S-GE Study: Turbulent times for Swiss exporters?
A recent S-GE study by Switzerland Global Enterprise looks at the threats and opportunities for internationally active Swiss companies. Business professors Simon J. Evenett (University of St. Gallen) and Patrick Ziltener (University of Zurich) answer burning questions that concern risk managers.
Daniel Küng, CEO of Switzerland Global Enterprise, is quoted at the beginning of the new S-GE study: "In view of the discussions about a possible trade war and the rising protectionism in the world, our internationally active companies are confronted with a great deal of uncertainty," says the CEO. "With the new study, we want to provide SMEs in particular with guidance for their export strategy." To illustrate the situation for Swiss companies, the study describes global trends in trade policy, highlights the circumstances in seven important countries and regions and shows the consequences for Swiss companies.
Development despite US trade barriers
Accordingly, the US has already introduced more than 100 new trade-restrictive measures per year since 2009, i.e. long before Donald Trump took office. Despite this, Swiss exports to the US grew to CHF 34 billion today from CHF 22 billion in 2012, so it remains to be seen to what extent tariff increases - if they were to actually take effect for Switzerland - would have a negative impact.
Possible disadvantages of new EU agreements
The EU recently concluded a free trade agreement with Japan. According to media reports, negotiations with the South American association of states Mercosur are about to be concluded. In Japan, disadvantages may arise above all for food producers. In South America, the effects are still unclear, but high import duties often apply there, especially in the most important market Brazil.
If these were reduced for EU competitors of Swiss companies, they would have a weighty competitive advantage. Switzerland is also negotiating an agreement with the Mercosur states.
Globalisation projects and agreements in Asia-Pacific
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) have the potential to have a lasting impact on global trade flows. Exporters will have to follow their development closely, as their market access conditions will change and they will have to suffer competitive disadvantages in some areas at best. The two so-called "mega-regionals" show that the signs in the region continue to point towards trade integration.
Reinforcing this is "China's Belt and Road Initiative". This huge globalisation project is intended to link 65 countries more closely, which account for two-thirds of the world's population and more than one-third of global gross domestic product. In China, Swiss companies are very well positioned thanks to a bilateral free trade agreement. In 2018, they will benefit from many new tariff reductions under this agreement.
SMEs: analysing individual cases and exploiting opportunities
Daniel Küng, CEO of Switzerland Global Enterprise, comments: "The study by the two experts shows: exporters should take the big headlines with a grain of salt. In individual cases, new agreements in the Asia-Pacific region or in Latin America could perhaps have more influence than the customs policies of the USA or China. At the same time, globalization is constantly creating new opportunities. Negotiations are underway on free trade agreements or trade facilitation measures are coming into force that could benefit Swiss companies. We advise exporters to analyse what is changing in detail for them locally - and to continue to boldly drive their international business forward!"
For an in-depth report on the USA-EU trade controversy and Epxerten comments, see also the Summer edition by Management Quality (2018/07-08)
The study "Swiss Exports between Globalization and Protectionism" is available free of charge on the site of Switzerland Global Enterprise (S-GE):
