(Bloomberg) -- The UK and Switzerland are kicking off negotiations for a new free trade agreement to boost the exchange of services between the two countries post-Brexit.
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Trade Secretary Kemi Badenoch met with her Swiss counterpart Guy Parmelin on Monday in Bern, the country’s capital. Formal talks will start next Monday in London. At a press conference in Bern, both sides refused to give a timeline to conclude negotiations.
The two countries’ existing deal rolled over from when UK was in the EU and predates the home computer and the internet, according to Badenoch’s department. The prize for negotiators is a new agreement that reduces barriers to trade between the two services “superpowers” in areas like finance, legal and professional services, and architecture, it said.
“That Switzerland is not in the EU makes negotiations much easier,” Badenoch said. “I don’t anticipate that we should have too many difficulties, but of course it’s difficult to say before going into the details of the negotiations.”
While the 2019 treaty secures rights and obligations from pre-Brexit times, it should now be “adapted to current conditions and further developed toward an agreement that is as comprehensive as possible,” the Swiss economic ministry said. Switzerland is the UK’s 10th biggest commercial partner, with bilateral trade totaling about £53 billion ($66 billion) a year.
To help companies in sectors like technology and life sciences share expertise, British negotiators aim to make business travel easier between the two nations.
Another aim is to cut remaining tariffs on UK exports such as red meat, chocolate and baked goods, which would need to overcome Swiss rules on agriculture. The country imports over £5.5 billion a year of foodstuffs under product lines where tariffs still apply for the UK.
In addition to the overall goals, the Swiss cited provisions on intellectual property rights and small and medium-sized enterprises as their priorities. Britain is Switzerland’s third-most important trade partner for services, with the exchange totaling around 23 billion francs ($26 billion) annually.
The UK government has presented signing new trade deals as one of the great benefits of Brexit. Earlier this year, Britain struck a deal to join an 11-nation Indo-Pacific free-trade bloc which includes Australia, Japan and Canada — a pact that Rishi Sunak’s government believes will boost economic growth and geopolitical relations.
UK to Join Indo-Pacific Trade Bloc in Major Post-Brexit Pact
But there’s also a long way to go to reverse the economic impact of a steep decline in trade with the EU, Britain’s biggest partner, since its exit three years ago. The UK’s independent budget watchdog recently estimated that Brexit likely reduced economic output by 4%.
For its part, Switzerland was keen to ensure its relations with the bloc remained intact.
“We don’t want to jeopardize our good relations with the EU, but improve our relations with the UK,” Parmelin said in Bern.
(Updates with comments from press conference in Bern, beginning in second paragraph)
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