"Switzerlands Strategy on Foreign Economic Policy - Special Focus on Eastern Europe" Monika Rühl Burzi

Federal Department of Economic Affairs FDEA State Secretariat for Economic Affairs SECO Bilateral Economic Relations Switzerland’s Strategy on Foreign Economic Policy – Special Focus on Russia, Ukraine, Belarus and Kazakhstan Monika Rühl Burzi, Ambassador Annual General Meeting of the Joint Chambers of Commerce JCC, April 21, 2010, Zurich

Outline 1. Swiss Foreign Economic Policy Strategy 2. Trade and investments in and with Russia, Ukraine, Belarus and Kazakhstan 3. Implementation of the Swiss Foreign Economic Policy Strategy in Russia 4. Challenges / Potentials <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 2

1. Swiss Foreign Economic Policy Strategy 3 dimensions 1.Access to foreign markets 2.Internal market liberalisation 3.Contributing towards the economic development of trading partners <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 3

1. Swiss Foreign Economic Policy Strategy (2) Access to foreign markets  Objective: Enabling Swiss exporters of goods, services and production factors to gain entry to foreign markets by removing barriers to cross-border economic activities (customs barriers or non-tariff-related obstacles).  Further extension of broadly-based bodies of multilateral regulations (WTO).  Preferential agreements or other bilateral / plurilateral regulations with EU/EFTA countries, non-European OECD-countries (USA, Japan) and with BRIC- countries (China, India, Brazil and Russia). <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 4

1. Swiss Foreign Economic Policy Strategy (3) Internal market liberalisation  Objective: Increasing growth by opening the swiss market to imports.  Increasing the (relatively low) productivity of certain sectors of the domestic market so that these companies can maintain their position in relation to rival imports.  Increasing the competitiveness of Swiss export companies, as they can obtain competitively priced, high quality input goods and services. <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 5

1. Swiss Foreign Economic Policy Strategy (4) Contributing to economic development in partner countries  Objective: To facilitate the participation of as many countries as possible in international trade, or in other words, globalization.  Economic development cooperation: Supporting the integration of developing and newly industrialising countries into the global economy.  Institutionalised economic dialogue within the international organisations of which Switzerland is a member (e.g. OECD, IMF, WTO). <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 6

2. Bilateral Trade Volumes Trade (Mio. CHF) Export %Total Import % Total Global Exports Global Imports Russia 2007 2‘919 1.5 1‘551 0.6 2008 3‘180 1.5 1‘053 0.3 2009 2‘131 1.1 696 0.3 Ukraine 2007 536 0.3 119 0.04 2008 628 0.3 144 0.05 2009 364 0.2 61 0.04 Belarus 2007 96 0.1 7 -- 2008 144 0.1 17 -- 2009 112 0.1 7 -- Kazakhstan 2007 183 -- 797 2008 180 -- 875 2009 168 -- 673 <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 7

2. Direct Investments In Switzerland (Mio. CHF, 2008): Russia 2‘500 (Source: KPMG Switzerland) Ukraine 5 (Source: KPMG Switzerland) Belarus n.a. Kazakhstan n.a. Swiss direct investments in (2008): Russia 5.3 Mrd. CHF (Source: Swiss National Bank) Ukraine 805.5 Mio. USD Belarus 1.2 Mrd. USD (Source: UN) Kazakhstan n.a. <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 8

Legal framework (bilateral) Russia Ukraine Belarus Kazakhstan Economic and 1995 1996 1994 1997 Trade Agreement Investment 1991 1997 1994 1998 Protection 1990s Agreement Double Taxation 1997 2000 1999 2000 Income Agreement <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 9

Bilateral Joint Economic Commissions Base Regularit Last Next y meeting meeting Russia Mai 12, 1994 9 meetings Oct. 16, 2009 Nov. 2010 since 1994 (tbc) Ukraine July 20, 1995 4 meetings Sept. 17, 2008 Sept. 2010 since 1995 (tbc) Belarus May 28, 7 meetings March, 18, Tbc 1993 since 1993 2010 Kazakhstan July 1, 1997 4 meetings Dec. 2, 2009 Tbc since 1997 <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 10

3. Implementation of the Swiss Foreign Economic Policy Strategy with Russia − Assignment in the Foreign Economic Policy Report of the Federal Council, 2004  Strategies for BRIC-Countries  Summary in the Foreign Economic Report of 2006 − Element of implementation of the first dimension (Access to foreign markets and international legal framework) − Strategy papers containing analysis and implementation measures on the following questions: − Is Switzerland being discriminated? − What needs to be done in order to increase the economic relations? <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 11

3. Implementation of the Swiss Foreign Economic Policy Strategy in Russia (2) Main measures • Negotiation of a Free Trade Agreement (within EFTA) • Updating/renewal of the Investment Protection Agreeement • Adjustment of the Double Taxation Income Agreement • Negotiation of a Visa-Agreement • Intellectual Property: Support to the Swiss Export industry combatting counterfeight; Agreement on rules of origin und geographical designations of origin • Institutionalisation of the dialogue at ministerial level • Trade promotion: review the increas of the manpower at the Swiss Business Hub in Moscow • Development of a strategy for scientific cooperation • Non-tariff barriers (watch industry): bilateral negotiations on fineness standards of precious metals and watch-reparation movement of goods <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 12

3. Action Plan Switzerland-Russia on the economic collaboration between the Swiss Department for Economic Affairs and the Russian Ministry for Economic Development 2007-2010 •Instrument for the implementation of the Russia Strategy •Signed by Federal Council Leuthard and Minister for Economic Affairs Nabiullina in July 2008 in Moscow •Monitoring of the implementation by the Joint Economic Commission Switzerland-Russia •Action Plan almost fullfilled  Continuation and extension currently ongoing <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 13

4. CHALLENGES Switzerland is exposed to in these markets Institutional • Weak economic infrastructure • Bureaucracy • Lack of transparency / corruption (customs procedure etc.) • Slow implementation of different internal reforms • Low level of productivity • Low degree of economic diversification (overreliance on raw materials) Legal • Weak rule of law / legal system and enforcement • Free Trade Agreement EFTA-Russia → Start of negotiations has been postponed due to conclusion of the Customs Union Russia, Belarus and Kazakhstan • Renewal of Investment Protection Agreement with Russia outstanding • Insufficient protection of Intellectual Property Rights <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 14

4. POTENTIAL for the Swiss economy in these markets • Relatively high GDP-growth rates • Geographical proximity • Large populations, big markets • Commodity based economies (high degree of natural resources in place such as crude oil, petroleum etc.): → Kazakhstan: Petroleum imports (2nd biggest supplier after Libya ) • Diversified industrial basis (Belarus) • Main Swiss industries present in Russia, Ukraine, Belarus and Kazakhstan: → machinery, food and food processing, commodity trade, chemical/ pharmaceutical, financial services, luxury products, watch industry, tourism <<Name of the Presentation>> FDEA/SECO/<<Ressort>> - <<Author>> 15

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"Switzerlands Strategy on Foreign Economic Policy - Special Focus on Eastern Europe" Monika Rühl Burzi

by maiak – The Newsroom of Eastern Europe on Apr 22, 2010

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"Switzerlands Strategy on Foreign Economic Policy - Special Focus on Eastern Europe" Monika Rühl Burzi — Presentation Transcript