5 Reasons to Pursue a U.S.-Swiss Trade Agreement

COMMENTARY Trade

5 Reasons to Pursue a U.S.-Swiss Trade Agreement

Oct 25th, 2018 2 min read
COMMENTARY BY
Anthony B. Kim

Research Fellow and Editor of the Index of Economic Freedom

Anthony B. Kim researches international economic issues at The Heritage Foundation, with a focus on economic freedom and free trade.
A Swiss flag is pictured in front of the Commercial and Financial District in Geneva, Switzerland. Denis Balibouse/REUTERS/Newscom

Key Takeaways

Lighthizer recently informed Congress that the United States would like to pursue trade talks with the European Union, the United Kingdom, Japan and the Philippines

“The United States remains committed to working with like-minded countries to promote fair-market competition around the world.” Switzerland is a prime candidate.

It makes sense to prioritize a trade deal with Switzerland. The pursuit of a perfect agreement should not be allowed to be the enemy of a good agreement.

U.S. Trade Representative Robert Lighthizer recently informed Congress that the United States would like to pursue trade talks with the European Union, the United Kingdom, Japan and the Philippines.

Another country that merits such consideration for a bilateral trade pact is Switzerland. There are five reasons for that.

  1. The United States and Switzerland have a proven record of a dynamic economic partnership that has enhanced prosperity in both countries.
  2. Switzerland is one of the most advanced and capable free-market economies. According to The Heritage Foundation’s annual Index of Economic Freedom, which measures the entrepreneurial environments of 180 economies around the world, Switzerland tops the rankings in Europe.
  3. While not a member of the European Union, Switzerland is at the geographic heart of continental Europe and offers an additional strategic dimension to the Trump administration’s thinking on trade policy. Switzerland currently has a network of 30 free-trade agreements with 40 partners outside the EU. The country has bilateral trade deals with China and Japan—so why not with the United States?
  4. In its latest trade agenda report to Congress, the Trump administration asserted that “the United States remains committed to working with like-minded countries to promote fair-market competition around the world.” Switzerland is a prime candidate as one of the “like-minded,” and negotiations could result in an early harvest.
  5. More notably, a U.S.-Swiss free-trade agreement uniquely presents a tangible and practical opportunity for moving forward President Donald Trump’s proposal for zero tariffs and zero barriers. Since December 2017, Switzerland has already unilaterally removed tariffs on imported industrial goods, with tariffs reduced on selected agricultural goods not produced in Switzerland.

Going beyond those five reasons, the shared values of the United States and Switzerland make the two countries natural, forward-looking economic partners.

As Ed Feulner, founder and former president of The Heritage Foundation, pointed out, “It’s time for the U.S. trade representative and the White House National Economic Council to fast-track dialogues with their Swiss counterparts in the pursuit of a U.S.-Swiss economic freedom partnership.”

Rather than requiring hundreds of pages to institutionalize a trade and investment pact with Switzerland, the pact should be straightforward, simple, and streamlined.

It makes sense to prioritize a trade deal with Switzerland. The pursuit of a perfect agreement, nonetheless, should not be allowed to be the enemy of a good agreement.

The two countries should be willing to consider a mutually acceptable agreement that would produce real practical gains, even if it does not achieve everything that could be asked of it.

The unique opportunity to notch up the U.S -Swiss partnership in a practical way with a high-quality trade agreement should not be missed.

This piece originally appeared in The Daily Signal