Switzerland, as a member of the European Free Trade Association (EFTA), signed a free trade agreement with Thailand on Thursday during the World Economic Forum in Davos.
Swiss Economics Minister Guy Parmelin hailed the successful conclusion of negotiations between EFTA and Thailand as a significant achievement for Switzerland's foreign economic policy.
The agreement aims to enhance Swiss companies' access to Thailand's strategically important and high-potential market, Swiss Info reports.
“This is the first free trade agreement with a European country,” said Thai Deputy Commerce Minister Pichai Naripthaphan.
The EFTA–Thailand agreement is a wide-ranging and ambitious agreement that addresses multiple areas, including trade in goods and services, investment, intellectual property rights, competition, government procurement, and sustainable development.
Its goal is to strengthen trade ties between the EFTA states and Thailand by reducing or eliminating customs duties, easing trade processes, and fostering sustainable growth. The agreement also introduces new provisions for small and medium-sized enterprises, as well as cooperation and capacity-building initiatives.
According to EFTA, which comprises of Switzerland, Iceland, Liechtenstein and Norway, negotiations with Thailand began in June 2022 in Iceland. Following that, 10 rounds of talks were held in Bangkok, Geneva, and Oslo.
Furthermore, in 2023, the merchandise trade volume between the EFTA states and Thailand totalled €3.2 billion (CHF3 billion).
With a bilateral trade volume of CHF 7.4 billion in goods in 2023, Thailand is Switzerland's second-largest trading partner in Southeast Asia.
According to the Swiss National Bank (SNB), Switzerland was also a significant source of foreign direct investment in Thailand, with over CHF 2 billion invested in 2022.
In addition, Swiss companies provided employment to nearly 28,000 people in Thailand that same year.
The Federal Council will now present the agreement to Parliament for approval. The free trade agreement will come into effect once the internal approval processes in the signatory states are completed.