Swiss Federal Council Approves 2009 Foreign Economic Policy Report

by Ulrika Lomas, Tax-News.com, Brussels

18 January 2010

According to a recent report, last year the Swiss Federal Council's foreign economic policy focused primarily on overcoming the financial and economic crisis.

The report also reveals that Switzerland increased its efforts to counter financial and commercial protectionism while seeking to further improve the domestic market environment and conditions for the export economy.

The findings emerged from the 2009 Foreign Economic Policy Report, which also addresses various aspects of sustainability.

The report explains how the Federal Council, in shaping its foreign economic policy and thereby improving the operating conditions for the Swiss economy, also helped to promote environmental responsibility and social solidarity.

According to the report, the Federal Council's foreign economic policy contributed to global efforts to overcome the financial and economic crisis at the level of multilateral organizations, European policy, and bilateral relations with nations outside Europe.

At the World Trade Organization, Switzerland continued to work for the liberalization of trade and against burgeoning protectionism.

Regarding improved relations between Switzerland and the European Union, the report points to the signing of the agreement on customs exemptions and customs security.

In the area of free trade agreements, the report notes that the bilateral Economic Partnership and Free Trade Agreement with Japan, one of Switzerland's four most important trading partners, came into force on September 1, 2009. The Free Trade Agreement between the European Free Trade Association (EFTA) and Canada also came into force in 2009.

The report also notes that China and Switzerland agreed to conduct a feasibility study for a bilateral Free Trade Agreement. Switzerland ratified an agreement between EFTA and Colombia, and EFTA also signed agreements with Serbia, Albania and members of the Arab Gulf Cooperation Council. An agreement with Peru is expected to be signed in the near future, bringing the total number of free trade agreements between Switzerland and partners outside the EU and EFTA to 23.

The report states that EFTA negotiations are currently underway with Algeria, India and the Ukraine, and that further negotiations will commence this year with Hong Kong and other countries, possibly including Indonesia and Russia. EFTA is working on a feasibility study with Vietnam, it adds.

Regarding the international financial system, the report highlights the fact that in addition to national support measures, concerted action by central banks and agreements at international level played a crucial role in combating the financial crisis.

According to the report, Switzerland took an active part in the contributions of the International Monetary Fund (IMF) and the Financial Stability Board. The IMF country report on Switzerland found that its response to the financial crisis had been appropriate and well thought out. In the field of taxation, however, Switzerland came under increasing international pressure – in the Organization for Economic Cooperation and Development (OECD) and elsewhere. Double taxation agreements with numerous countries were adapted in line with the decision by the Federal Council to conform in future to the OECD information-exchange standard.

The Federal Council approved the report on January 13, 2010.

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