Economic impact of discontinuation of first package of bilateral agreements

SECO commissioned two independent research institutes, BAKBASEL and Ecoplan, to analyse the economic impact that would result if the first package of agreements ceased to apply. Both studies showed that any discontinuation of the first package would lead to a significant slowdown in economic growth in Switzerland. They also indicated that other setbacks, including a loss of legal certainty and a decline in Switzerland’s appeal as a business location, were to be expected. Their findings are broadly consistent with the figures set out in the existing literature on the seven agreements that make up the first package.

Ecoplan estimated that GDP would be 4.9% lower in 2035 (without taking the research agreement into account) if the first package ceased to apply, while BAKBASEL predicted that GDP would be 7.1% lower. Under the same scenario, Ecoplan anticipated that GDP per capita would be 1.5% lower in 2035, whereas BAKBASEL forecast a decline of 3.9 %. Immigration quotas would lead to a reduction in the available workforce and push recruitment costs up. The cessation of the other market access agreements would create new barriers to trade and restrict market access, thus making Switzerland less competitive. This in turn would have a negative impact on foreign trade and stifle competition in the domestic market. And, discontinuation of the research agreement would result in lower levels of research efficiency in Switzerland.

Any discontinuation of the first package would cause far-reaching changes in the economic environment and generally make Switzerland less attractive as a place to do business. This particular impact could not be dealt with in full by the two research institutes due to methodological limitations. In addition, it was not possible to quantify the effects of certain provisions of the agreements, although it became clear that the removal of those provisions would also have a negative effect. Consequently, it is safe to assume that the economic impact resulting from the first package ceasing to apply would be even greater than estimated. Termination of the first package would jeopardise both the continuance of other agreements and the conclusion of new market access agreements, thus severely hampering Switzerland's relations with the EU, which is by far its main trading partner.

BAK Basel Economics (2020): Volkswirtschaftliche Auswirkungen einer Kündigung der Bilateralen I auf die Ostschweiz. Analyse im Auftrag der Industrie- und Handelskammern St. Gallen-Appenzell und Thurgau.

Last modification 31.07.2023

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