Switzerland enjoys one of the world’s highest standards of living thanks to a highly-skilled labour force, technological expertise in manufacturing and a strong financial services sector. Its stable, transparent and effective institutions, combined with high-quality infrastructure and low corporate tax rates, make Switzerland one of the most competitive economies globally.
Switzerland has a federal structure with three levels of government: the Confederation (federal government equivalent), the cantons (state/territory government) and the communes (local government). The Swiss Confederation consists of a seven-member Federal Council (cabinet equivalent), elected by the Federal Assembly for a four-year term. The position of President of the Swiss Confederation rotates annually among the members of the Federal Council. Alain Berset is Switzerland's President in 2018. The Federal Assembly is Switzerland’s national legislature. It has two chambers: the National Council and the Council of States. The National Council has 200 members elected on a (mostly) proportional representation basis. The Council of States has 46 members: two from each canton (territorial/administrative sub-division) and one from each half-canton. The two chambers serve concurrent four-year terms.
Since October 2015, a coalition of the five major political parties has led Switzerland. The Swiss People’s Party (SVP), the Social Democrat Party (SP) and the Free Democrat Party (FDP) each have two seats and the Christian Democratic People’s Party (CVP) and the Conservative Democratic Party (BDP) each have one seat.
While Switzerland has a long-standing tradition of neutrality and is not a member of NATO, it participates in peacekeeping missions and plays an active role in conflict mediation. Switzerland is one of four members of the United Nations (UN) Neutral Nations Supervisory Commission monitoring the demilitarised zone between North and South Korea. Switzerland became a member of the UN in September 2002.
More than 20 international organisations are headquartered in the Swiss city of Geneva, including various UN agencies, the World Trade Organization (WTO), the World Health Organization and the International Committee of the Red Cross.
Switzerland is an open economy with one of the highest standards of living and one of the highest per capita incomes in the world. Its prosperity is based on labour skills and technological expertise in manufacturing as well as earnings from services such as tourism and banking. In the 2016-17 World Economic Forum Competitiveness Index, Switzerland was ranked number one for the eighth consecutive year.
Switzerland has weathered the negative effects of the 2009 Global Financial Crisis (GFC) comparatively well and has retained its AAA credit rating.
Although not a member of the European Union (EU), Switzerland is deeply integrated with the EU bloc. Its large Eurozone neighbours (France, Germany, Austria and Italy) absorb approximately 35 per cent of all Swiss exports.
Switzerland has concluded more than 100 sector-specific bilateral agreements with the EU. It acceded to the European Free Trade Association in 1960 and signed a Free Trade Agreement (FTA) with the European Economic Community in 1972. Switzerland became a member of the Schengen area in December 2008.
Australia and Switzerland enjoy an increasingly dynamic relationship based on shared political and economic interests, which are supported by regular high-level dialogue. A key element of contemporary ties is Switzerland’s significant investment in Australia. Cultural links have traditionally been close, and many Swiss have made valuable contributions to Australia. There is expanding cooperation in the areas of scientific research and development, education and two-way investment.
The Australian Ambassador to Germany, based in Berlin, is also accredited to Switzerland. Australian representation in Switzerland, based in Geneva, consists of a Consulate-General and the Australian missions to the UN and WTO.
Significant recent developments
Swiss Foreign Minister, Didier Burkhalter, visited Australia in October 2013 and signed a memorandum of understanding establishing a Strategic Dialogue between Australia and Switzerland to strengthen bilateral ties. Australian leaders and parliamentarians regularly visit Switzerland for multilateral meetings in Geneva and Davos and also meet with their Swiss counterparts.
Australia and Switzerland have concluded a number of bilateral agreements, including on: double taxation, social security, defence and supply, nuclear safeguards (covering the import of Australian uranium for peaceful purposes), air services, extradition, and mutual assistance on cooperation on law enforcement. Memoranda of understanding have been signed on cooperation in the fields of science, research and innovation, trainee exchanges and a regular dialogue on health regulations. Texts of bilateral agreements are available from the AUSTLII website.
On 3 March 2015 Australia and Switzerland agreed to increase cooperation to tackle tax evasion.
The contribution of Swiss immigrants during the early years of European settlement in Australia helped foster the country’s multicultural society. Contemporary links remain strong, with around 54,000 Swiss visitors to Australia in 2014 and around 1,600 enrolments from Swiss students in Australian educational institutions in 2015. Tens of thousands of Australians visit Switzerland every year. Australian artists have a presence in Switzerland through performing tours and visual arts shows, and feature in private and public collections, including Indigenous Australian art. The Australian Youth Orchestra toured Switzerland in August 2014.
Science and education
The science and education sectors are an increasingly important area of bilateral cooperation. The second meeting of the Swiss-Australian Joint Committee for Cooperation in the Areas of Science, Research and Innovation was held in Bern in October 2016. The meeting allowed senior officials from both countries to identify opportunities to further strengthen bilateral science and innovation collaboration.
The Swiss Australian Academic Network (SAAN) was established in 2005 to increase scientific exchanges between the two countries. SAAN currently has more than 650 members in both countries. Growing numbers of Swiss students are studying at Australian universities and more than 40 Australian education providers achieved Austrade-assisted export success in Switzerland. Leading providers include the University of Melbourne and Macquarie University.
Bilateral trade and investment relationship
Australia and Switzerland’s bilateral investment relationship is a significant source of prosperity for both countries. Australia’s economic relationship with Switzerland is growing, especially in the areas of scientific research and development, education, and two-way investment.
In 2015-16, total two-way trade was $5.9 billion. Australia’s merchandise imports from Switzerland (predominantly medicaments, watches and clocks, and miscellaneous manufactured items such as pacemakers and orthopaedic or fracture appliances) reached $3.3 billion. Australian merchandise exports to Switzerland (chiefly gold, meat other than beef, silver, and platinum) was $1.0 billion. Australia’s services exports amounted to $0.9 billion and services imports from Switzerland were worth $0.7 billion. Australia’s major services exports included transport and personal travel (excluding education) and major imports included charges for the use of intellectual property and personal travel (excluding education).
Switzerland is Australia’s tenth-largest source of foreign investment, worth $50.2 billion at the end of 2015. Notable Swiss companies with a base in Australia include Glencore Xstrata (mining), Novartis Pharmaceuticals, Roche, Nestlé, and financial services companies Credit Suisse, Zurich and UBS.
Australian investment in Switzerland was $18.6 billion at the end of 2015. Notable Australian companies in Switzerland include Sonic Healthcare, Macquarie Group and biopharmaceutical group CSL Behring.
Zurich is the Swiss financial and commercial hub. The Australian Trade Commission, (Austrade) opened an office in Zurich in August 2015.