Switzerland is the seventh external investor in Argentina, while Argentina ranks fourth as a trading partner of Switzerland in Latin America, with more than 70 companies with direct investments in the territory.
During the first semester of 2023, according to data from INDEC, Argentina has maintained an intense commercial relationship of US$994.20 million, with a favourable balance of US$409.29 million. In 2022, the positive balance grew by almost 20% -to US$506 million- compared to 2021, as a result of exports of US$1,092 million (+14.3%) and imports totalling US$586 million (+10.2%).
Formal relations between Switzerland and Argentina began in 1834, with the arrival of the first designated Swiss Consul in Buenos Aires. One hundred years later, the Federation of Swiss Societies in the Argentine Republic was formed, which gave rise to the Argentine Swiss Chamber of Commerce in 1938. In almost 200 years of common history, both countries reached numerous bilateral and multilateral agreements to promote the exchange of goods and services, encouraging economic and industrial growth.
Switzerland is the sixth country with the highest GDP per capita in the world and, according to studies by the University of St. Gallen and the International Institute for Management Development (IMD), it is ranked among the 5 places in the world with greatest ease to do business.
Switzerland is a member of the European Free Trade Association (EFTA), alongside Iceland, Liechtenstein, and Norway. And although the EFTA and MERCOSUR free trade agreements are still in negotiation, waiting for the South American bloc to make progress in negotiations with the European Union; Argentina and Switzerland have different pacts to favour and improve trade conditions.
Since November 2015, the countries have a Double Taxation Agreement. Through this, the income and assets required by a Contracting State are avoided from being taxed twice. This agreement covers taxes on income and personal assets in Argentina, and in Switzerland, to federal, cantonal and communal taxes on income and wealth.
Argentina and Switzerland also have investment protection agreements since 1992, through which they promote investments by guaranteeing a certain level of protection against non-commercial risks (state discrimination of investors from the counterparty country with respect to national investors, illegal expropriation or unjustified obstacles to the movement of payments and capital).
On the other hand, since 1997 they share a unilateral agreement of recognition by Switzerland of the Argentine organic production system. This implies a Swiss endorsement of the regulations, controls and certifying entities and also paves the way for agroecological producers to export their products without the need to recertify them.
Switzerland's approval of Argentine standards for organic production opened the door to a wide variety of industrialized foods, such as wine, sugar, honey, lemon and grape oil, and bovine meat products. Thus, between January and June 2023, Argentina exported US$5.57 million of non-sparkling wines and grape must, US$4.80 million of boneless beef and US$2.06 million of natural honey. During 2022, Switzerland imported US$ 1,434,303 in thousands of products from different parts of the world corresponding to the chapter “Fruits; citrus rinds, melons or watermelons” of the agreement.
Faced with the possibility that northern Argentina finds a market in Switzerland through this last chapter, Arnaldo Hasenclever, Director of the Grant Thornton Argentina's IBC and representative of the Firm in the Swiss Argentine Chamber of Commerce, comments that "surely it could be possible to export lemons to Switzerland if the corresponding procedures are carried out with the different Swiss government agencies and with private companies”. An example of this would be the companies that produce lemon fragrances/essences.
“There is also the possibility of direct Swiss investment, as has happened with some vineyards, where there have been strong Swiss investments (Colomé, for example). This situation promotes Swiss knowledge of the Argentine market, and could help generate exports in other areas”, concludes Hasenclever.
However, the largest market that Argentina finds in Switzerland are "Fine (natural) or cultivated pearls, precious stones, others." Since national gold began to be exported to the "country of clocks" in 2005, the trade balance turned positive. Gold for non-monetary use, raw forms of gold alloy or gold bullion, represent the highest sales in the first half of 2023 (US$ 616.78 million), followed by other products of this chapter, such as silver and other minerals (US$67.19 million).
"Argentina also has significant potential in the field of mineral extractive industries with concrete application in the production of the robotic industry and of a sustainable nature that complement the research iniciatives of developed countries such as Switzerland," says Alejando Chiappe, Lead Partner of Advisory Services and spokesperson in the Life Sciences industry.
In fact, Switzerland has an interesting position in sectors such as robotics, artificial intelligence, advanced manufacturing, blockchain, and personalized healthcare; with large clusters in ICTs, life sciences and in the metallurgical, electrical and machinery industry (MEM). It is in this sense that the Argentine Knowledge Economy (KBE) can also enter and become strong in the Swiss market through biotechnology and software and engineering development.
The application of cutting-edge technology in Life Sciences characterizes the Swiss market. This is the case of the activity known as personalized healthcare, a medical paradigm in which the present and the history of the patient, their genomes and all the information that allows knowing the current state and the probabilities of having certain diseases in the future is analysed. This analysis includes knowledge of medicine, pharmacology, but of also big data and biotechnology.
This methodology has the purpose of treating the patient when required, and have the ability to prevent hereditary or environmental health problems. It is especially used in the oncological field to find new and more effective treatments; and also in the pharmaceutical and pharmacogenomics industry, to develop effective and safe drugs, in addition to determining doses tailored to genetic variations.
The Argentine KBE applied to the field of genetics and medicine is widely developed and has a high level of knowledge and experience. “Argentine talent linked to the development of software associated with artificial intelligence and robotic programming can create new spaces for collaboration, development and growth between both countries, enhancing their capabilities. Feeding this virtuous cycle would not only benefit our countries but would also make it easier for other less favoured nations to reach more satisfactory thresholds in terms of productive development, public health and environmental care”, concludes Chiappe.