Commercial partnerships
Mercosur, United States, EU: Guy Parmelin, have we negotiated well?
The Minister concludes a free trade agreement with four South American countries. He also evokes the deal with Trump and is expressed on bilaterals.
Guy Parmelin has just concluded an agreement with Mercosur, a common market that brings together Brazil, Argentina, Uruguay and Paraguay.
Yvain Genevay
- The free trade agreement with Mercosur opens a market of 300 million consumers in Switzerland.
- Guy Parmelin believes that the concessions of Swiss agriculture are minimal.
- The Treaty includes strict commitments on climate protection and deforestation.
- The Minister of the Economy does not think that Trump will increase customs duties on July 9.
Guy Parmelin, your greatest success, is this agreement with India in 2024 or that of Mercosur Concluded Wednesday?
With India, it was exceptional. Everything seemed blocked and, at the last minute, we left to negotiate in Mumbai. A relationship of trust was created overnight. Starting from Davos at 5 a.m. and returning to Bern the next day at 5:30 p.m. with an agreement: it marks. For Mercosur, the situation is different. The negotiations were long and difficult, with several countries involved. Agriculture and pharmacy were sensitive subjects. It was necessary to succeed before the European Union. We could not be doubled, while this market has 300 million consumers.
When Johann Schneider-Ammann signed with China, he was praised by the PLR. Are you disappointed that the UDC has not commented on your successes any more?
No, we must distinguish the life of the party from that of the Federal Council. I do my work in the interest of the country. My party still spoke of “royal roads” about free trade.
You will undoubtedly remain as the Minister who has concluded the most agreements, with also Malaysia, Thailand or even Indonesia. Was it your goal by taking over this economy department in 2019?
When I arrived, several agreements were blocked, especially with India. The pandemic, the new global geopolitics and internal discussions – notably with the Secretary of State for the Economy – convinced me to relaunch the machine. The agreement with India was a trigger, showing that a small country can succeed. Then everything accelerated.
It is paradoxical, because the agricultural environment, from which you come, is fearful vis-à-vis free trade.
I leave from the principle that everything that strengthens the economy as a whole also benefits agriculture. A solid economy makes it possible to finance direct payments to peasants who provide services to society. But we remain very cautious in the negotiations. In Switzerland, food self -sufficiency is 50%. Protecting this sector is a question of national security. With Mercosur, the concessions are minimal.
Swiss wines are down. Viticulturalists fear increased competition from Mercosur wines. Can you reassure them?
I do not believe in an invasion of South American wines. The quotas remain limited to 50,000 hectoliters and the limitation of customs duties will lower the price of the bottle by around 70 cents. The Swiss consumer who buys foreign wine could prefer a mercosur wine to another. The difficulty of local production is not this competition, but the drop in consumption. She dropped 8% last year, more than for foreign wines. Young people drink less wine, it’s a fact. The sector must reinvent itself and review its marketing.
Guy Parmelin took over the economy department in 2019.
Yvain Genevay
This agreement was praised by economic circles, but criticized by the Greens who denounce a Treaty at the detriment of the climate. What do you answer?
They should first read the agreement. This is the first time that a chapter has been so far in terms of sustainability. It covers climate protection, the fight against deforestation, a commitment to reforestation, strict measures for workers’ rights, and the participation of indigenous peoples. An independent panel of experts has also been created to monitor the application of the agreement. Its public reports will be able to put pressure. These are all points claimed by the Rose-Vert Camp.
Do you expect a referendum?
It’s hard to say. If a vote takes place, we have good arguments. It should not be forgotten that if the agreement fails, jobs may be lost, especially in the machine industry, with relocations. Because the agreement between the EU and the Mercosur will allow European companies to export without customs duties. It is not a threat, but an observation.
In 2021, Voting on Indonesia almost failed, especially because of palm oil. For Mercosur, your opponents will brandish the beef with hormones and deforestation. How to convince?
The chapter on deforestation is clearly progress. For meat, we will not be invaded by hormone beef. South Americans are experiencing the tastes of Swiss consumers and favor natural beef. The agreement also encourages production without growth stimulators. If hormone beef is present in the contingent of 3000 tonnes, it should be clearly labeled as such.
If the agreement with Mercosur is concluded, the deal with the United States on customs duties seems to trample. What’s going on?
The United States is a little overwhelmed, with a seventy countries in negotiations. They have already concluded the first step with Great Britain and China. For Switzerland, it should come quickly.
In early May, you indicated that a preliminary agreement would be concluded within two weeks. Two months later, nothing. Have you been too optimistic?
We thought it would go faster. This is not the case. We are not the only ones to see. The EU chief negotiator had to return to Washington. On our side, we were told that it was almost over. Besides, no member of the Federal Council had to intervene for the moment.
The postponement of the increase in customs duties at 31% short until July 9. Should we worry?
Theoretically, this increase could take place, but in practice, I don’t think so. Nothing is written, but several signals indicate that the United States considers our negotiations in good faith. An extension of the period is possible. Our priority is to quickly obtain a clear text on our status to remove uncertainty, which is harmful for our companies.
Guy Parmelin is also directly involved in the agreement with the United States on customs duties.
Yvain Genevay
Our first trading partner remains the European Union, however. What is your opinion on the package of agreements with the EU?
Since 2021, the Federal Council has insisted on stabilizing our relations with the EU. The current package involved six of the seven departments and required approximately 200 rounds of negotiations. The message is clear: this package is beneficial for Switzerland. We are waiting for the end of the consultation.
In 2021, it was you who announced in Brussels the end of negotiations around the framework agreement. Today you speak on behalf of the Federal Council on the new package. But you, Guy Parmelin, do you think this new treaty is good?
Whether it is this package with the EU or the free trade agreements, it is the college policy of the Federal Council, not one of its members.
You played a role in bringing the social partners back to the agreement. Do you think you have done your duty, or do you plan to engage in parliamentary debates or during the vote?
Once the Federal Council has prepared its message, it will transmit it to Parliament. As head of the Department of Economy, I am responsible notably for the file on the protection of workers. I will represent these aspects, just as my colleague Albert Rösti will do for electricity. Everything is structured.
Thursday, your party, the UDC, greeted the agreement with Mercosur while criticizing the future package with the EU. What do you tell him? That the two are important?
The policy of the Federal Council is not that of the parties. It happens that a party opposes the position of one of its members to the government. This is normal in our political system. On the European issue, the Federal Council made a decision. And it’s about implementing it.
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