We live in times of great instability. The world, says Swiss President Doris Leuthard, has sustained a lot of shocks in the last 10 years – terror, war, migration and financial and economic crises. Debt is rising. And as many countries turn inwards and nationalism grows, so does protectionism.
Global trade agreements such as TTIP and TTP are “clinically dead,” Leuthard declared at the Swiss Economic Forum in Interlaken in June.* G20 communiques have had little to say in recent times about open markets and free trade. A report by the Global Trade Alert showed that since 2008, the country that has passed the highest number of protectionist laws and regulations is the US – traditionally a champion of global free trade. US policymakers have passed more than 1,000 such measures.
“This is not something invented by President Trump,” Leuthard said, pointing out that the trend began almost 10 years ago. Other offenders include Russia, India and even Germany – with more than 300 such measures – and the Netherlands, with over 200.
Switzerland, in contrast, has approved just 19 trade-inhibiting measures, she said. “We are one of the countries which is conducting open policies, which is committed to open markets,” she said. With its export-dependent economy, “retreating into hiding, or into nationalist tendencies, would be the wrong path for Switzerland to take.”
Despite the difficulties with traditional trade partners, new coalitions are emerging, Leuthard said. Trade deals with India and Indonesia are close to being sealed. The Chinese President Xi Jingpin visited Switzerland in January this year. “We were all a bit surprised that China has suddenly taken the lead in showing commitment to open markets and is much more active than in previous years in working towards bilateral and multinational agreements,” she said.
The European Union remains an important partner for Switzerland, despite the challenges of Brexit and the inherent flaws of the euro. Switzerland is the third-biggest trading partner for the EU after the US and China, with a trade volume far in excess of Japan’s, Leuthard pointed out. And while dossiers for important negotiations with the EU have been gathering dust for nearly three years, there is growing acknowledgement within the EU that talks should resume.
Leuthard said that wherever she is in the world, she hears praise and envy for Swiss entrepreneurship. “That makes me proud,” she said, congratulating Swiss industry for its success in mastering considerable challenges over the past years.
But she also had some criticism. Switzerland has not entered the digital age, she said. The annual IMD world competitiveness report showed it in second place – behind Hong Kong – in general competitiveness. In digital competitiveness it is only in eighth place. “That isn’t good enough,” she said. “Our industry is not yet where it should be.”
Many Swiss many remain sceptical of digitisation, she said, citing the example of the electronic ID card, which has been under discussion in Switzerland for 10 years, but is still not on the horizon. “Too much time has been lost over privacy concerns,” Leuthard said. “Now is the time to introduce it. It increases mobility and offers huge advantages for healthcare facilities and public administration.”
Leuthard urged the business community to assist the government in persuading citizens of the benefits it could bring in terms of quality of life.
“It will be the task of all of us to reduce this scepticism of technology, to prepare the people and get them involved, to awaken curiosity,” she said.
*The complete speech can be found here.