Swiss parties call for more protectionism

Companies in Switzerland are currently struggling to secure public contracts: because of the strong franc they are struggling to compete on price with foreign companies, Tages-Anzeiger newspaper reported.

The State Secretariat for Economic Affairs (Seco) is currently investigating how Swiss firms could be given an advantage in public procurement without breaching international regulations. 

Finance Minister Johann Schneider-Ammann has previously indicated that he would welcome changes to the country's public bidding system.

Michaela Stöckli, the director of industry association Swissrail, described how Switzerland was behaving with excessive rigidity in its approach to bids for tender.

“When it comes to procurement, Switzerland is more European than Europe,” she said.

“Unlike our neighbouring countries, the authorities would never define criteria that could benefit Swiss companies.”

In an unpublished study, Swissrail said it found that there is a considerable room for manoeuvre that could be used by authorities to favour highly qualified Swiss companies, while still complying with World Trade Organisation (WTO) principles.

Stöckli said it could for example be stipulated that a contractor be required to be present on-site: “That would benefit the Swiss company,” she said.

The protectionist proposal gained support from left and right in parliament on Thursday ahead of the upcoming national elections.

Hermann Bürgi, Swiss People’s Party councillor from Thurgau, said he was annoyed that the government was pumping half a million francs ($554,505) into unemployment insurance, while continuing to award major contracts abroad.

Social Democrat (SP) national councillor Edith Graf-Litscher said the government must “provide for more flexibility in the application of international guidelines”.

Faced with exchange rate parity, Swiss firms did not have a chance being awarded contracts, she said.

Liberal party (FDP) national councillor Werner Messmer demanded that Switzerland set a threshold capping the number of foreign suppliers allowed to bid for public contracts.

Since Switzerland signed onto the WTO agreement in 1996 and the bilateral treaty with the EU in 2002, foreign contractors cannot be disadvantaged over national companies.

Economist Reiner Eichenberger from Freiburg University told the newspaper that any talk of protectionist measures was cause for alarm.

“When Switzerland wants to protect public procurement, there will be costs,” he said, believing hidden subsidies for local businesses would force the state to pay more for infrastructure and buildings.