The World Economy is Restructuring Itself

Let's Talk

The return of protectionism, the renegotiation of relations with the European Union, and a cooling Chinese market: against a backdrop of geopolitical turmoil, with whom and how should Switzerland trade? This Let's Talk debate tackles this question.

My Contributions

I emphasised that forging sustainable alliances with strong partners will become even more important in the future: "Switzerland is not an island," I observed, adding: "So far, it hasn't fared badly in turbulent times; it's doing relatively well." However, Switzerland risks being caught up in the additional Trump-tariffs. "As a highly globalized economic power integrated into these global value chains, Switzerland will feel the effects." Moreover, under Trump, the small economic nation will likely lose the protection afforded by international law and the World Trade Organization. "If a large market like the US no longer adheres to the rules, Switzerland can do little about it," I said. "And if these rules disappear, Switzerland will very quickly find itself alone."

The discussion then turned to alternatives – whether turning to China was an option and to what extent Free Trade Agreements offer economic and legal protection. I noted that the debate – whether or not trade with China should include trade-related considerations such as labour or environmental standards – illustrates how the legal framework of trade relations is changing. "For many years, we treated economic interests and our other interests separately," I said. "Today, that's almost unthinkable."

While Switzerland is currently very innovative with new agreements that combine economic interests with interests in protecting human rights and the environment, its older and economically more relevant trade agreements continue to treat economic interests separate from trade-related interests.

The entire discussion is available online.