A Story of a Long-lasting Friendship by SECO

The long-standing business and trading relationship between Switzerland and Thailand dates back to the 18th century. It flourished until, eventually, in 1931 or 90 years ago, the Kingdom of Thailand and Switzerland signed the Treaty of Friendship and Commerce. This agreement not only emphasized diplomatic but also economic relations between the two countries and led to an overall cordial relationship.

At the beginning of the 1950s Swiss woven fabrics was quite popular in Bangkok and already then, Swiss textile companies looked for new business opportunities in Southeast Asia. Towards the end of the 19th century, economic activities between Switzerland and former Siam rose, which was mostly due to trade in rice, tin, tungsten and condensed milk. Today’s commonly traded products are luxury goods, pharmaceutical products, machinery and precision instruments.

Besides trade in goods, additional agreements such as the Double Taxation Agreement (1996) and an Agreement on the Promotion and Reciprocal Protection of Investments (1997) were signed later on and shaped Thai-Swiss cooperation even further. Swiss companies started to expand their business to Thailand in the early 20th century, thus boosting the bilateral economy.

Nowadays, Thailand is among the most important trade and investment partners of Switzerland in Southeast Asia. Whereas Switzerland is already one of Thailand’s 15 most important partners for exports and imports and the 12th largest foreign investor in Thailand (2017).

Apart from trade, migration and increasing tourism are also key factors of the Thai-Swiss economic relations. Thailand is not only the Asian country with the largest Swiss population abroad (9,551 in 2019), but also a popular travel destination. Thailand’s broad range of attractions interest newlywed couples as well as nature-loving backpackers. Perhaps this potentiality led to the popularity of Thai food such as Pad Thai or Tom Yam, which have become all-time favorite in Switzerland.

Furthermore, the economic cooperation has also been enhanced by interpersonal encounters. The current ruling royal house of Thailand, the Chakri dynasty, has maintained a longstanding relationship with Switzerland. For instance, H.M. King Chulalongkorn was the first Thai King to visit Switzerland in 1897 and in 1907. Also, H.M. the late King Bhumibol Adulyadej The Great had a particular attachment for the Swiss Confederation, since he spent part of his childhood and youth in Lausanne (1933-51) –the Thai Pavilion, erected by the Royal Thai Government in cooperation with the City of Lausanne, still embellishes Parc du Denantou in Lausanne and has been a testament to H.M. King Bhumibol Adulyadej The Great’s bond to this country.

Because of all these close and vibrant contacts between Thailand and Switzerland, we believe that there is potential to further improve and strengthen the framework that facilitates exchanges between our countries.

It is therefore only natural that Thailand and Switzerland – together with our partners in the European Free Trade Association (EFTA) Iceland, Liechtenstein and Norway – have recently intensified talks on resuming the negotiations towards a free trade agreement (FTA). On the Swiss side, we very much appreciate the commitment and openness shown by our Thai friends and the inclusive process put in place domestically to assess the feasibility of such an agreement. We believe that it might be a true reflection of the broad scope and variety of the economic interactions between our two countries. We should aim for an ambitious, modern and comprehensive partnership agreement that contributes to create a framework for trade and investment between our countries – not just for now but also for many years to come. The agreement must reflect the shared conviction of both parties. Trade and investment are not an end in themselves, but should ultimately contribute to a sustainable development.

From a Swiss and EFTA perspective, the agreement shall of course aim at the elimination of tariffs on industrial products and foresee a liberalization of trade for each side’s most important agricultural products while keeping in mind the sensibilities of all participating countries. An FTA might also facilitate procedures and simplify the everyday life of exporters and importers. The agreement should also not be limited to trade in goods, but include ambitious provisions on trade in services, investment, competition and intellectual property rights, thereby creating legal certainty and transparency for traders and investors of both sides. In order to enhance the potential benefits of such an agreement, we must improve the mutual access to our government procurement markets. Finally, the agreement should contain a comprehensive chapter on trade and sustainable development, underlining the mutual support of economic and social development as well as environmental protection, and reaffirming our shared commitment to develop international trade and investment in a way that is beneficial for all.

We believe that the resumption of negotiations towards and FTA could be an important signal and contribute to our efforts to provide a boost to companies in Thailand and Switzerland after the economic set-back due to the Covid-19 pandemic and the associated economic restrictions. We are convinced that a smart, modern and comprehensive free trade agreement would ideally complement the range of agreements we have concluded, and contacts we have established over the 90 years of diplomatic relations. What better way to celebrate this anniversary than by looking forward to the future and embarking on yet another joint undertaking with a view to further strengthening our friendly bilateral relations!

Ambassador Erwin Bollinger
Ambassador Markus Schlagenhof
State Secretariat for Economic Affairs (SECO)

Ambassador Erwin Bollinger, Delegate of the Federal Council for Trade Agreements and Head of the Bilateral Economic Relations Division in the Foreign Economic Affairs Directorate.

Ambassador Markus Schlagenhof, Delegate of the Federal Council for Trade Agreements and Head of the World Trade Division in the Foreign Economic Affairs Directorate.

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