Switzerland Country Brief - September 2004
- Australia's Relations with Switzerland
- Trade
- Investment
- Bilateral Agreements and Official Dialogue
- Cultural Relations
- High Level Visits
- Switzerland: Political
- Switzerland: Foreign and Trade Policy
- Switzerland: Economy
- More information on Switzerland
Australia's Relations with Switzerland
Australia and Switzerland enjoy friendly relations based on shared political and economic interests. The Australian Ambassador to Switzerland resides in Berlin but visits Switzerland regularly. Australia has a Consulate in Geneva. Switzerland has an Embassy in Canberra, and Consulates-General in Melbourne and Sydney. The Swiss Ambassador to Australia is H.E. Mr André Faivet.
Economic cooperation is an important part of the bilateral relationship. Switzerland is Australia’s eighth largest foreign investor with total inwards investment valued at A$16 billion at June 2003.
Cultural, especially musical, exchanges are also important in the relationship. In recent years, a number of Australian orchestras have toured Switzerland and several Swiss orchestras have performed in Australia.
Tourism between the two countries is significant. In 2003-4, over 41,000 Swiss nationals visited Australia.
Bilateral Agreements
Australia and Switzerland have several bilateral agreements:
- a Double Taxation Agreement
- a Defence and Supply Agreement
- a bilateral Nuclear Safeguards Agreement (covering the import of Australian uranium for peaceful purposes)
- an Extradition Treaty
- a Mutual Assistance Agreement providing for cooperation between Australian and Swiss law enforcement agencies.
Texts of bilateral agreements are available at the AUSTLII site.
Agreements under discussion include:
- A Social Security Agreement
- A Working Holiday Makers arrangement
Trade
Switzerland ranked 29th among Australia’s trading partners in 2003, with total merchandise trade valued at A$1.6 billion. We have an $850 million trade deficit with Switzerland. Australian merchandise exports to Switzerland in 2003 totalled $380 million. The major export items were non-monetary gold, aircraft and parts, meat and alcoholic beverages. Australia’s merchandise imports from Switzerland in 2003 were $1.2 billion. The major import items were medicaments (including veterinary), watches and clocks, and electrical equipment for circuits. Notable Swiss companies with a base in Australia include Nestlé and Bernina and financial services companies Credit Suisse, Zurich and UBS. Swiss company Atradius (formerly Gerling NCM) acquired the Australian Government Export Finance and Insurance Commission’s short-term credit insurance business in September 2003.
Investment
Switzerland is one of the world’s leading investors and has long been a major source of foreign investment in Australia. Swiss investors, including household names like Nestlé, ABB, Sandoz and Roche, hold shares in many of Australia’s major companies. The stock of Switzerland’s foreign direct investment in Australia was worth $6.6 billion at in the year to June 2002.
Cultural Relations
Cultural ties between Australia and Switzerland have traditionally been close, and many Swiss have made significant contributions to Australia. An illustrator who travelled with Captain Cook was the first Swiss national to touch Australian soil. Swiss artist Louis Buvelot (1815-88) was one of the first plein air painters fully to appreciate Australian nature. Nicholas Chevalier (1828-1902) illustrated the Melbourne Punch and introduced chromo-lithography to Australia. Henri Tardent (1853-1929) helped draft Australia's Constitution, and because of his advice, procedures to amend the Constitution resemble those in the Switzerland (where amendments require a majority of the national vote and a majority of the vote in a majority of cantons). Xavier Mertz, a solicitor from Basel and a one-time Swiss skiing champion, took part in the 1911-13 Australasian Antarctic expedition led by Sir Douglas Mawson, where he died on a glacier that Mawson later named after him.
High Level Visits
Australian ministers regularly visit Switzerland for meetings in Geneva or to attend the World Economic Forum in Davos early each year. Ministers at State and Federal level visit Zurich for discussions with financial institutions, and have travelled more widely in Switzerland to discuss political, social and judicial issues. Mr Downer has attended the Davos forum every year since 1997, except 2002 when the forum was held in New York (attended by Minister for Trade, Mr Vaile). Mr Pascal Couchepin, then Minister for Economic Affairs and former President of the Confederation, visited Sydney in November 2002.
Switzerland: Political
Switzerland has a complex and unusual political system formally known as 'semi-direct democracy'. New federal laws and international treaties can be overturned in citizen-initiated referendums, but voters do not elect the federal government.
