The trade agreement signed today by Switzerland with the United Kingdom guarantees the maintenance of rights and obligations in the economic and commercial sphere in accordance with those between Switzerland and the European Union (EU). The new agreement is intended to lay the foundations for the continuation of good economic and trade relations between the two partners following the withdrawal of the United Kingdom from the EU.
This new agreement was concluded within the framework of the Bundesrat's "mind-the-gap" strategy and represents a replication of much of the trade agreements with the EU currently governing relations between Switzerland and the United Kingdom. It includes the 1972 Free Trade Agreement, the Government Procurement Agreement, the Anti-Fraud Agreement, part of the Mutual Recognition of Conformity Assessment Agreement (MRA) and the 1999 Agriculture Agreement. These various agreements reduce or eliminate barriers to trade and discrimination in mutual trade.
Some agreements between Switzerland and the EU are based on the harmonization or recognition of equivalence between Switzerland and the EU (Agreement on Customs Facilitation and Customs Security of 2009, certain sectors of the Agriculture Agreement, including the Veterinary Agreement, and certain sectors of the Agreement)
In addition, an additional agreement was signed today between Switzerland, the United Kingdom and the Principality of Liechtenstein to include the relevant provisions of the trade agreement under the Customs Union Switzerland-Liechtenstein on the territory of the Principality.
The signed agreements will enter into force as soon as the Swiss-EU agreements are no longer applicable to relations between Switzerland and the United Kingdom. If the transitional phase planned between the EU and the United Kingdom from 30 March 2019 comes to fruition, the bilateral agreements between Switzerland and the EU will continue to apply between Switzerland and the United Kingdom. In this case, the agreements serve as the basis for economic and trade relations between Switzerland and the United Kingdom after the transitional period has expired. On the other hand, if the UK leaves the EU "disorderly" on 29 March 2019 ("no-deal" scenario), the agreement will be applied provisionally as of 30 March 2019.
In connection with the "Mind the Gap" strategy The Federal Council would like to ensure the fullest possible continuation of the mutual rights and obligations that apply between Switzerland and the United Kingdom after Brexit, or even to expand these in certain areas. In this sense, Switzerland and the United Kingdom have already signed agreements on road transport, air transport and insurance. In December 2018, the Federal Council also passed an agreement on the rights of citizens with the United Kingdom.
The United Kingdom is economically an important partner of Switzerland. In 2017, it was the sixth most important market for Swiss goods exports (CHF 11.4 billion) and the eighth largest source market for imports of goods (CHF 6 billion). Switzerland is the fifth most important export partner for the United Kingdom outside the EU (after the USA, China, Hong Kong and the UAE). Swiss direct investment in the United Kingdom amounted to CHF 54 billion in 2017. This made the UK the fifth most important destination for Swiss investment. Conversely, British direct investment in Switzerland amounted to CHF 60 billion. Thus Switzerland was the ninth most important destination of British direct investment.