The report's main topic highlights the close economic ties which exist between Switzerland and the border regions of neighbouring countries. These regions contribute significantly to strengthening Switzerland's position as an attractive location for business. Good cooperation across border regions is crucial to relations with Switzerland's neighbour countries and with the EU. The Federal Council considers that the main areas in which the federal government can help promote economic development in border regions include the quality and competitiveness of Switzerland as a location for business, the labour market, foreign economic relations, infrastructure, training, research and innovation.

Expanding market access under difficult conditions
Besides the debt and currency crisis, the main focus of Switzerland's bilateral relations with the EU was focussed on developing Swiss proposals with a view to resolving institutional questions. These proposals relate to the further development of the legal bases of the Swiss-EU agreements, their uniform interpretation, the mechanisms for monitoring and enforcing them, and dispute settlement. Concrete solutions to institutional questions in the area of electricity should create a model for future market access agreements (e.g. agriculture, food safety, product safety and public health, chemical safety). A dialogue has been initiated on the question of corporate taxation. The EU has requested negotiations on the extension to Croatia of the agreement on the free movement of persons. On 7 December 2012, the Federal Council defined the relevant negotiating mandate, and transmitted it to parliament's foreign policy committees, the cantons and stakeholder representatives for consultation.

In terms of free-trade agreements with countries outside the EU, agreements between EFTA and the Ukraine, Montenegro and Hong Kong entered into force. Bilateral negotiations with China and EFTA negotiations with Bosnia and Herzegovina, India, Indonesia, Central American countries and the Russia-Belarus-Kazakhstan Customs Union continued. EFTA launched free trade negotiations with Vietnam and Malaysia. Moreover, the deepening of existing agreements is taking on greater importance. In negotiations with, in particular, major emerging countries the striking of a balance of interests has proven challenging.

In light of the difficulties in bringing the comprehensive programme of the WTO Doha Round to a timely conclusion, current efforts to achieve consensus at the WTO are focusing on trade facilitation. At the plurilateral level, the revised Agreement on Government Procurement was formally adopted. Initial talks took place on broadening the Information Technology Agreement and on a possible plurilateral agreement on services. In addition, with Russia's accession to the organisation, the WTO gained an important new member.

Expanded discussion of issues surrounding sustainability and raw materials
At the Conference of the Parties to the UN Framework Convention on Climate Change in December 2012, Switzerland pledged to reduce its CO2 emissions under a second commitment period of the Kyoto Protocol. Work is underway with multinational companies to promote the application of the OECD Guidelines for Multinational Enterprises, as updated in 2011. The main focus is on the planned reorganisation of the National Contact Point (NCP). In 2013, the Swiss Export Risk Insurance Agency (SERV) will base its review of the social and environmental sustainability of business as it insures on the revised standards of the OECD and the International Finance Corporation (IFC).

On the question of access to raw materials, Switzerland is an active proponent of compliance with international commitments, particularly at multilateral level. In the field of economic development cooperation, Switzerland contributes to improving conditions in developing countries such that commodity revenues of these countries' governments will be used more effectively for promoting development. Switzerland also supports international initiatives for more responsible business practices on the part of companies engaged in the extraction of raw materials.

Confirmation of the strategic focus and financial basis for international cooperation
In the year under review the Swiss Parliament adopted the Message on International Development Cooperation 2013-2016 of the federal government (State Secretariat for Economic Affairs SECO and Swiss Agency for Development and Cooperation SDC). The Parliament thereby confirmed the strategic focus and financial basis for international cooperation activities for the next four years as well as the importance it attaches to economic and trade-policy measures in favour of more advanced developing countries and to cooperation with Eastern Europe. With respect to cross-cutting issues, bilateral cooperation and technical assistance provided through multilateral development banks focussed mainly on the green economy, taxation and development and job creation.

The main topic and the overview of the report are available on the Internet in English.

Address for enquiries:

Ambassador Christian Etter,
Federal Council Delegate for Trade Agreements,
SECO,
Head, Special Foreign Economic Service,
tel. +41 (0)31 324 08 62

Hervé Lohr,
Head of the Division of International Economic Law,
SECO,
tel. +41 (0)31 324 08 40

Publisher:

The Federal Council
Internet: http://www.admin.ch/br/index.html?lang=en

Federal Department of Economic Affairs, Education and Research
Internet: http://www.wbf.admin.ch