Switzerland's national legislature is called the Federal Assembly. It has two chambers: the National Council and the Council of States. The National Council has 200 members elected on a (mostly) proportional representation basis. The Council of States has 46 members: two from each canton and one from each half-canton. The two chambers serve concurrent four-year terms. The next parliamentary election is due in October 2007. Parliamentary procedure is modelled on the 19th century U.S. Congress. There is no strict party discipline.
The two chambers have equal status. Laws can be initiated in either house, but need approval from both. Any law can be overturned in a referendum, which must take place if, within three months, 50,000 voters sign a petition demanding one. Referendums also take place if 100,000 voters sign a petition for a change to the constitution. To consider such matters and to vote on cantonal and communal issues, Swiss go to the polls four times a year. Switzerland accounts for more than half of all national referendums held globally.
Switzerland's Government is called the Federal Council (Bundesrat). In theory the Federal Council as a whole is the Swiss head of state, but in practice, this role is performed by the Federal President. Federal Councillors take turns to be Federal President and Vice President for one-year terms starting each New Year's Day. The 2004 Federal President is Joseph Deiss, head of the Department of Economic Affairs.
Switzerland has four main parties. The Radical Democrat Party (FDP) is economically liberal and socially conservative. Until last year, the FDP had been in power without interruption since 1848 and at that time was the world's most successful political party. The right-wing Swiss People's Party (SVP) then strengthened its position in the 2003 election, gaining another seat in the Federal Council, at the expense of the Christian Democrat Party (CVP). The CVP is centrist and descended from the 1848 losing side. The Social Democrat Party (SP) is the leading leftist party. Switzerland is the only significant country in Europe that has never had a left-of-centre government.
Current members of the Federal Council are:
|
Department of Finance |
Hans-Rudolf Merz (FDP) |
|
Department of Economic Affairs |
Joseph Deiss (CVP) (President) |
|
Department of Transport, Communications and Energy |
Moritz Leuenberger (SP) |
|
Department of Defence, Civil Protection and Sports |
Samuel Schmid (SVP) |
|
Department of Foregin Affairs |
Micheline Calmy-Rey (SP) |
|
Department of Justice and Police |
Christoph Blocher (SVP) |
|
Department of Home Affairs |
Pascal Couchepin (FDP) |
Switzerland: Foreign and Trade Policy
Switzerland played a decisive role in establishing the League of Nations, the modern Olympic Games and the Red Cross, and more recently has joined the Council of Europe, the World Bank, the IMF, the WTO, the OECD and was a founding member of the European Free Trade Agreement (EFTA).
In a marked shift in foreign policy Switzerland became a full member of the United Nations in September 2002 after a referendum on accession in March 2002 approved membership by a narrow majority, supported mainly by voters in the east of the country and in the major cities. Although Switzerland has been a member of almost every UN specialised agency, a leading UN financial contributor, and a host to many UN agencies in Geneva, it was unable to vote at the UN. As a full voting member the Swiss have indicated its UN priorities include improving the sanctions regime and strengthening humanitarian law.
Switzerland’s policy of neutrality means it does not belong to NATO. In 1997, it participated in NATO's Partnership for Peace (PfP) - though not as a step towards joining NATO. In June 2001, Switzerland narrowly approved a referendum allowing Swiss Peacekeepers on UN mandated peacekeeping missions to carry arms. Switzerland is the largest West European country not to have joined the EU.
Switzerland: Economy
Switzerland is an open economy with one of the highest standards of living in the world. In 2003, Switzerland’s GDP was approximately US$316 billion and is among the highest globally per capita despite the country’s lack of raw materials. Switzerland’s prosperity is based on labour skills and technological expertise in manufacturing, as well as earnings from services such as tourism and banking.
Switzerland is an important trading nation, with exports roughly equal to imports. Switzerland’s export of goods and services amount to about half of its GDP. It specialises in the export of machinery, chemicals and jewellery. Its principal trading partner is Germany, which accounts for around a fifth of its exports and a quarter of its imports.
To lift its growth potential, Switzerland has made efforts to liberalise its economy. An anti-cartel law came into force in 1996 and the telecommunications sector was opened to competition in 1998. Government procurement rules have been also made more competitive and transparent. The electricity market is in the process of liberalisation. Agriculture is still highly protected, however. Farm subsidies are higher in Switzerland than anywhere else in the developed world, with Swiss farmers receiving supports equivalent to around three-quarters of the value of their produce.