Swiss-US Business Relations: Current Strengths and Challenges Ahead

Transcription

1 Swiss-US Business Relations: Current Strengths and Challenges Ahead Liberales Institut Zurich, May 3, 2016 Martin Naville CEO Swiss-American Chamber of Commerce

2 USA: It s a whole world! Source: IMF, US Census Bureau (The Economist) April

3 US Economy: The largest for now and for some time GDP 2014 in % of world economy (est.) 25% 20% 22,3% 23,3% 22,5% 15% 13,3% 10% 5,9% 4,9% 5% 3,8% 3,6% 3,0% 0,9% 0% United States (1) China (2) Japan (3) Germany (4) United Kingdom (5) France (6) Brazil (7) Switzerland (20) Europe Union BRIC Source: CIA The World Factbook April

4 Key strengths are looming Economy has massively restructered Record cash levels at companies and banks Flexibility and mobility still much better than other economies Entrepreneurship still world class Energy revolution and remanufacturing April

5 Who is the innovation locomotive? Google Twitter Skype Yahoo Apple Microsoft Amazon ebay Facebook LinkedIn Uber AirBnB Where are similar firms from China, Russia, India, Europe? April

6 We are both World Champions! «The World Competitiveness Scoreboard», IMD, May 2015 «The Global Innovation Index», Insead, WIPO, Cornell, July 2015 «The Global Competitiveness Report», WEF, Sept April

7 Swiss or American? April

8 USA: Key Export Market for Switzerland % of Total 18.1% 6.9% 6.3% 5.8% 2.8% EU 53.7% 2.7% 2.6% 2.3% 11.5% 13.5% USA 13.5% 4.4% 2.8% 3.1% 1.6% 1.1% BRIC 7.4% Figures: Total Export 2015 (Mio. CHF) Source: Swiss Federal Customs Administration April % 0.9%

9 USA: The new «Export Locomotive» Country CH Exports Germany -8.3% Italy -17.9% France -2.8% EU -3.0% USA +37.7% BRICS -9.8% Total Export: +2.7% Quelle: Eidg. Zollverwaltung April

10 Growth of Swiss exports since 1995 In CHF bn Série Brazil China India Russia USA April

11 Impressive growth in FDI ,6 198,1 187,3 202,7 224,0 +50% ,7 157,1 140,8 152,9 +61% ,2 131,7 119,9 107,3 122,4 126, , r 2011r 2012r 2013r 2014p Total Swiss direct investment in the U.S. Total U.S. direct investment in Switzerland Source: U.S. Department of Commerce, Bureau of Economic Analysis April

12 Switzerland USA: Great opportunities! Business relations with growth potential Infrastructure Clean Tech, Green Tech, Sustainability, Energy efficiency Transportation Precision Engineering And furthermore: everything else! April

13 The Challenges 13 April

14 «It is economic warfare against Swiss banks!» SinceJanuary2008, bankshavepaidmorethan$ 200bn finesin theusa >75% paidbyus banks < 5% paidbyswiss banks Fine againstcreditsuisse isnot a recordfine Bank of America: $ 16.7 bnin 2014, $ 9.5 bnin 2013, total of US$91 bn JP Chase: $ 13.5 bnin 2013 BNP Pariba: $ 8.9 bnin 2014 It is a campaign against banks, but not against Switzerland or Swiss banks. Resolution well under way with pragmatic solutions. Pro memoria: Swiss companieshaverepatriated approx. CHF 100bn fromtheusa sincethestartof thefinancialcrisis April

15 Developments in USA Most Relevant to Switzerland Increasing regulation and implied protectionism New rules for Pharma, Insurance Companies and Banks Increased security arrangements Changes in corporate tax system; amnesty for foreign income? Search for additional tax revenue: increased scrutiny of tax havens: Corporate taxes! US programtoresolvelegacyof taxevasion Enforcement of exchange of information by IRS: FATCA!! April

16 Many axes of extra-territoriality FCPA Aiding and abetting tax fraud RICO Violation of embargos Violation of SEC rules Ground rule: «Non-discrimination» between US and foreign companies April

17 USA is at the center of the largest reorganization of trade (in development) TPP TTIP AUSTRALIA, BRUNEI, CHILE, CANADA, JAPAN, MALAYSIEN MEXIKO, NEUSEELAND, PERU, SINGAPUR, USA, VIETNAM; MAYBE SOUTH KOREA AND TAIWAN April

18 Tough issues are still unsolved Agriculture (e.g. food safety, GMO) Public procurement (US states!) Data protection (Safe Harbour, Privacy Shield) Geodata ISDS Cultural exceptions for media and audio-visual products April

19 EU-USA Freetrade: Amcham s Scenario There will be a treaty on the table There will be a docking clause Switzerland will have to accept a non-negotiated treaty with a broad liberalization of agriculture Ratification in Swiss Parliament and through a referendum will be difficult (agriculture!) There is a realistic scenario of a Trans-Atlantic Free Trade Zone without Switzerland April

20 What is at risk? 12.4% of Swiss exports to the USA 54.7% of Swiss exports to the EU Favorite location for US multinationals headquarter functions Foreign investments in Switzerland Swiss investments in USA at pari passu to EU companies? Suppliers to MNCs moving to EU/USA, mostly SMEs (Content rules!) Chance to be a part in the development of a much larger free trade zone (Turkey? Mexico? Canada? Others?) April

21 What can be done? Switzerland(EFTA) has three(theoretical) options: Co-sign Separate Free Trade Agreement with USA Sector-specific treaties with USA Atthemoment, onlytwothingscanbedone Closely follow TTIP negotiations(us-efta trade dialog) Proactively address most important hurdles(agriculture?) TTIP isnot theend, but thestartof a 20 yearsodysee Youcangetin atthestartorplaycatch-upfora longtime! April

22 Switzerland-USA: Closer than you thought April

23 Thank you! April