by Ulrika Lomas, Tax-News.com, Brussels
12 February 2019
The UK and Switzerland have signed a trade continuity agreement that will serve as a basis for their trading relationship after Brexit.
The agreement was signed in Bern on February 11, 2019.
The Swiss Federal Council explained that the agreement ensures the continuation of the economic and commercial rights and obligations currently arising from the agreements between Switzerland and the EU.
The new agreement replicates the majority of the Swiss-EU trade agreements that currently govern relations between Switzerland and the UK, namely: the 1972 Free Trade Agreement, the Agreement on Public Procurement, the Agreement on the Fight against Fraud, part of the Agreement on Mutual Recognition in Relation to Conformity Assessment, and part of the 1999 Agreement on Agriculture.
However, some agreements between Switzerland and the EU are based on the harmonization or recognition of the equivalence of rules between the two parties and cannot be replicated in their entirety at this stage.
The UK Government said the agreement simplifies trade and will allow businesses to continue trading freely, without any additional tariffs, after Brexit. It also provides for the ongoing elimination of duties on the vast majority of goods traded between the UK and Switzerland.
According to the UK Government, trading on these preferential terms, rather than on World Trade Organization terms, will deliver significant savings and help to safeguard British jobs.
An additional agreement was signed between Switzerland, the UK, and Liechtenstein to extend the relevant provisions of the trade agreements to the territory of Liechtenstein under the Swiss-Liechtenstein Customs Union.
The agreement between Switzerland and the UK will come into force as soon as the Swiss-EU agreements cease to apply to relations between Switzerland and the UK.
Swiss Federal Councillor Guy Parmelin said the agreement “ensures continuity in our trade relations after the United Kingdom leaves the European Union and lays the foundations for our future relations.”
The agreement was welcomed by Anne-Marie de Weck, President of the British-Swiss Chamber of Commerce. She said: “It is imperative for our members, both British and Swiss businesses, that trade continues. Switzerland is the UK’s seventh largest export market, third largest non-EU market, eighth largest foreign direct investor, and tenth top destination for UK outward direct investment. It is paramount that the British and Swiss governments have secured the continuation of a huge trading relationship with this agreement.”