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US-Switzerland Trade Relations: Alliance Founded on Democracy
Marking the Beginning of Trade Relations

Switzerland is regarded as a largely mountainous landlocked country found in west central Europe. It is the home for most UN headquarters thus making it boom in terms of world economy. The most popular agencies found in the country are the Economic and Social Council, World Health Organization and International Red Cross. As it embraces all these stations, its doors were open for larger opportunities in terms of international trade.

Switzerland is a basic example of a country which had overcome the scarcity of natural resources. It based its economic prosperity by being inventive coupled with frugality and perseverance. It is now one of the most highly industrialized countries in the world. Since the 19th century, industrial engineering had made a substantial contribution to the modern Swiss economy. The products of Swiss labor were known throughout Europe.

Printing and graphics, machine tooling, watch making and clock making were all practice in a lot of medieval Swiss cities. The best-known products from the food industry are cocoa powder, condensed milk, chocolates and cheese. These commodities were developed during a century-long effort to process milk into a nonperishable commodity.

Swiss agriculture is characterized by a highly intensive production of mostly small and owner-operated farms. Two-thirds of the farm population raises cattle and the value of dairy and beef production such as milk, cheese, butter and meat amounts to more than half of the agricultural output. Agricultural activities extend to wine production, irrigated fruit and vegetable farming as well as apple pear and cherry growing, Switzerland's foreign trade relies heavily upon interchange of goods with its neighbors in the European Community. Its first years of trade with the United States were evidenced by the so-called US-Swiss Joint Economic Commission (JEC). This basically focused on issues such as anti-money laundering, counter terrorism and regulations on pharmaceutics. The negative trade balance in Switzerland is usually compensated by the net income from tourism, the insurance industry and international financial transactions where Zurich is a world center.

Major Exports and Imports between the United States and Switzerland

Switzerland's trade heavily depends upon exports of goods to the United States and the rest of Western Europe. Its leading exports are comprised of capital equipment, watches, optical instruments and chemical industries such as compounds, dyes and pharmaceuticals. Imports are evenly distributed among agricultural products, industrial raw materials, machinery and fuels.

For the period ending August 2008, the US Census Bureau recorded exports from US to Switzerland at a total of $15.69 billion while the imports from Switzerland to US listed a total of $11.65 billion. The year 2007 was a fruitful year for the trade relations of these two nations as well. The following are the statistics which could be evidence to this fact:

  • Swiss Exports to US. For 2007, total exports of Switzerland to US amounted to $14.77 billion, 19.3% or $2.85 billion of which went to medicinal, dental and pharmaceutical preparations. Other products completing the top ten list were: jewelry such as watches and rings; US goods returned and reimports; other scientific, medical and hospital equipment; other household goods such as clocks and typewriters; other industrial machinery; industrial organic chemicals; electric apparatus and parts; machine tools, metal working, molding and rolling; and measuring, testing and control instruments. The aforementioned instruments gained $336 million or an equivalent of 2.27% for the year's total.
  • Swiss Imports from US. Out of the $17.04 billion total imports of Switzerland from US, 34.92% went to nonmonetary gold with an amount of $5.95 billion. Other remarkable products in this line were: pharmaceutical preparations; artwork, antiques and stamps; jewelry; gem diamonds; other household goods; other precious metals; minimum value shipments; medicinal equipment; and organic chemicals. Organic chemicals gained a hefty amount of $338.69 million or 7.99% of 2007's total.
  • Fastest-Growing US Exports to Switzerland. There were several products traded to and from both areas and for US exports to Switzerland, complete military aircraft gained an increase in sales percentage of 50,390% which is equivalent to $50.39 million. This is due to the fact that for 2006, no such goods were sold in Switzerland. Other vital products comprising this classification were: military apparel and footwear; tanks, artillery, missiles, rockets, guns and ammunitions; other petroleum products; and Numismatic coins. The last product increased by 309% from 2006 amounting to $38.23 million in total sales for 2007.
  • Fastest-Growing US Imports from Switzerland. The year 2007 also opened an opportunity for Swiss products to increase its sales within the territorial jurisdiction of the United States. Topping the list of these commodities was cane and beet sugar which earned $229 thousand dollars equivalent to 3271% from 2006.
  • Other goods were: stone, sand, cement and lime; fuel oil; bodies and chassis for passenger cars; and railway transportation equipment. The last good was able to earn $21.06 million or an equivalent of 448% increase from 2006.
Treaties between US and Switzerland

