. Economic Relations, Federal Council of Switzerland
The Global Competitiveness Report 2018, World Economic Forum
Switzerland Punches Way Above Its Weight, video, Embassy of Switzerland in the U.S.
Switzerland, United States Trade Representative
Trade & Investment Framework Agreements, United States Trade Representative
Trade in Goods with Switzerland, U.S. Census Bureau
Swiss-American Chamber of Commerce
A growing impact is also being made by Switzerland’s “export” of its apprenticeship and vocational education model. (See ASF’s Apprenticeship Education in Switzerland: Building Bridges Conference Report and the Apprenticeship Resources page.)