OECD analysis of Switzerland's economic policy: opening up foreign trade instead of industrial policy
Bern, 14.03.2024 - The Organisation for Economic Co-operation and Development (OECD) published its report on Switzerland's economic policy on 14 March. It recommends that Switzerland further expand its trade relations in order to strengthen the resilience of the economy. Supply chains should be further diversified in order to counter geopolitical tensions and increased protectionism. However, the OECD advises against costly industrial policy initiatives.
The OECD emphasises that Switzerland has coped well with recent crises such as the coronavirus pandemic and the sharp rise in energy prices as a result of the war in Ukraine, and that the economy has shown itself to be resilient. With regard to crisis management, the OECD particularly praises the existing system of national economic supply, which is based on the responsibility of companies and only provides for state intervention on a subsidiary basis and for essential goods. It recommends that Switzerland retains this tried and tested system.
However, the report also identifies numerous challenges Switzerland is facing, including the ongoing geopolitical tensions, a strained financial situation, the ageing population, the strengthening of productivity growth, climate change and the shortage of skilled workers.
In order to increase the resilience of the economy and productivity, the OECD recommends – in addition to further opening up the economy to foreign trade and abandoning industrial policy initiatives – strengthening competition at home and further reducing the administrative burden on companies.
Switzerland promotes foreign trade openness and strengthens competition
The OECD's recommendations fit in well with the path Switzerland has chosen. With the unilateral abolition of industrial tariffs at the beginning of 2024, the Federal Council has taken an important step towards reducing trade barriers. Further important work to expand and strengthen trade relations is underway. This includes in particular the adoption of the negotiating mandate with the EU, the recently signed free trade agreement with India or the recently concluded modernisation of the free trade agreement with Chile.
Reducing the administrative burden is also an important concern for the Federal Council, which it is addressing in particular with the implementation of the new Business Relief Act. To strengthen the competitive environment, the Federal Council submitted proposals to Parliament last year for a partial revision of the Cartel Act.
Further information on the report can be found on the OECD website:
www.oecd.org/economy/switzerland-economic-snapshot/
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