In order to support the bilateral relations between these two countries, it was pleasing to note that they came up with several important treaties. These trade agreements were used to strengthen the bond as well as promote global trade in these two nations. Some of the most celebrated and remembered agreements were:

  • Treaties and Other International Acts Series 12894. This is an important agreement which mainly focused on the peaceful uses of nuclear energy. More profoundly known as atomic energy treaty, this was signed in October 31, 1997. It was actually a revision of the so-called Civil Uses of Atomic Energy which took effect in December 30, 1965. This focuses on the expansion of cooperation within this particular field while reaffirming the nations' support for strengthening issues on nuclear non-proliferation. They have specifically stated facts regarding protection of the people from these things as well as, non-dissemination, multiple supplier controls and storage of nuclear weapons. They have also discussed about the indispensable role of the International Atomic Energy Agency with regards to the safeguards system.
  • Tax Treaties. Just like any other international tax treaties, this one focused on issues of double taxation and other provisions on income taxes. This particular pact was signed in Washington on October 2, 1996.
It specifically provided for explanation on the current US Treasury Department tax treaty policy. This one was called the Model Income Tax Convention on Income and on Capital. The grant of the treaty was given as guidance for both taxpayers and the tax authorities of United States and Switzerland. To sum it all up, it have integrated all concerns regarding imposition of taxes on items and nationals alike.

Trade Conflicts between the Two Nations

Trade disputes could never be avoided especially that these two nations are both gaining high stature in world economy. Several relevant issues which had hindered economic prosperity were traced way back World War II. Here are some of the data regarding the trade disparity between United States and Switzerland:

  • US Bombings of Switzerland during World War II. The United States bombed the small state of Switzerland during the said time. Certain incidences affected the trade between the two nations especially that there were a lot of lives affected. Historians have even traced that on April 1, 1944, the Schaffhausen, a Swiss city located on the North, severely suffered the damages of war. The said occurrence was blamed on several things like bad weather, incompetence and faulty equipment. Debates arouse from this one but in the end, the US apologized to its comrade.
  • Trade Regulations and Standards. This aspect creates a lot of barriers to trade whether it is from one nation to another or in all nations found in global trade. For Switzerland and US, a lot of things needed resolution. The market opportunities for US in terms of biotech products are limited in Switzerland, There was this requirement to label products with biotech ingredients. Also, agricultural products were given strict tariff and quota barriers. The food retailing system in Switzerland was also an issue. This was mainly because two companies in Switzerland dominated 50% of grocery sales, thus foreign investors from US were left lagging behind.
What's In Store for Future Generations of These Countries?

All of the above-mentioned disparities occur in any trade agreement. Taking things on a more positive note, the United States and Switzerland have both learned their lessons from their erring issues. There was more transparency seen in the regulation standards after things were discussed closely by government officials. They may not have solved all the conflicts yet, but rest assured things will be well in the near future. These two strong nations have long been allies and were known to promote democracy anywhere. With their desire to uplift their standings in international trade, they focused more on improving both sides. Vested interests were left behind. The hope could be extended depending upon the people who will take a seat in both their governments. Whatever happens next should be something that will work for the advantage of the trade relations between both countries.

US-Switzerland Trade References

Note: Trade statistics, industry links, economic projections and global business resources on this page have been compiled from hundreds of trade related websites, government guides and resources on the Internet. We provide this valuable information for industrial suppliers, manufacturers, exporters and importers seeking to enter or expland business opportunities in Switzerland.


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Primary Trading Partners

Major Goods Exported

Major Goods Imported

Industrial Outlook

Switzerland's major industries include machinery, chemicals, watches, textiles, precision instruments.

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