International Trade in Services

Overview of the trade relations of Switzerland in the services sector

The foreign relations of Switzerland in respect of trade in services are based on three pillars, i.e. 1) at the multilateral level, 2) at the European level, as well as 3) at the plurilateral or bilateral level with third countries. This reflects the general structure of international economic relations.

At the multilateral level, international trade is ruled mainly by the agreements concluded under the Geneva-based World Trade Organization (WTO). One such agreement is the General Agreement on Trade in Services (GATS), whose basic obligations are market access and national treatment. Other international organisations, though, are also active in this field, for instance in relation to specific service sectors.

What is a service?

The services sector covers a wide range of activities, in particular professional services (medical doctors, lawyers and other legal services, engineering services, architectural services), business services such as marketing, advertising or consulting services, postal services, telecommunications services, distribution and trading services, financial services (banking services, insurance services, stock exchanges, securities services), tourism (hotels, restaurants, tourist guides), transport, audiovisual and cultural services, health services, education services, construction, energy, and environmental services, and in fact any activity except the production or transformation of industrial or agricultural goods or mining.

It is thus difficult to encapsulate the notion of "service" in one definition. The services sector is very varied and extends from independent service suppliers to multinational companies, and is also the hard core of the small and medium sized enterprises (SME).

Importance of the services sector for the Swiss economy

The services sector is the main source of economic growth both in Europe and worldwide. In Switzerland, the services sector accounts for over 70 % of the gross national product. A trade balance surplus of 29.6 bn Swiss francs is accruing in the services sectors (year 2005). Furthermore, 80% of the jobs newly created are in the services sector.

Switzerland's trade policy in the services sector

Switzerland's trade policy in the services sectorSwitzerland ranks amongst the world's more open markets for services. The density of foreign companies established in Switzerland is one of the highest. Every four years, Switzerland (and Liechtenstein) is subject to a review of its trade policies by the World Trade Organization (WTO). The last review was completed in April 2013 and you find an excerpt relating to the trade in services of the report of the WTO Secretariat below (part 4.4). It contains the following sections: 4.4.1 banking, financial and insurance servies, 4.4.2 telecommunications services, 4.4.3 transport services, 4.4.4 other services: 4.4.4.1 postal services, 4.4.4.2 distribution services and 4.4.4.3 tourism services. Further below you will find the excerpt relating to trade in services of the reports of the WTO Secretariat dating from the years 2013, 2008 and 2004.

What role plays the SECO?

The Swiss State Secretariat for Economic Affairs (SECO) is responsible for elaborating Switzerland's position and it represents Switzerland in international negotiations on trade in services.

The SECO identifies what measures could promote even further the attractivity of Switzerland as a location for foreign investors and operators. This allows to attract more capital, foreign investments and know-how useful to Switzerland, in line with the economic promotion policies at federal and cantonal level. For instance, an improvement of the conditions of establishment for foreign companies is some sectors (e.g. the number of authorisations or licences granted to banks, insurances or other service suppliers) has positive consequences for investment in Switzerland, creating jobs and stimulating economic growth.

Similarly, improvements in the conditions for temporary entry of highly skilled personnel in certain services sectors makes it more easy for Switzerland to attract foreign companies, as they often need to be able to bring intra-corporate transferees and foreign specialists. This know-how will then benefit in the whole Swiss economy.

On the other hand, the SECO makes sure that Swiss service providers are granted better conditions for their exports to foreign markets, in particular in high value-added services and high technology. To this end SECO identifies the comparative advantages of the Swiss services industry and the sectors where Swiss services exporters are most competitive. SECO identifies the most dynamic export markets on the basis of international trade flows and of the economic structure of those countries. It then analyses the market access conditions in those countries.

Multilingual glossary on trade in services

The SECO has tried to post documents in this site in four languages (German, French, Italian and English). This was not always possible, though, and often a document will not be available in the web-visitor's language. To help visitors to benefit from documents available only in foreign languages, SECO has prepared a glossary that you find below. This glossary contains terms relevant to services. It contains many terms from the General Agreement on Trade in Services (GATS) or the World Trade Organization (WTO), terms used in international trade law or trade policy, as well as specific terms related to service supply and
sectoral expressions.

Last modification 04.03.2016

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