While the Federal Council is launching a new version of the free trade agreement with China, the Left is preparing the referendum, as the federal government is unlikely to accommodate their demands.
The talks with Beijing are just the first hurdle: Federal Councillor Guy Parmelin (2nd from right) with Wang Shouwen, the Chinese Vice Minister of Trade. Far right: Federal President Viola Amherd.
Peter Klaunzer / Keystone
It wasn’t that long ago that everything was a little simpler in Swiss trade policy. The then Minister of Economic Affairs, Johann Schneider-Ammann, finalized the free trade agreement with China without a referendum. Today, a good ten years later, things are more complicated. The Federal Council wants to update the agreement with Beijing, but a referendum can be held against the new version.
Economics Minister Guy Parmelin and his team are currently formulating the negotiating mandate for the talks with China. The Left is demanding binding concessions in the area of human rights. Research shows that the federal government is unlikely to agree to this.
“Ten years ago, supporters of the agreement claimed that China was changing, that the country was opening up and that trade was supporting this development,” says Green Party President Lisa Mazzone. “Today we have to say: this approach has completely failed.” The dictatorship in China has become even stronger, and the situation of minorities even worse.
“We have openly expressed our concerns. However, the Federal Council continues to cling to the illusion of change through trade,” said Mazzone. She demands that human rights and environmental protection be guaranteed in the new treaty. A binding mechanism is urgently needed that allows for precise clarification when there is a suspicion of human rights violations. “And there must be the possibility of suspending the treaty if these allegations are substantiated. Without the possibility of sanctions, updating the agreement makes no sense.”
Parmelins Mandat
The party is not content with a threat. On August 13, the Green Party’s management decided to hold a referendum if the agreement does not contain binding provisions to protect human rights. “I am convinced that we have a very good chance of winning,” says party leader Mazzone. The Federal Council could still take up the critics’ concerns and at least try to incorporate them into the negotiations. It is entirely unclear whether the Chinese negotiating partners would even agree to this.
But the leading economic department (EAER) has already largely defined its direction. The negotiating mandate is outlined in an internal information note from the EAER, which the “NZZ am Sonntag” has obtained. The modernization of the agreement is intended to achieve “economic and economic policy added value,” it says. The department describes its negotiating goals as follows: “The framework conditions should be further improved where necessary so that cross-border trade with this important partner can be further liberalized.”
Officials say that “Switzerland’s three priority interests” are “the expansion of customs concessions, the improvement of market access for investments and the strengthening of trade and sustainable development regulations.” Human rights issues “related to economic activity,” such as forced labor or child labor, are to be part of the talks. They will also propose to China “a regular exchange of experts on economic and human rights issues.” When asked, the WBF also refers to the human rights dialogue that the two countries are conducting. That is not really very concrete.
Critics of the agreement are anything but satisfied. “The approach chosen by the Federal Council is a scandal,” says SP National Councilor Fabian Molina. “It refuses to make human and labor rights legally binding. But this is the only way to enforce them in the future.” Discussions or expert meetings are simply not a way to enforce improvements. “This means we end up in a situation where a Swiss company can sue against unlawful tariffs, but an importer cannot do anything about it if the goods delivered were manufactured under inhumane conditions,” warns Molina.
Agreement is not a sure-fire success
At the beginning of July, Federal Councillor Parmelin travelled to China to get the extension of the agreement underway. If there are no substantial adjustments, “then a referendum is certain,” says SP foreign policy expert Molina. Parmelin’s supporters in parliament also assume this. “Let’s be realistic, the referendum is coming,” says SVP National Councillor Roland Rino Büchel. He defends the Federal Council’s approach. “The question arises whether every concern really belongs in black and white in this treaty.” Büchel is certain that more can be achieved in direct, non-public discussions.
A vote will not be a sure-fire success for the Federal Council. In March 2021, Switzerland voted on a free trade agreement for the first time. But even though the SP ultimately backed the agreement with Indonesia, the outcome was close, with 51.7 percent of votes in favor. “The vote was a warning shot,” says Gerhard Pfister, president of the center party.
For this first post-pandemic on-site contact, we took stock of commercial relations 🇨🇭-🇨🇳 and collaborations between our university institutions. pic.twitter.com/3lTmVixlDT
— Guy Parmelin (@ParmelinG) July 1, 2024
And the reservations about China go far beyond the economic rules of the game. Tensions between the West and China have increased over the past ten years. Switzerland is pursuing its own course with its exclusive free trade agreement. These are also concerns that will resonate in a decision at the ballot box.
“The government is completely ignoring the geopolitical situation,” says Pfister. “China is in an alliance with Russia, which in turn threatens Europe’s security. One should therefore ask oneself how sensible it is to promote free trade with such a power.” If Guy Parmelin actually succeeds in negotiating a new agreement with China, he will only have overcome the first hurdle. The dispute at home could end up being more delicate than the talks with Beijing.
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