Kemi Badenoch will fly to Switzerland on Monday for talks with her Swiss counterpart on a new post-Brexit trade deal, describing the two countries as "natural trading partners".
The business and trade secretary is meeting Guy Parmelin in Berne to discuss a "modern" UK-Switzerland free trade agreement (FTA) that would boost trade between two "services superpowers", she said.
"There's a huge prize on offer to both the UK and Switzerland by updating our trading relationship to reflect the strength of our companies working in areas ranging from finance and legal, to accountancy and architecture," said Badenoch ahead of the talks at the Federal Palace of Switzerland.
"The UK and Switzerland are natural trading partners and today's launch will play to our strengths as services superpowers, while also boosting investment in emerging technologies, data innovation and digital trade."
The government is keen to forge new trading relationships in the wake of Brexit and most recently joined the 11-member Asia-Pacific trade bloc - the Comprehensive and Progressive Agreement for Trans-Pacific Partnership - that includes Japan and Australia.
Switzerland, one of the wealthiest countries in the world, is already the UK's 10th largest trade partner, accounting for 3.1% of its trade in 2022. The total trade in goods and services (exports plus imports) between the UK and Switzerland was nearly £53bn last year, up £13bn on 2021, according to the department for business and trade.
William Bain, head of trade policy at the British Chambers of Commerce, described the Swiss talks as "one of the most important sets of negotiations for business the UK government has launched in the post-Brexit era".
"The 2021 continuity agreement post-Brexit only rolled over terms on trade in goods but not services, so there has been a major gap to fill in affecting just under half of our trade with Switzerland," he said. "We also need to make permanent the temporary services labour mobility and business travel rules agreed last year."
The UK runs a trade surplus with Switzerland with a breakdown showing exports totalling £33.3bn and imports of £19.5bn. Of all UK exports to Switzerland in 2022, £18.5bn (55%) were goods, including gold, art works and medicine, while £14.9bn were services, of which two-thirds were business and financial.
The current FTA is based on an EU-Swiss deal brokered more than 50 years ago and does not cover services, investment, digital or data. With nearly 70% of the UK's services exports to Switzerland delivered electronically both sides are said to be keen on a modernised agreement.
Chris Hayward, policy chair of the City of London Corporation, said the UK and Switzerland are the two largest financial centres in Europe and "strengthening our services trade relationship is a top priority". The agreement needed to address key issues including mobility, data flows and digital trade to the "benefit of both jurisdictions", he said.
The talks will formally get under way next week with lower tariffs (red meat and chocolate are among the British goods that attract high import taxes) also on the government's list along with simpler customs procedures and improving regulatory cooperation.
Naomi Smith, chief executive of the Best for Britain campaign group, said closer ties to Switzerland would not replace trade lost following Brexit: "The government should prioritise removing new barriers to trade with our largest trading partners in Europe which continues to cost jobs and stunt growth."
Nick Thomas-Symonds, shadow secretary of state for international trade, added that when it came to trade the government was "big on promises and appallingly low on delivery".
"Of course, it's important to deepen trade links with allies like Switzerland," he said. "However, the government have promised signed deals with the USA and India by the end of 2022, neither have been delivered and look increasingly far off. Little wonder the OBR forecasts UK exports will fall by 6.6% in 2023, a hit of over £51bn to the economy."