Exports to Brazil. Swiss SMEs stumble.
No risk, no fun – Swiss SMEs usually export to countries where doing so is most difficult. But to what extent are Swiss exports really affected by measures that distort trade, and which countries have the most barriers to trade for SMEs in Switzerland? The 2019 SME study reveals the answers.
Swiss exports focus on Germany
Swiss SMEs export most often to European markets. This is one of the findings of the survey of the 2019 SME study by Credit Suisse. Germany beats all other destinations and therefore represents the most important export market for Swiss SMEs. In addition to Europe, the SMEs surveyed focused their exports heavily on the US market.
The US is followed – albeit at some distance – by Asia. China and Southeast Asia top the list of Asian export destinations. This is interesting because a relatively high share of SMEs surveyed indicated that while they had considered exports to China in the past, they had then decided against it. This is likely due to the trade-distorting measures implemented by China. South and Central America are also increasingly becoming export markets for Swiss SMEs. The SMEs surveyed reported that they exported a substantial share representing nearly 20 percent of exports to countries in this region.
Switzerland's favorite destinations tend to have the most trade barriers
But where do Swiss SMEs encounter the biggest hurdles? "Since the financial crisis, more than a thousand new trade barriers are registered every year," says Alfonso Orlando, Head of Export Help at Switzerland Global Enterprise. The main culprits on the trade front, however, appear to be Germany and the US – the two most important export destinations for Swiss SMEs. This is because Germany and the US have implemented the greatest number of trade-distorting measures since 2009. And China, too, has assumed a top place in this category. But to what extent are Swiss SMEs affected by trade barriers and protectionist measures?
SMEs face few trade barriers in Europe
However, 54 percent of SMEs that export to China or wanted to do so report certain trade barriers – and some that are quite high. Nearly half of the companies surveyed said that they also faced such barriers to trade when exporting to the US as well. By contrast, Europe presents an entirely different picture: For example, Swiss SMEs appear to be fairly unaffected by the protectionist measures implemented by the German government.
There are fewer barriers to trade in the UK than in neighboring countries and the rest of the EU, in the view of the SMEs surveyed. However, exports to Russia and Brazil are more difficult, according to the Swiss SMEs surveyed. In these countries, more than 60 percent of SMEs face trade barriers large and small.
UK remains attractive for Swiss exports
In the future, the UK may catch up with the US in terms of its significance for Swiss SMEs. This is because some companies plan to increase their exports to the UK. The survey shows that only a hard Brexit might hinder the development of the UK as a thriving export market for Swiss SMEs.