Post Brexit, UK Still Critical for Swiss Markets

 

 

The United Kingdom’s impending departure from the European Union means that new trading agreements will need to be forged between it and the rest of Europe. Previously, the UK’s trade took place through the EU, even that trade that occurred with non-EU nations.

But that does not necessarily mean that the UK will lose importance within European markets. Switzerland is especially eager to sign a new free-trade deal with the former EU nation. Switzerland, whose most notable exports include chemicals and medicinal products, machinery, musical instruments, and watches, does a great deal of trading with the EU, but is not an EU nation itself. It is apparent that Switzerland sees the chance to trade with United Kingdom without the intermediary of the EU as a chance to become an even more important trading partner the the UK and hopefully come to a trade agreement that is even more beneficial to it than the previous one had been.

Switzerland is an economic power, especially within Europe, so its interest in trading with the United Kingdom is good news for those concerned about the economic ramifications of Brexit. Switzerland’s current arrangement with the EU has even been discussed as a possible model for the United Kingdom’s post-Brexit economy. Switzerland which is a member of the European Free Trade Association but not the EAA (European Union Association Agreement), has access to the EU market via a series of bilateral agreements. In exchange, it must make a financial contribution and implement some EU trade regulations, although the financial contribution is smaller than Norway’s, and it doesn’t have to apply all EU laws. The agreement also allows free movement of people. It is more restrictive on services trade, which would be unfortunate for the UK, where the service sector is the largest section of the economy.

Still, Switzerland does not, as some Brits had hoped, intend to join the United Kingdom in a trade alliance against the European Union. This means that the two will not be working together to come to more a favorable agreement with the EU.

Switzerland was the UK’s third largest trading partner outside the EU in 2016, and the tenth largest trading partner overall. The UK, likewise, is currently Switzerland’s largest trading partner As a result of Brexit, the UK’s importance to Switzerland as a trading partner, and vice versa, may very well increase.